Front-Running Ruins DeFi - Only Telos Prevents It From Happening!

Front-Running Ruins DeFi - Only Telos Prevents It From Happening!


To know how Telos prevents Front-Running, let's know deeper the meaning of it. 

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Let's try to think about this thought and we will soon realize this fact:

Telos is the ONLY blockchain that protects its users from losing funds from Front-running or MEV. This means users can keep more on their trading revenue and will have a fair shot of winning competitive NFT-sales without miners stacking a deck against them.

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This is how front running happens in a Traditional Finance Market:

Imagine you called your stock broker that you want to buy a $100-M stock from Tesla.
We all know that this kind of purchase would let the price increase for a while. If the broker wanted to make some QUICK MONEY, the stock-broker would then buy first a $100-K, could put his own order before your $100-M. In this way, he could put the price of the stock after his order higher that what you initially thought.
If your broker sold his order after you have bought it at a higher price, then definitely he would get instant NO-RISK profits.

This is called the Sandwich trade. In Financial Markets it is illegal and have severe penalties. Hard to get away with it. But...

In DeFi markets however, it's easy to jump ahead before your order, aside from that, it creates a high cost of transactions in any defi platforms because paying higher gas fees is one way to front-run others or avoid it happening to you. It only means that people bidding on NFT's often lose out to others who can pay more gas or even the ones who can offer direct bribes to miners. This can cause users a lot of money.


Since January 2020, The money that the traders lose because of front-running is a whooping $720-M according to MEV-Explore. The kind of amount that is even more than the rug-pool projects ever steal from traders around the world.

In the Ethereum Blockchain
The miners can just pick transactions to process they like based on the higher amount of gas fees placed by the users obviously for profits.

This is called MEV or Miners' Extracted Value.

It also happening in other chains. Though it is illegal in the Traditional Finance setting, it is allowed on the DeFi market due to it's nature of being decentralized. Unfortunately the tokenomics of these chains highly encourage front-running. These are Ethereum, Binance Smart Chain, Polygon, Avalanche, and more!!!

Telos is the ONLY blockchain that doesn't allow front running because of its solid governance.
Due its extreme speed of 10,000 TPS and creating two new blocks every second. This leaves no time for mem-pool bots to scan for valuable trades. More importantly, Telos doesn't have any gas fees on its native blockchain during transfers.

It also has a FIXED RATE GAS FEE on TelosEVM. This means NO-ONE can jump ahead the order of the other because there is no higher gas fees to CHOOSE FROM.

The Telos software nationally orders the transactions on a FIRST-IN, FIRST-OUT as it creates blocks.

The Block-Producers cannot re-order transactions for PROFIT. Any block-producer is easily caught and by doing this it has extremely harsh penalties. This way, all the transactions are protected in front-running on Telos.

Please take time to watch this 7-minute video on how Douglas - Telos White-Paper Chief Architect explains it better.

Again, going back to the first statement, we now realized how powerful Telos is by preventing this scheme.

Telos is the ONLY blockchain that protects its users from losing funds from Front-running or MEV. This means users can keep more on their trading revenue and will have a fair shot of winning competitive NFT-sales without miners stacking a deck against them.

Thank you so much for reading. To know more about Telos, check it out here:

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To read more about my posts on Telos Network and its dApps: Check this blog compilation I have here in Publish0x:

Telos - The Most Powerful Blockchain In The World - Find out Why?

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If you think you can do these kinds of write-ups, please let me know as I always share each of my posts to social media especially after they just got newly published. Click this referral link and apply to become an author. I also encourage my fellow Telos community members to create their own accounts here as well.

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About the author:

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I just got promoted as the new Telos Foundation Marketing Manager alongside with Emmanuel. I also lead the Community Relations too. 

See you again next time.

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fycee
fycee

APPICS Senior Ambassador - Philippines Steemit Country Coordinator - Philippines Publish0x Pioneer Author cryptocurrency enthusiast, writer-blogger, customer-service associate, lifestyle, food and career-focused contents.


Telos - The World's Most Powerful Blockchain
Telos - The World's Most Powerful Blockchain

Telos is powering the networked ecosystem of the future. A networked ecosystem enabling visionary leaders and communities to work together to build a new global economy. - Decentralised - Energy efficient - Super-fast - Scalable - Cost-effective - Secure The Telos mainnet has been live since 2018, and today, Telos features a huge variety of smart contracts, dApps, the fastest transaction speed (at 10,000 TPS), and most importantly, ‘real world’ utility.

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