When a user creates a swap transaction on Uniswap, it goes into the ETH transaction queue (prioritized by gas amount). If a bot notices that a user has a large swap (say swapping $1.5M USDC for 1K ETH), a bot could theoretically 'front-run' the order (by paying a higher gas fee than the original swap) and inject say, $10M of liquidity into the expected price-band of movement caused by the trade. They could then pocket a portion of the transaction fees (whatever their fraction of the 0.3% trade fee that Uniswap charges is), and then immediately pull the liquidity out of the LP to then wait for another front-running opportunity.
This doesn't harm the person doing the swap, per se. It harms the Liquidity Providers that hold their capital in the pool for longer term.
This doesn't harm the person doing the swap, per se. It harms the Liquidity Providers that hold their capital in the pool for longer term.