A simple strategy for Uniswap?

Front-runners take lots of money on Uniswap. The question is if there is a simple-but-better strategy to pay less money to front runners.

One strategy I came up with is to write a script that observes Uniswap pending transactions and issues matching ones.

As an example, if I want to buy, say, 10 tokens of X, the script will wait until it sees someone in the pending queue selling, say, 6 tokens, and then immediately issue a high gas price transaction to buy 6 tokens.

The question is whether the strategy above is better than simply buying on Uniswap immediately.

I don’t know of cheaper way to suffer as a result of getting front-run. But I think I have a way to counteract the front-runners. Front-runners behave like HFTs in the traditional markets whereby HFTs have early access to all incoming orders to front-run before anyone else can see such orders, but the only difference is crypto front-runners refer to the blockchain pending transactions to front-run large orders.

So one possible way (example) to counteract this parasitic and unproductive behavior is to send huge fake sell transaction order (if you want to buy) at very low gas (to ensure it will take a long time for confirmation) while you also queue with a genuine buy order at the same time, so that front-runners will front-run your huge fake sell order by selling at slightly lower price to your genuine buy order. Once your genuine buy order gets filled, you can quickly cancel out your huge fake sell order by sending a new transaction to yourself (same nonce as that huge fake sell order) at much higher gas for faster confirmation to override that previously huge fake order. Vice versa if you want to genuinely sell.

2 Likes

Interesting :))

I will try :slight_smile: