Financial markets moving "on-chain" face a critical issue: blockchain front-running through Maximal Extractable Value. On many blockchains, validators determine transaction order within batches, creating opportunities to see and reorder pending trades. Observable MEV extraction already exceeds hundreds of millions of dollars, with costs scaling if traditional assets migrate to these systems.

Traditional markets prohibit front-running through explicit price-time matching rules. While some MEV reflects arbitrage, profit from controlling transaction sequence—trading ahead of visible orders—constitutes exploitation. Unlike high-frequency trading within fixed rules, MEV increases end-user costs by altering transaction order after arrival.

Blockchain selection represents a market structure decision with direct consequences. Regulators should enforce existing front-running prohibitions and encourage tokenizing assets on chains with appropriate privacy, limited pre-trade visibility, and clear ordering rules. These features are not inherent but design choices that determine whether blockchain markets function fairly for all participants.