Ending Sandwich Attacks on BNB Chain: Shutter Network Proposes Encrypted Mempool Solution

Open-source protocol Shutter Network has announced a proposal to implement a threshold-encrypted mempool on BNB Chain to eliminate Maximal Extractable Value (MEV) activity, such as front-running and sandwich attacks, and add a layer of real-time censorship resistance.

According to the press release shared with Cryptonews, should it launch, the encrypted mempool would provide “complete protection” from front-running and sandwich attacks.

Next, the move would reduce opportunities for transaction interference, ensure a finalized order before content is visible, and support both encrypted and regular transactions.

Additionally, to decrease centralization, the system utilizes a decentralized approach so that a single party cannot decrypt or manipulate any transaction.

Per the proposal, Shutter Network’s initiative is “motivated by the ethical vision of the BNB Good Will Alliance.” The latter, says the team, works to protect user interests.

Therefore, it proposes that validators on Binance Chain can include encrypted transactions in block proposals. The team explains that when a user submits a transaction, the solution encrypts it before it enters the mempool. This means that validators, builders, and bots can see the contents. Transactions are decrypted only after block finalization, and transaction order is locked in.

This “effectively eliminate[es] the opportunity for front-running, as has already been demonstrated on the Gnosis Chain,” it claims.

Shutter Network adds that the proposal is a joint effort by brainbot GmbH, Erigon, and NodeReal. They submitted it as a BNB Chain Evolution Proposal (BEP) for BNB Chain community consideration.

Meanwhile, the proposal doesn’t “yet commit to specific assignments, milestones, or resources.” The team says that it would define implementation tasks and deliverables in future phases.

Encrypted Memepools Are Crucial, Vitalik Buterin Says

Shutter Network argues that there has been an increase in MEV activity on BNB Chain. It impacted more than $1.5 billion in DEX trades in a single day in late 2024. Binance founder Changpeng Zhao was also a recent victim, the announcement highlights.

Meanwhile, Ethereum co-founder Vitalik Buterin has named encrypted mempools as “crucial” components to a successful implementation of many of the designs that would combat the issues of value extraction. He explained that encrypted mempools are “a technology where users broadcast their transactions in encrypted form, along with some kind of proof of their validity. […] The transactions are included into blocks in encrypted form, without the block builder knowing the contents.”

Furthermore, Luis Bezzenberger, Head of Product at brainbot, a core contributor to Shutter Network, argues that most current MEV solutions address this issue at the surface level. Furthermore, they introduce centralization and rely on manual processes to blacklist users.

“While these may offer short-term relief, they’re difficult to sustain over the long term,” Bezzenberger says. “If validators want to show true goodwill to the BNB Chain community, the single most impactful step they can take is to commit to processing encrypted transactions by implementing an encrypted mempool using (distributed) threshold encryption.”

Meanwhile, Shutter Network’s proposed threshold-encrypted mempool has been live on a dedicated OPstack testnet since March 2024 and on Gnosis Chain since July 2024. It has also created a whitepaper for implementing this method on the Ethereum mainnet.

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