Gnosis Chain integrates Shutter's embedded encryption to tackle MEV

Gnosis Chain worked with blockchain project Shutter to roll out a fully embedded encryption technology on its Ethereum sidechain — aiming to shield traders from malicious maximal extractable value attacks.

This integration with Gnosis marks the first mainnet implementation of Shutter’s encryption technology for blockchain transactions — designed to offer censorship resistance and prevent MEV exploitation.

Shutter developed the solution with Gnosis and client team Nethermind. Distinguishing itself from existing solutions for tackling MEV attacks, Shutter fully integrates its encryption protocol directly into blockchain networks such as Gnosis Chain.

“The Shutterized Gnosis Chain tackles significant issues focused on base-layer neutrality, countering the risk of malicious maximal extractable value (MEV), and maintaining censorship resistance,” Gnosis Chain noted. “By encrypting transaction details, the Shutterized Gnosis Chain ensures that all transactions are treated equally.”

Shutter leverages an encrypted mempool — a data structure to store unconfirmed transactions — which claims to mitigate real-time censorship, ensuring transaction details remain private until included in a block. 

Shutter makes use of threshold encryption — an encryption method that requires a minimum number of network participants called Keypers that cooperate in encrypting and decrypting transaction data.

To use encrypted transactions on Gnosis Chain, users must manually add the Shutterized Gnosis Chain RPC to their wallet.

MEV poses a major issue for blockchain users. MEV can incentivize miners or validators to act in ways that favor their own financial interests over those of the network. This can lead to centralization of power, as those who can extract the most value may gain disproportionate influence.

The pursuit of tackling MEV has led to several projects developing solutions via different mechanisms. Besides Shutter, which focuses on encryption, there are recent innovations that try to resist in different ways, including Pyth’s Express Relay, the MEV Blocker RPC and others.