Paper 2023/1061

BlindPerm: Efficient MEV Mitigation with an Encrypted Mempool and Permutation

Abstract

To mitigate the negative effects of the maximal extractable value (MEV), we propose techniques that utilize randomized permutation to shuffle the order of transactions in a committed block before execution. We argue that existing approaches based on encrypted mempools cannot provide sufficient mitigation, particularly against block producer, and can be extended by permutation-based techniques to provide multi-layer protection. With a focus on PoS committee-based consensus we then introduce BlindPerm, a framework enhancing an encrypted mempool with permutation and present various optimizations. Notably, we propose a protocol where this enhancement comes at essentially no overheads by piggybacking on the encrypted mempool. Further, we demonstrate how to extend our mitigation technique to support PoW longest-chain consensus. Finally, we illustrate the effectiveness of our solutions on arbitrage and sandwich attacks as the two main types of MEV extraction through running simulations using historical Ethereum data.