Home » Ripple CTO Targets Front-Running on Its DEX: Will Schwartz Plan Work?

Ripple CTO Targets Front-Running on Its DEX: Will Schwartz Plan Work?

by John Paterson
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In XRP news today, David Schwartz, Ripple CTO Emeritus and co-founder of the XRP Ledger, has proposed a transaction reservation mechanism to prevent front-running and sandwich attacks on the protocol’s decentralized exchange.

The proposal arrives as community discussion around the XRP Ledger’s payment infrastructure intensifies, and coincides with active community voting on the XRPL 3.2.0 upgrade.

Schwartz’s proposal came with XRP USD trading at $1.04, down -0.2% on the day and dangerously close to losing the key technical and psychological support at $1, a level that, if lost, could see $0.80 revisited.

XRP News: What the TxnReserve Proposal Actually Does

The core mechanism introduces a new transaction type, TxnReserve, and a new ledger object, ReservedTxns, which holds an array of transaction IDs assigned to a specific future ledger. To book a slot, a user pays at least twice the normal transaction fee and specifies a ledger sequence number and a transaction ID in advance.

Reservations are capped at 32 slots per ledger and limited to the next 16 ledgers forward. Critically, the actual transaction is broadcast only after the previous ledger’s consensus set is known, a timing window that denies would-be front-runners the visibility they need to act. Reserved transactions then execute first, in reservation order, before all other transactions in that ledger.

Schwartz described the protection plainly: “This guarantees that you can execute your transaction ahead of any transaction that was formed after your transaction was disclosed. You would use this approach any time you want to perform a transaction that you want to ensure cannot be sandwiched or front run.”

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The Problem David Schwartz’ Proposal Is Trying to Solve

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The concern raised by XRP-focused community account XRPresso.io is that transactions on the XRPL sit in a publicly visible queue before a ledger closes.

Validators and well-connected nodes can inspect pending trades, assess whether a sandwich attack, placing orders on both sides of a target trade to extract value, would be profitable, and spam multiple transactions to game the deterministic canonical ordering decided by transaction hashes.

This is a variant of what the broader DeFi industry calls MEV (maximal extractable value): the profit available to block producers or validators who can reorder, insert, or censor transactions.

The same dynamic has plagued DEX traders on other chains; MEV and front-running concerns on high-volume DEXs have become a standard structural risk for on-chain traders across the industry.

Schwartz acknowledged the theoretical exposure but pushed back on its severity, noting that validators would need to simultaneously maintain high liquidity to make volumes worth targeting and low liquidity to move prices at reasonable cost – a contradictory requirement.

“If multiple validators did conspire, or a single validator attempted it, it would be very obvious to everyone exactly who was doing this,” he said, adding that no real-world front-running attempts have been reported on the XRPL DEX outside of proof-of-concept demonstrations.

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Critics Say Visibility, Not Fee Priority, Is the Real Fix

In other XRP news today, XRPresso.io acknowledged that while the reservation idea is interesting, the 2× fee requirement complicates things without addressing the core issue of pre-validation visibility.

They prefer a targeted confidentiality solution for pending order details, similar to the approach suggested by Binance co-founder Changpeng Zhao, which utilizes zero-knowledge cryptography to conceal order data until execution.

However, some critics argue that this privacy-centric method risks recreating insider information dynamics that public blockchains aimed to eliminate.

The ongoing discussions about the TxnReserve proposal suggest a broader rethinking of the XRPL upgrade pipeline and protocol incentives, rather than just a simple fix.

No formal vote on the proposal has taken place, and the specifications are not finalized. The community’s direction, whether it leans towards fee-based priority ordering, a privacy solution, or a hybrid, will influence the AMM and DEX infrastructure as on-chain trading grows.

Additionally, Ripple’s regulatory progress in Luxembourg under MiCA underscores the importance of ensuring DEX fairness for institutional considerations beyond just retail trading.

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The post Ripple CTO Targets Front-Running on Its DEX: Will Schwartz Plan Work? appeared first on 99Bitcoins.





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