Shutter has deployed its threshold encryption protocol on the Gnosis Chain mainnet to address the issue of maximal extractable value (MEV), a problem prevalent in blockchain transactions. MEV allows block producers to manipulate transaction order for profit, significantly impacting Ethereum where it accounts for 11% of block rewards. Shutter's solution encrypts transactions before they enter the mempool, preventing frontrunning by concealing transaction details until they are finalized.
The protocol uses a committee of keyholders to manage decryption, ensuring no single party can access transaction data alone. Initially, Shutter's design used per-epoch encryption, which exposed transactions to MEV risks. This has been rectified with per-transaction encryption on Gnosis Chain, trading efficiency for enhanced security. Shutter is also developing an encrypted mempool module for the OP Stack on Optimism testnet, aiming to further mitigate MEV while maintaining transaction privacy.
Shutter Implements Threshold Encryption to Combat MEV on Gnosis Chain
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