Flash Freezing Flash Boys: Per-transaction encryption to fight malicious MEV
Flash Freezing Flash Boys is a novel proposal for per-transaction encryption to prevent frontrunning.
Malicious MEV attacks pose a significant threat to traders on Ethereum. Our latest research shows that almost 2,000 sandwich attacks happen daily and more than $2 million is extracted from the network each month. Even traders who execute large WETH, WBTC or stable swaps remain at risk and can lose a substantial portion of their trades.
MEV thrives because of the transparent nature of blockchains, where transaction data is visible before transactions are executed and finalized. One path toward mitigating MEV is mempool encryption, particularly through the use of threshold encryption. In our earlier articles, we examined two different models for threshold-encrypted mempools. Shutter, one of the first projects to apply threshold encryption to protect the mempool, introduced a per-epoch setup. Batched threshold encryption (BTE), a newer model, decrypts multiple transactions with a single key to reduce communication costs and raise throughput.
In this piece, we analyze Flash Freezing Flash Boys (F3B) by H. Zhang et al. (2022), a newly proposed threshold encryption design that applies encryption on a per-transaction basis. We explore its mechanics, explain its scaling properties as concerns latency and memory, and discuss the reasons it has not yet been deployed in practice.