The transaction ordering dependency of the smart contracts building decentralized exchanges (DEXes) allow for predatory trading strategies. In particular, front-running attacks present a constant risk for traders on DEXes. Whereas legal regulation outlaws most front-running practices in traditional finance, such measures are ineffective in preventing front-running on DEXes due to the absence of a central authority. While novel market designs hindering front-running may emerge, it remains unclear whether the market's participants, in particular liquidity providers, would be willing to adopt these new designs. A misalignment of the participant's private incentives and the market's social incentives can hinder the market from adopting an effective prevention mechanism. We present a game-theoretic model to study the behavior of traders and liquidity providers in DEXes. Our work finds that in most market configurations, the private interests of traders and liquidity providers align with the market's social incentives - eliminating front-running attacks. However, even though liquidity providers generally benefit from embracing the market that prevents front-running, the benefit is often small and may not suffice to entice them to change strategy in reality. Thus, we find that inert liquidity providers might require additional incentives to adopt innovative market designs and permit the market's successful self-regulation.

翻译：构建去中心化交易所（DEX）的智能合约存在交易排序依赖性，这为掠夺性交易策略提供了可乘之机。尤其是，前端运行攻击对DEX上的交易者构成了持续风险。尽管法律监管在传统金融领域将大多数前端运行行为定为非法，但由于缺乏中心化权威机构，此类措施在预防DEX上的前端运行时效果有限。尽管可能涌现出阻碍前端运行的新型市场设计，但市场参与者（尤其是流动性提供者）是否愿意采纳这些新设计仍不明确。参与者私人激励与市场社会激励之间的错位可能阻碍市场采用有效的预防机制。我们提出了一个博弈论模型，用于研究DEX中交易者和流动性提供者的行为。我们的研究发现，在大多数市场配置下，交易者和流动性提供者的私人利益与市场的社会激励（即消除前端运行攻击）相一致。然而，尽管流动性提供者通常能从采纳预防前端运行的市场中获益，但收益往往较小，可能不足以诱使他们在现实中改变策略。因此，我们发现，惰性的流动性提供者可能需要额外的激励来采纳创新的市场设计，从而允许市场成功实现自我调节。