Mitigation of Transaction Manipulation Attacks in UniSwap

Bachelor thesis (2021)

Authors

A. Tatabitovska Electrical Engineering, Mathematics and Computer Science

Contributors

O. Ersoy Data-Intensive Systems - EEMCS (supervisor 1)
Z. Erkin Cyber Security - EEMCS (supervisor 2)
Julián Urbano (coach)
Faculty
Electrical Engineering, Mathematics and Computer Science
Copyright: © 2021 Ana Tatabitovska
Blockchain Ethereum UniSwap Front-running Transaction Manipulation Slippage Decentralized Finance Systems
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Published Date

01-07-2021

Language

English

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Faculty

Electrical Engineering, Mathematics and Computer Science

Abstract

Front-running is the illegal practice of obtaining information unavailable to the general public with regards to upcoming transactions and performing actions based on this knowledge as to gain profit. This type of attack has been an issue since the introduction of the first stock market and it is not a surprise it has spread into blockchain technologies. With the invention of Decentralized Exchange Systems, this type of exploit has been an even more common occurrence that puts both the user and system at a disadvantage. This paper aims to explore the circumstances that enable front-running in UniSwap, one of the most used DeFi Systems as of the writing of this paper. Factors such as lack of privacy, slippage, as well as a miner’s role in the exploit are analysed in a broad and UniSwap-centered context to provide more insight to the problem. Moreover, this paper analyses a potential adjustment of a commit-reveal scheme, a time lock scheme, and off-chain slippage limit as possible solutions and an overall analysis of the proposed solutions. Through comparison and adjustments of different solutions, this paper strives to expose where the root of the problem lies - the Ethereum blockchain itself.