Encrypt Ethereum Mempool to Limit Transparency and Curb MEV
Ethereum transparency is under scrutiny due to the protocol’s public, unencrypted mempool. This open design has enabled over $1.8 billion in malicious MEV since 2020. Sandwich attacks, frontrunning, and transaction reordering now threaten fair blockchain use.
The proposed solution is a protocol-level encrypted mempool. By encrypting pending transactions until they are finalized in blocks, MEV extractors lose their advantage. This would create a default fairness layer without requiring users to change wallets or RPC endpoints.
Implementing an encrypted mempool demands deep changes to transaction propagation, consensus layers, and the execution environment. Rolling out these upgrades would span multiple network upgrades and could take several years.
As institutional players like BlackRock and Fidelity boost Ethereum adoption, mitigating transparency risks is crucial. Encrypted mempool adoption would strengthen security, enhance DeFi fairness, and maintain market confidence.
Neutral
Highlighting Ethereum transparency issues and the risks of malicious MEV could sow short-term concerns among traders over potential protocol vulnerabilities. However, the proposed encrypted mempool solution offers a clear technical path to mitigate these risks, which could bolster confidence in Ethereum’s long-term security and fairness. Historically, calls for major protocol upgrades (e.g., Ethereum 2.0) initially sparked uncertainty and price volatility, but successful implementations ultimately supported bullish sentiment. Thus, while traders may react cautiously in the near term due to uncertainty over upgrade timelines, the long-term impact is likely neutral to positive as protocol improvements address systemic risks.