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Transaction Sequencing Attacks Meaning

Transaction sequencing attacks involve manipulating the order of pending transactions within a block or mempool to extract value. In blockchains like Ethereum, where smart contracts and decentralised finance protocols often rely on transaction ordering, malicious actors or MEV (Maximal Extractable Value) bots can front-run or sandwich other users’ transactions.

For example, by inserting their own buy and sell orders around a large trade, an attacker can profit from the price impact while the unsuspecting user receives a worse execution. Such attacks are facilitated by miners or validators who control block assembly and can reorder or include transactions in a way that benefits them.

Beyond DeFi, transaction sequencing attacks exist in traditional settings (e.g., credit card processing) whenever there is an opportunity to gain by altering the order of settlement. Protocols and researchers are exploring mitigations like randomised transaction ordering, private mempools, and encrypted order flow to reduce the risk of these attacks.

Awareness of transaction sequencing is vital for developers and traders because it highlights the importance of designing smart contracts and trading strategies that minimise the potential for front-running and other adversarial behaviours.

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Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

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