Understanding MEV and its influence on blockchain users
Transparency is one of the basic features of blockchain, but it enabled the extraction of value by controlling the order and enabling transactions in the block known as MEV or maximum extraction value.
This problem is common in most blocks and is rooted in the public nature of Mempools, a book that stores the transaction expecting data. This information allowed the manufacturers of blocks of flats and other entities to operate transactions on Frontrunning.
Mev is particularly known in Ethereum, where it is it is still separated According to an equivalent rate, 11% of block awards. The data show that almost USD 300,000 was Lost in sandwich attacks In September. This reveals that MEV is a repeated hidden fee, not a miniature inefficiency, reaching immense transactions on unstable markets.
Low -shutter threshold encryption as MEV solutions
Among the number of mev relief measures, several cryptographic solutions were proposed, including threshold encryption and homomorphic encryption. These techniques encrypted the content of the transaction before entering Mempool and keep them in secret until the transaction order was finalized. This means that block manufacturers before mining MEV by manipulating transaction sequencing. However, at the research stage there are most of the encrypted Mempool architecture.
Snapshot It was the first threshold protocol designed specifically to solve MEV. Today it stands out as the only approach based on the thresholds with real implementation, lives on Gnoza chain Mainnet.
Threshold encryption is a cryptographic technique that divides the key to decryption in the Committee of key owners so that no single side can decipher the transactions on their own. In most encrypted thresholds, the committee is leading for the first time Generating distributed keys (DKG) The process of producing a public key, as well as key shares for each member. Users can then encrypt their transactions using this public key and send cipher to the network.
Block applicants order these ciphers in the block, and after completing the block or disclosure, each member of the Committee publishes participation in the action. The required number of valid shares from the Committee is then combined to recover ordinary text transactions. As in the Multisig configuration, the qualified majority of the committee participants is enough for this. After sequencing and deciphering the transactions, they are made by the virtual machine of the network.
The threshold committee acts as an offchain service that works next to blockchain. This design makes it a consensitic, which means that it can be used in most block chains without the need to change consensus rules. It is essential, however, to remember that, unlike the set of validators, the committee is usually a strictly admitted structure to be trusted. In the snapshot, members of the committee, so -called KeyboardThey are chosen by the management of the protocol.
The initial shutter design used EPoch encryptionwhere users encrypt transactions under the current era of the base chain. This was to improve efficiency and reduce delays by cushioning intensive decryption of computation in many transactions. However, this project created a critical disadvantage. When the key of the era has been reconstructed, all transactions from this era became public, even those that have not yet been included in the blocks. This may reveal some network users on MEV.
This problem was repaired In real implementation in the gnosis chain, where the shutter used the transaction encryption. . Snapped beacon chain Gnosis currently acts as an alternative on the chain RPC end pointwhich encrypts transactions and transmits encryption cipher to the sequencing contract. After regularly flowing of the threshold encryption, after taking into account the transaction in the block and approved, they are decrypted and performed.
Crocry transaction trades efficiency for simplicity, because the burden of the committee increases linearly along with the transaction capacity, and not remaining roughly constant, as in the design of eras. Further development of MEMPOOL threshold encryption can improve this compromise.
The shutter syndrome predicts this Promotion encryption (BTE) This is a potential way to solve the defects of both epoch schemes and transaction. BTE maintains the committee’s burden almost indefinite, while maintaining the privacy of transactions that are not included in the block.
In addition to the gnosis shutter chain, the Shutter team is working on encrypted MEMPOOL module for pile OPwhich is live on testnet optimism. This module supports the encryption of eras and eliminates the problem of the initial shutter design, because the transactions are associated with a specific block. The transaction transfers information about the target block, and the contract checks the current block during execution, so it only succeeds when it lands in this block. If the target block is missing, the inspection is not said, and the transaction returns, after which it can be re -sent to the fresh block.
Despite the promise of alleviating Mev, the shutter is not fully non -fat today, because users rely on the permissible key set. Another limitation is the high delay in the current implementation of Gnos, which means that the shutter in its current form has confined potential. While gnosis blocks are produced every five seconds, shutter transactions are currently on average about three minutes to turn on, caused by Restricted number of validators and flashing keyboards. The Shutter team is planning a practical path and a road map outside the protocol towards a fully encrypted and more minimized Mempool at Ethereum by trust. This step, however, will require gradual work in the field of wallets, RPC, relays, builders and incentives of validators, and then support in-depth, after which the same modules can extend to other EVM chains.
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