Paper 2023/1612 Original: eprint.iacr.org/2023/1612 ↗

A Mempool Encryption Scheme for Ethereum via Multiparty Delay Encryption

Abstract

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. Furthermore, current block production architecture allows transaction censorship that compromises credible neutrality, a fundamental principle of Ethereum’s design philosophy. In this work, we present a novel $mempool$ $encryption$ scheme to alleviate the censorship and 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. 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 and prove its security under the presence of only one honest attestation aggregator per Ethereum slot.