Unveiling Front Running : A Detailed Examination of Replay Attacks and Decentralized Oracle Vulnerabilities in Blockchain Systems

Abstract

Although blockchain technology has made decentralization possible for the storage of data, openness, security, and truth are essential in a blockchain network. Oracles, which serve as bridges between blockchains and external data feeds, can also threaten the blockchain’s integrity by storing bad or inaccurate data.Additionally, Miner Extractable Value (MEV) has emerged as a major concern in the DeFi space.MEV is the profit obtained due to manipulating the order of operations in blockchain with MEV bots, causing financial losses from transaction fees and commissions. DeFi systems need to remain secure from such attacks as the oracle attacks that expose the system to substantial risks of losing money. Additionally, insufficient knowledge of how Oracle works increases the risks of compromising the DeFi system on a protocol level. This paper will use the example of how to move assets from Ethereum to Polygon and will focus on the possible dangers. It also offers an implementation model of a replay (front-running) attack and demonstrates how an attacker may choose transactions and benefit from the system at higher costs. This compromises decentralized oracles and results in losses in transactions through the reversal of order.