What is encryption jump start (blockchain jump start)?

What is encryption jump? How is encryption rush to take shape? How to avoid encryption jumping? The crypto field is a rush to make profits by unconfirmed transactions, leveraging the transparency of blockchain. Learn how traders, bots, and validators manipulate transaction sorting, their impact on decentralized finance, and possible ways to protect transactions. Below, the editor of Script Home will give you a detailed introduction to encryption and rush forward!

What is the rush to the encryption field?

Taking the lead has long been a problem in the financial market. It originated in the traditional financial field, and refers to brokers or insiders using privileged information to trade before clients. Such behavior is considered immoral and illegal, and the regulator will investigate and prosecute it.

In the cryptocurrency field, jumping occurs on the chain, which is due to the transparency of public blockchain transactions. Traders, bots, and even validators or miners can make profits by using unconfirmed transactions stored in the memory pool.

Unlike traditional markets, crypto is in the gray area of ​​law. Although generally considered immoral, only those with technical capabilities and able to manipulate transaction sorting can make the most of this opportunity.

Encrypted jump-off form

The form of encryption jump starts varies depending on market conditions, participants and execution strategies. Here are the main types and how they work:

Take the lead (Displacement)

Traders monitor large buy and sell orders in the memory pool and place orders in advance to profit from expected price changes. For example, an attacker may ensure that his transaction is prioritized by paying a higher Gas fee before a large order is executed, thus completing asset purchases before the victim’s transactions.

Suppression

Malicious actors take advantage of a high transaction volume environment to monitor large orders and generate large amounts of transactions, which makes the network overloaded. As a result, the victim's transactions are difficult to enter the same block due to competition from too many high-priority transactions, resulting in blocked execution.

Maximum Extractable Value (MEV) rush execution by validator/miner

The miner or validator extracts the maximum extractable value (MEV) by reordering transactions within the block. Instead of processing in the order of arrival of the transaction, they prefer to execute themselves or other transactions that can lead to higher MEV, i.e. profit by manipulating the transaction sequence.

Example:

• If a miner or validator finds a large payout order, they can insert their own transaction first and buy it first.
• When the original large order is executed and the price is pushed up, they sell their positions and make profits.

Sandwich Attacks

In a sandwich attack, the attacker recognizes a large pending transaction and inserts two transactions before and after it.

Example: If a user plans to buy tokens for $1.00, the attacker will buy first, push the price to $1.10, and then sell at a high price, thereby making a profit in the case of user losses.

How to run: Step-by-step analysis

Source: Hacken

Detect profitable pending transactions

• All blockchain transactions will enter a temporary storage area before confirmation, called a "mempool".
• The runner uses a robot to scan the memory pool to find transactions that can be exploited, such as large payouts, arbitrage opportunities, or liquidation events.
• They will snatch the deals that may significantly affect the price of the asset.

Example: A trader submitted a large payout order for Token A on Uniswap, and the runner's robot detected the transaction in the memory pool.

Submit similar transactions with higher gas fees

• Once the runners identify profitable deals, they quickly create a similar deal and raise the Gas fee to prioritize execution.
• Since blockchains such as Ethereum process transactions at the high and low Gas fees, the transactions of the runners will be executed before the original transaction.

Example: The runner submits a payout for Token A and pays a higher Gas fee to make its transactions execute before the original trader's order.

The trade of the runner is executed first, driving the price up

• The price of the token rose as the runners bought first.
• When the original transaction is executed, the order can only be traded at a higher price due to price changes caused by the runner's transaction.

Example: The runner's payout has caused the Token A price to rise from $10 to $11, causing the original trader's order to be executed at a higher price.

Original transaction executed at an unfavorable price

• The original trader trades at a new, higher price without knowing it.
• They suffer greater slippage (actual transaction prices are worse than expected).
• The runners make profits due to the artificially pushed up prices.

Example: The trader who originally planned to buy Token A for $10 was finally sold at $11 due to the intervention of the runner.

Runners exit and lock in profits

• After the original trader completes the transaction, the runner sells the tokens at a higher price.
• This allows runners to make profits quickly, often at the expense of other traders.
• In some cases, the robot will repeat this process constantly, extracting profits from multiple transactions.

