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Mitigating MEV via Multiparty Delay Encryption
Authors: Amirhossein Khajehpour, Hanzaleh Akbarinodehi, Mohammad Jahanara, Chen FengAbstract:
Ethereum is a decentralized and permissionless network offering several attractive features. However, block proposers in Ethereum can exploit the order of transactions to extract value. This phenomenon, known as maximal extractable value (MEV), not only disrupts the optimal functioning of different protocols but also undermines the stability of the underlying consensus mechanism.
In this work, we present a new method to alleviate the MEV problem by separating transaction inclusion and execution, keeping transactions encrypted before execution. We formulate the notion of multiparty delay encryption (MDE) and construct a practical MDE scheme based on time-lock puzzles. Unlike other encryption-based methods, our method excels in scalability (in terms of transaction decryption), efficiency (minimizing communication and storage overhead), and security (with minimal trust assumptions). To demonstrate the effectiveness of our MDE scheme, we have implemented it on a local Ethereum testnet. We also prove that with the presence of just one honest attestation aggregator per slot, the MEV threat can be significantly mitigated in a practical way.
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