The AMMazing Frontrunner: Practical Frontrunning on the XRP Ledger Automated Market Maker

Abstract

Often referred to as A Dark Forest, Ethereum is home to predatory trading bots that prey on user transactions. Frontrunning is made simpler on Ethereum as builders & validators are incentivised to process the highest fee transactions first. One suggested mitigation strategy is to process transactions in a pseudo-random order, preventing frontrunners from predictably affecting transaction execution order. XRP Ledger, one of the oldest blockchains to use pseudorandom ordering, is launching an Automated Market Maker. This study investigates whether frontrunning techniques commonly observed in Ethereum Automated Market Makers are feasible on the XRP Ledger Automated Market Maker. In summary, our findings demonstrate that with minor adjustments, the conventional Sandwich Attack is feasible. Additionally, we unveil a distinctive attack facilitated by the integration with the Close Limit Order Book.