ASSESSMENT OF THE PROBABILITY OF SUCCESS OF A FRONTRUNNING ATTACK ON SMART CONTRACTS

Abstract

A frontrunning attack is one of the most common attacks on smart contracts. Its essence lies in manipulating the order of transaction inclusion in a block to gain an advantage by altering the transaction processing sequence. This attack poses a particular threat to the conduct of p2p auctions for selling “green” electricity. In this paper, different types of such attacks are examined, analyzed, and formalized in step-by-step execution algorithms. Next, a model is proposed to assess the probability of success of such an attack. An explicit formula is derived for the probability of success of a displacement attack and an insertion attack, which are specific cases of a frontrunning attack. The probability of success is shown to depend on network parameters and the ratio between the transaction fees created by an honest user and a malicious user. Numerical examples of practical applications of the derived formula are provided, further confirming the correctness of the analytical results. Keywords: blockchain, smart contracts, auctions, p2p sales of “green” electricity, frontrunning attack.