Example: The runner sells Token A for $11 to profit from the price difference.

Case Study

Sandwich Attack on Solana

A report released by Blockworks in 2024 confirmed that the rush event on the Solana blockchain is still ongoing. The reason is that some validators participate in private memory pools and use them to conduct "sandwich attacks". In response, the Solana Foundation imposed penalties on relevant validators.

From a design perspective, the Solana blockchain does not provide an open memory pool, and users cannot monitor pending transactions, making it more difficult to jump. However, as a primary player, validators can still view processed transactions.

Defensive rush - Curve Finance Hacker

In July 2023, Curve Finance, a decentralized finance (DeFi) platform, encountered a major security vulnerability due to a vulnerability in a specific version of the Vyper programming language used in its smart contracts. The attack targeted multiple liquidity pools, causing huge capital losses.

To cope with this situation, some ethical hackers use a kick-off strategy to fight malicious traders, who deploy MEV bots to execute transactions first to intercept and protect funds at risk. Among them, the operator named "c0ffeebabe.eth" successfully stole the attacker, preemptively protected 2,879 ETH (about 5.4 million US dollars) and then returned it to Curve Finance.

The impact of jumping on the cryptocurrency market

Restricted adoption

The rush-forwarding behavior has brought negative reputation to the cryptocurrency market, especially in decentralized exchanges (DEXs). Traders may choose to avoid these platforms if they believe that their transactions are at risk of being rush-forwarding.

Manipulate the market

Runners create false hype by manipulating market activities, misleading inexperienced traders to mistake volume growth as a positive signal, thus concealing the real value of assets.

Network congestion

Multiple rushing robots compete on the blockchain will lead to network congestion and trigger a "bidding war" for transaction processing. Ordinary users are also affected, not only will transaction confirmation slow down, but they will also need to pay higher Gas fees.

How to prevent encryption from rushing

Private transaction repeater

Private transaction repeaters in blockchain allow users to send transactions on the blockchain network without publicizing transaction details. Typically, this is done through a separate private mempool to protect the privacy of the sender and the receiver. Services such as Flashbots, Eden Network, and MEV-Blocker can help users bypass public mempools and prevent bots from detecting transactions.

Slip point protection

Setting a lower slip tolerance ensures that transactions are not executed when price changes exceed a certain range. Implementing slippage limits is critical, and the slippage percentage should usually be set between 0.1% and 5%, depending on network fees and transaction size.

Random transaction sorting

Random transaction sorting in blockchain is a mechanism to ensure that the order of transactions within the block is randomized, preventing malicious actors from using transaction order to gain unfair advantages. For example, Chainlink's Fair Sort Service (FSS) prevents Gas fee-based transaction rearrangement.

Bulk Auction

Some DeFi protocols provide batch auction functionality, namely, multiple independent orders are merged into one batch and executed simultaneously to prevent manipulation and jump-start behavior.

Layer 2 Solutions (L2) and Rollups

Layer 2 solutions, such as ZK-Rollups, can hide transaction details in mempool, thereby reducing the risk of jumping out.

Avoid peak trading hours

Trading during off-peak hours reduces the risk of being kicked out, as runners are usually more active during trading active hours.

Rate limit

Limiting the transaction frequency of a single address can prevent runners from working because they usually operate by submitting transactions quickly at high frequency.

Smart contract audit

Smart contracts are regularly reviewed by well-known audit companies to identify vulnerabilities that may be vulnerable to snatch or other malicious attacks.

in conclusion

The rush to the table hurts the reputation of the cryptocurrency market and undermines its goal as a more equitable alternative to traditional financial markets. Although tracking runners is challenging, there are a variety of solutions that can be used to reduce this behavior, including anti-MEV (maximum extractable value) tools, Layer 2 solutions, private trading repeaters, and new decentralized exchange architectures.

The blockchain community can also implement mechanisms to punish miners and validators who make profits by using transaction sorting. Instead, moral rushing behaviors like those in the Curvance hack should be encouraged. As the industry develops, promoting fairer trading practices will help build trust and integrity in decentralized finance, thus creating the necessary conditions for widespread adoption.

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