Attacking a moving target is hard, and it’s even harder when it’s moving quickly. This is the challenge that cryptocurrency traders face, particularly those who trade frequently throughout the day. They’re all too familiar with the risks of decentralized cryptocurrencies, such as the threat of front-running.
Front-running is when someone exploits a slow consensus system to manipulate or replace a transaction. In decentralized systems, transactions are visible to everyone before they’re processed, which can take up to 15 seconds on platforms like Ethereum. During this time, internet bots can potentially tamper with or replace the transaction. This is often due to leader-based consensus, where a designated leader coordinates the process, but can be slow and create opportunities for front-running.
One specific type of attack is the “sandwich attack,” where a bad actor takes advantage of both front-running and back-running a transaction during this slow process. The attacker inserts themselves between the sender and receiver, relaying communication to access sensitive information or manipulate it. They aim to place two orders around the pending transaction to affect the asset’s prices.
For example, imagine you’re an attacker in a busy deli. You see someone ordering a sandwich, so you quickly order the same sandwich with extra ingredients to make it more expensive. As the deli prepares your order, you step away, leaving the original customer with either no sandwich or a more expensive one.
To prevent such attacks, we need a mechanism that bypasses the mempool and allows transactions to be secretly sent to a single operator without exposing them to the entire network beforehand. Network speed is also crucial for security, as it reduces the opportunity window for front-running and other attacks.
Kaspa is tackling this issue with its asynchronous consensus/parallel consensus. With a rewrite in Rustlang, aiming for 32 blocks per second and hoping to reach 100 BPS, transactions could be processed in under a second before being propagated to the network. This would make cryptocurrency trading more secure and reliable.
Speed isn’t just a nice feature; it’s essential for the sustainability and security of decentralized proof of work chains. Kaspa’s focus on speed gives it an edge in ensuring security for its users.
Special thanks to Discord user @ZEPP8S for the concept and sharing relevant resources. Remember, the ‘sandwich attack’ is just one of several front-running attacks others should be aware of.
For more information on Kaspa, you can follow them on various platforms including Twitter, Medium, Discord, Telegram, Reddit, GitHub, and their Explorer. The original post “Kaspa: Speed = Security” can be found on Kaspa’s website.