Encrypted Mempool: Ethereum's Solution Against MEV and Censorship

The Maximum Extractable Value (MEV) has become one of the biggest security challenges on Ethereum. Validators and builders can manipulate the order of transactions to extract profits at the expense of ordinary users, generating sandwich attacks that degrade the network experience. In response, the Ethereum research community has been exploring innovative mechanisms.

The solution comes in the form of a new initiative aimed at revolutionizing how transactions are handled before being included in blocks. It is a proposal that introduces a protocol-level encrypted mempool, allowing transactions to remain hidden until the exact moment they are incorporated into the blockchain. This dual approach is compatible with both private and traditional public transactions.

How This New Encrypted Mempool Works

The proposed system supports multiple decryption schemes, providing flexibility for the network to adapt to different needs. Transaction privacy is maintained from issuance to block inclusion, eliminating vulnerability windows where third parties can observe and exploit information.

This infrastructure directly addresses two critical issues: on one hand, it significantly reduces front-running and sandwich attacks affecting traders; on the other, it increases resistance to censorship attempts, as validators would have less information to discriminate which transactions to include.

Alignment with Ethereum’s Roadmap

The proposal fits seamlessly into Ethereum’s development plans, particularly with initiatives like ePBS (Encrypted Proposer-Builder Separation), which aim to further decentralize block construction and reduce power concentration in the hands of large validators.

By strengthening transaction privacy and network decentralization, Ethereum not only improves its fundamental security but also provides a better experience for its users, especially those engaging in DeFi operations where every millisecond counts.