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What decentralized exchanges can — and can't — do about market manipulation

While high-profile hacks get all the headlines, decentralized exchanges are facing a longer-term challenge: market manipulation. With the promise of transparent on-chain trading, DEXs are, to advocates, an alternative to opaque and at times corrupt traditional markets. At the same time, the novelty of decentralized exchanges has opened up new means of market manipulation. Researchers at the University of Luxembourg identified a total of 199,725 attacks and 1,580 attacker accounts using frontrunning across five years of the Ethereum blockchain, most of which were novel forms of manipulation enabled by the way DEXs interact with the blockchain.