In a traditional asset trading platform, front running is defined as the illegal practice of placing a trade based on advanced non-public knowledge of an upcoming trade which can impact prices. As shown in the example below, a broker can take advantage of a situation when he or she gets a large order by one of their clients. Since they know this order will impact the price of the asset, they place their own personal order ahead of their client’s order. Then, they place the client order, raising the stock price. Once this is done they will sell their own shares to profit off their clients order.
Another term used often is insider trading, which is based on a very similar practice of using information only they have access to in order to gain an unfair advantage over others.
In the Web3 space, everything is transparent and, ironically, revealing too much information can also create these situations. An example of this is front running on a decentralized exchange (dex) that you may have already heard of. This type of a front running is possible through the combination of having total transparency in the blockchain along with how Ethereum (and many other blockchains) prioritize transactions in a node’s mempool.
In this particular example, an attacker (usually a bot) scans the mempool to see a particular scenario that they can take advantage of. Scanning the mempool, they look for an opportunity to insert in a bid at a lower price but higher gas than another large bid already in the mempool.
Once their bid completes, they wait for the larger order to go through, raising the price of the asset. Then they place a sell order at a higher price than the buy order he placed ahead of the larger order, and pockets the difference. All this is happening in a blink of an eye, making it impossible for any normal person to be able to recognize they are being taken advantage of.
But what if we could make the orders private? This prevents the attacker from being able to read the auction details in the mempool, and making the bot unable to identify a situation to take advantage of.
Through multiparty computation (MPC), details can be kept private while still computing the winner. In the situation of this dex, the results of the prices are not revealed until the bids are completed, ensuring that attackers cannot gain any advantageous information ahead of time.
The team in Partisia has already provided solutions to solve this issue in multiple scenarios. From governments to OTC trading platforms, they have been trusted to run high stakes auctions in different levels and through enabling this technology on a blockchain, we are giving everyone the power to solve the problem of ensuring integrity in the bidding process.
For additional insights on this use case, we recommend viewing our Q&A session on this topic.
By creating a programming language that allows for developers to use MPC in a generic way, Partisia Blockchain Foundation has made the creation of applications that can harness the power of MPC for different use cases a possibility. Partisia has been at the forefront of providing private MPC solutions since 2008. And by layering this technology on top of an interoperable and scalable blockchain, Partisia Blockchain is now paving the way for anyone to create solutions that can balance privacy and transparency to build trust.
To learn more about different use cases or partner with us for solutions, please visit partisiablockchain.com, check out our Medium articles, development documentations or email me at bruce.ahn@partisiablockchain.com
As the first quarter of 2023 draws to a close, Partisia Blockchain is celebrating a successful start to the year. Our team participated in the renowned Paris Blockchain Week, where we showcased our latest solutions, including our revolutionary private voting technology. Additionally, we celebrated International Women’s Day with our Paris Hackathon winner, Thousand Faces, a community-driven investment platform that provides inclusion and accessibility for female and diverse founders. We are committed to supporting Thousand Faces’ goals and are thrilled to witness our network being utilized to address societal challenges. We also welcomed our new Head of Community, Tiago Serôdio, who will provide expert guidance on scaling and diversifying our community. At Partisia Blockchain, we remain committed to driving innovation, empowering our community, and delivering cutting-edge solutions.
We are delighted to announce the appointment of Tiago Serôdio as the Head of Community at Partisia Blockchain. With over 10 years of experience in building and running communities, Tiago’s appointment underlines our commitment to engaging our community and achieving our growth objectives. He brings a wealth of expertise in marketing campaigns and community management from his notable work at Cardano. We are excited to have Tiago on board and look forward to collaborating with him to scale and diversify our community. Additionally, we are thrilled to share that our team and collective skillset is expanding, with more Web3 professionals set to join. Stay tuned for more updates!
First and foremost, we were happy to meet our community members in Paris at the end of the month. Visitors of our booth during the Paris Blockchain Week were treated to exclusive merchandise and met with our delegation. Our community members were very supportive and active during the voting for the inaugural Paris Blockchain Week Awards. This afforded us to showcase one of our key solutions — private voting. Thousands have cast their votes and had an opportunity to experience our zero-knowledge voting. Therefore, we start our Solutions Spotlight campaign with a focus on private voting. Each week we will highlight one of our solutions and our new Head of Community, Tiago Serôdio, will lead a series of Spotlight AMAs and Q&As. The first one took place on 30 March 2023 focusing on private voting. The next ones will focus on secret surveys (6 April 2023), front running (13 April 2023) and privatized settlement layer (20 April 2023). Stay tuned!
In March, development work was mostly focused on improvements to key infrastructure functions. From fixing bugs to improving various invocations, we have been continuing to improve upon existing functionality.
In April, we plan to launch our first version of our Eth pricing Oracle on our testnet. This is an important milestone for our mainnet where BYOC transfers will now accurately reflect actual prices. This will both benefit our node operators to get more accurate fee distributions on their BYOC rewards, as well as allow for more accurate transferability on our Hermes bridge.
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Voting is an integral part of the election process. It is important to have transparent and tamper-proof voting systems that can be trusted through no single centralized authority whether it is selecting your class president in high school, voting as a shareholder in a listed company or electing government officials.
Through the distributed ledger system, we have a way to ensure transparency where all votes can be logged in an immutable record system. Each voter is accounted for in the blockchain. When the vote is cast, both voter ID as well as who or what they voted for is also recorded in a permanent way. But what about the privacy of the individuals and whom they casted their votes for?
This is one of many challenges Partisia Blockchain solves though the use of cryptography and mathematics. Through multiparty computation (MPC) technology, our solution shows verifiable proof of an accurate election without revealing any details about the voter. But how does this work?
Multiparty computation is a technology created in the 1980s that allows computation of results while keeping their input private, enabling trust between mutually distrustful parties. In the voting example, we use shamir’s secret sharing to have the smart contract create a random line that intersects with the vote details that have been vectorized. In the example below, candidate 1 is represented by 0 and candidate 2 is represented by 1. Four random points are chosen from this line, and each point is sent to a separate MPC node for computation. Through these lines, we can compute on finding the winner without revealing who each person voted for.
For additional insights on this use case, come and watch our Q&A session we did on this topic.
By creating a programming language that allows for developers to use MPC in a generic way, Partisia Blockchain Foundation has made the creation of applications that can harness the power of MPC for different use cases a possibility. Partisia has been at the forefront of providing private MPC solutions since 2008. And by layering this technology on top of an interoperable and scalable blockchain, Partisia Blockchain is now paving a way for anyone to create solutions that can balance privacy and transparency to build trust.
To learn more about different use cases or partner with us for solutions, please visit partisiablockchain.com, check out our smart contract examples or email our head of developer relations at bruce.ahn@partisiablockchain.com