@inproceedings{d9835de3e1cc4454b0d94324d7c878d2,
title = "FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker",
abstract = "Frontrunning is a major problem in DeFi applications, such as blockchain-based exchanges. Albeit, existing solutions are not practical and/or they make external trust assumptions. In this work we propose a market-maker-based crypto-token exchange, which is both more efficient than existing solutions and offers provable resistance to frontrunning attack. Our approach combines in a clever way a game theoretic analysis of market-makers with new cryptography and blockchain tools to defend against all three ways by which an exchange might front-run, i.e., (1) reorder trade requests, (2) adaptively drop trade requests, and (3) adaptively insert (its own) trade requests. Concretely, we propose novel light-weight cryptographic tools and smart-contract-enforced incentives to eliminate reordering attacks and ensure that dropping requests have to be oblivious (uninformed) of the actual trade. We then prove that with these attacks eliminated, a so-called monopolistic market-maker has no longer incentives to add or drop trades. We have implemented and benchmarked our exchange and provide concrete evidence of its advantages over existing solutions.",
keywords = "Blockchain, Fairness, Front-running, Market maker",
author = "Michele Ciampi and Muhammad Ishaq and Malik Magdon-Ismail and Rafail Ostrovsky and Vassilis Zikas",
note = "Publisher Copyright: {\textcopyright} 2022, Springer Nature Switzerland AG.; 6th International Symposium on Cyber Security Cryptography and Machine Learning, CSCML 2022 ; Conference date: 30-06-2022 Through 01-07-2022",
year = "2022",
month = jun,
day = "23",
doi = "10.1007/978-3-031-07689-3_31",
language = "English",
isbn = "978-3-031-07688-6",
series = "Lecture Notes in Computer Science",
publisher = "Springer, Cham",
pages = "428--446",
editor = "Shlomi Dolev and Amnon Meisels and Jonathan Katz",
booktitle = "Cyber Security, Cryptology, and Machine Learning - 6th International Symposium, CSCML 2022, Be'er Sheva, Israel, June 30 – July 1, 2022, Proceedings",
}