Top Cardano-powered DEX MinSwap saw front-running exploit

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DeFi
Top Cardano-powered DEX MinSwap saw front-running exploit

Minswap investigates a front-running attack on its platform after a user called their attention to a suspicious transaction. 

Minswap, one of Cardano’s foremost multi-pool decentralized exchanges, experienced a front-running attack yesterday, Dec.8.

The attack was first discovered by a Twitter user CryptoVincenzio when he noticed that an account was frontrunning orders and taking profits:

Minswap subsequently replied, stating that they were already investigating the incident on the DEX as well as other platforms:

After a couple of hours, MinSwap announced it had fixed the issue. The attacker canceled newly created orders because they could not “get ahead of the user.”

Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially. In crypto, front-running typically occurs when a miner or a full node operator with access to information on pending transactions places an order that would make them profit on the pending trade.

The attack is not the first security scare the exchange, with a total value locked (TVL) of $28.45 million, had experienced this year. In March, MinSwap disclosed that it had discovered a smart contract vulnerability during its audit, which could have been devastating if bad actors had exploited it.

Front-running is a type of attack when a trader has inside knowledge of a future transaction that will substantially affect the asset price. In crypto, front-running typically occurs when a miner or a full node operator with access to information on pending transactions places an order that would make them profit on the pending trade.

Bad actors involved in front-running scams often conduct these attacks with the help of bots. Front-running bots are designed to scan the blockchain for pending transactions and then pay a more significant gas fee so that miners process its transaction first to front-run a major trade that will affect market pricing.

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Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.