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Back Running Meaning

Back running is a trading behavior where a transaction is deliberately placed immediately after a known large transaction in order to profit from its market impact. It is commonly associated with MEV (Maximal Extractable Value) strategies on blockchain networks. In back running, the trader anticipates that a large buy order will push prices upward.

By placing a sell order directly after that transaction is executed, the back-runner aims to capture the price movement created by the original trade. Unlike front-running, which harms the original trader by worsening execution, back running typically exploits residual price effects.

Back running is possible because validators and MEV searchers can observe pending transactions in the mempool before they are finalized. By controlling transaction ordering within a block, they can strategically insert their own trades to capture arbitrage opportunities.

On its own, back running may have minimal impact on the initial transaction. However, when combined with front-running, it forms a sandwich attack, where the victim is adversely affected on both entry and exit prices.

This has raised concerns around fairness, transparency, and execution quality in decentralized markets. As a result, back running has become a focus area for MEV mitigation efforts, including private transaction pools, batch auctions, and order protection mechanisms.

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