Opinion: Loring Harkness, commercial head at Brainbot GmbH and Snife

At the beginning of this year, the Ethereum Foundation introduced a security initiative worth $ 1 trillion, the development of a wider campaign aimed at adapting the image of the network to the recent audience of retail investors from outside Crypto, Wall Street and customary financial institutions.

On paper, the initiative is nothing but a good thing. Ethereum, recognizing his shortcomings is refreshing. The proposed approach also offers a clear path to being “much larger” in the field of security – a direction that will provide an industry that we hope to attract to cryptocurrencies in peace. However, in the case of the Ethereum security problem, too much transparency is essentially a problem.

Dream worth $ 1000

Ethereum Foundation Dollars trillion initiative He considers success as a world in which “billions of people feel comfortable, storing over 1000 USD on Onchain.” If we assumed a constant trajectory based on Current growth rate In the case of unique portfolio owners on Ethereum, this milestone is less than a decade. When the Ethereum celebrated the 10th anniversary of July 30, we accept colossal mass adoption of the chain at the institutional and retail level.

Basically, this progress is within Ethereum range. DEFI protocols on Ethereum are managing now $ 64 billion In total blocked value (TVL). The increased involvement of the Foundation in the Wall Street giants, such as Blackrock, Fidelity, JPMorgan and Robinhood, saw that customary financial juggernauts publicly included financial products based on Ethereum, confirming the maturity of Blockchain.

Despite the activities of Ethereum, preparing the reputation, researchers and innovators of Blockchain are increasing more and more urgently alarms With a malignant degree of maximum extraction (MEV), especially in Ethereum.

From 2020 Over $ 1.8 billion He was separated by MEV at Ethereum, mainly at the expense of everyday users through malicious MEV. Some may say that all this is part of the Defi game. In fact, this is extremely unfair, especially when the natives from outside the web3 appear, a population, which is billions of users that Ethereum wants to convince.

Ordering Ethereum transactions

The architecture of Ethereum reveals fundamental susceptibility: its currently unwashed public Mempool. Each transaction processed on Ethereum must go through public Mempool, where transactions are broadcast for everyone – including bad actors and bots – before confirmation. At this stage, bots attack transactions on the list and re -ordering for profit.

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This crystal clear construction, originally intended for increasing verification, creates an ideal environment for predatory entities for analyzing expecting transactions and manipulation of ordering transactions in their favor.

Another reality is that sandwich attacks, ancestors and other malicious mev feats are in the regulatory gray zone. Although there are some development In the work at the European Office of Securities and Markets (ESMA) in order to solve this problem, there is no formal police framework of this activity, and there are no consequences that attract the attackers for settlement.

Devoting complete transparency

This is not a recent problem, and there are solutions that claim that they deal with malicious MEV. The dominant alternatives give priority, giving users a more equal piece of cake, not an candid chance. Current private transaction pools create a risk of centralization and often simply transfer MEV to various actors instead of eliminating it.

Mev-Boost tries to democratize MEV extraction, but they don’t eliminate it. It spreads MeV profits between builders and applicants, while users still suffer from frontal attacks and sandwiches.

The only reliable solution of the malicious MEV Ethereum crisis is to redesign how the transactions flow through the network. This answer involves encrypting Mempool Ethereum, using a decentralized system in which the distributed network of pages temporarily encrypts all transactions until the transaction is completed.

Crocrying transactions until they are permanently placed in the block, allows us to achieve levels in which malicious MEV becomes practically impossible. The encrypted Mempool to Ethereum would change the user’s impressions, automatically providing all users with protection at the protocol level against malicious MEV, without having to take any action.

Most people would never change RPC or DEX, so the only real solution is to make the default value. It would also eliminate the need for today’s mosaic of centralized MEV tools that have helped limit some attacks, but did not stop the malicious MEV.

This encrypted Mempool system seems elementary, but would represent a mass architectural change for Ethereum.

This would require changes to the basic Ethereum protocol. The code changes needed will affect the most basic Ethereum components – transaction propagation mechanisms, consensus protocols and execution environment. The axis of these changes extends to many network improvements, probably requiring several years for full implementation. If Ethereum develops at a current pace, the demand for a real, long -term solution of such a threat will only escalate.

Next Ethereum movement

Because institutional capital still flows into the Ethereum ecosystem, the rates dealing with its malicious susceptibility to MEV will grow. A recent institutional adoption wave ensures a duplicitous sense of security that masks the basic technical crisis. Despite this, there is only a matter of time before institutions and users ask questions about gaps.

A security initiative worth $ 1 trillion deserves forceful community support because it is focused on this problem of the proposal of Ethereum values: Can we trust that the network will fairly process our transactions?

The technological path to integrity on Ethereum is clear: encrypted Mempools. What remains to see is whether the Ethereum community decides to implement these changes before the erosion of institutional trust.

The price chart may look promising today, but without a solution to the malicious MEV crisis, Ethereum’s long -term security and profitability remain threatened.

Opinion: Loring Harkness, commercial head at Brainbot GmbH and Snife.

This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.