Gaming Ethereum: How Trading Bots Cut the Line and Threaten Consensus

In our upcoming session, Simran Tinani, who works as a Security Engineer, will present "Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges".

In traditional markets, high-frequency traders profit by being physically faster than everyone else, racing orders across fragmented exchanges within microseconds, a practice called frontrunning. Decentralized finance collapses those venues into a single state machine like Ethereum, where every pending transaction sits in a public mempool for anyone to read. Starting from a contrast between traditional exchanges and Ethereum's execution model, the talk walks through how frontrunning reappears in this setting: DEX arbitrage, sandwich attacks, and the fee-bidding wars known as Priority Gas Auctions.

Drawing on “Flash Boys 2.0”, Daian et al. (IEEE S&P 2020), we will look at how the authors showed these bots operating in the wild, and why the revenue they extract, Miner Extractable Value (MEV), can give block producers a reason to fork the chain and rewrite history. We will close with how the industry has responded since the paper's publication.

Why care?

• For security and distributed systems people: MEV shows how a protocol can be sound at the consensus layer and still be exploitable once economic incentives enter the picture. The paper's "time-bandit attacks" make the case that transaction ordering is a security property, not a performance detail.
• For those curious about decentralized markets: the frontrunning Michael Lewis documented in Flash Boys takes a new shape when speed is replaced by transparency. On a public ledger, every order is visible before it executes, which makes the mechanics unusually easy to study.

The talk will be 45-60 minutes, followed by discussion, Q&A and snacks.
No prior background in blockchains or finance is required. However, basic familiarity with distributed systems will be beneficial.