BEP-547: Encrypted Mempool for Binance Smart Chain

BEP
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Encrypted Mempool for Binance Smart Chain

Here is the discussion thread for BEP-547: Encrypted Mempool for Binance Smart Chain.

Summary

This proposal outlines an initiative to implement a distributed (threshold) encrypted mempool for the Binance Chain, aimed at thwarting front-running and adding a robust layer of real-time censorship resistance. Motivated by the ethical vision of the BNB Good Will Alliance—which seeks to foster best practices and safeguard user interests—this proposal suggests that validators on Binance Chain can take a practical step by committing to include encrypted transactions in block proposals. These encrypted transactions are ordered and committed before decryption, ensuring that transaction details remain hidden until after the block is finalized, effectively eliminating the opportunity for front-running, as has already been demonstrated on the Gnosis Chain.

At a high level, the system allows users to submit transactions in an encrypted format while validators process them without decryption. Once the transaction order is locked in, the transactions are decrypted and executed using a distributed threshold encryption/decryption mechanism. The threshold decryption can be performed either by the Binance validators themselves or by a dedicated Shutter Keyper set, which is selected by a purpose-built DAO (Shutter DAO 0x36). This ensures that no single entity can control or manipulate the transaction order to their advantage or insert transactions with knowledge that they gained through unfair advantage.

On an implementation level, validators that will use the upcoming Erigon v3 client on Binance Chain are going to have the option to register for processing encrypted transactions. This process integrates this feature without disrupting the existing workflow. Erigon is actively developing a second client implementation for this specific purpose so that a version of Erigon v3 will be capable of processing encrypted transactions. The new release and feature will soon be available for BSC.

Importantly, this mechanism is entirely opt-in: regular transactions will continue to be supported while users and RPCs gain the added choice of utilizing enhanced privacy features.

This proposal is a joint effort by brainbot GmbH, Erigon, and NodeReal, reflecting our collective commitment to advancing the Binance ecosystem and supporting its validator community. While we are excited about the potential of an encrypted mempool to enhance transaction fairness, improve censorship resistance, and deter malicious MEV activities, this document does not yet commit to specific assignments, milestones or resources. Detailed implementation tasks and deliverables will be defined in subsequent phases, ensuring that the transition is smooth and leverages existing technology already proven on networks like the Gnosis Chain.

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Hey there! Norswap here, from HappyChain and formerly Optimism where I wrote most of the specs of the OP stack.

Writing in support of this proposal — truly believe encrypted mempools are the best way to tackle the issue of MEV and give people the best execution. According to my own research, any system that wants to seriously tackle the issue of MEV needs a way to make transactions private (to avoid frontrunning and sandwiching) and amongst those system, and encrypted mempool is the most credibly neutral one (no ability to choose and pick, or censor, which is much harder to achieve with something like a TEE-based solution).

Shutter’s system is stable and mature, and has been running in production at Gnosis Chain for the bettter part of a year. BSC is in another league when it comes to trading volume however, and stands to gain even more for its users with this deployment.

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