Skale launches BITE Protocol to eliminate malicious MEV attacks

Layer 1 blockchain SKALE is launching a new consensus-level solution designed to eliminate Maximal Extractable Value, the scourge better known as MEV, a persistent issue in decentralized finance.

The new tool, called the BITE Protocol (short for Blockchain Integrated Threshold Encryption), draws inspiration from the way traditional finance typically handles transaction ordering to eliminate front-running, sandwich attacks, and sniping. 

Since Ethereum’s switch to proof-of-stake, blockchain users have lost out on over $1 billion worth of value from malicious MEV exploits, according to some estimates. MEV refers to the profit that validators can extract by reordering, excluding, or prioritizing transactions, often at the expense of regular users through higher gas fees or missed trades.

By encrypting transactions before they enter the mempool and decrypting them only after block finalization, BITE adds a layer of privacy that could level the playing field for all users.

The protocol aims to prevent any blockchain user — including the validators who build the blocks that make up a blockchain — from accessing transaction contents before finalization, effectively blocking third parties from identifying and exploiting valuable transactions.

Some validators, like “jaredfromsubway.eth" specialize in MEV extraction. Jared is estimated to have performed tens of thousands of sandwich attacks, causing millions of dollars worth of losses for traders. 

While various solutions have emerged to address MEV — including private mempools and “fair transaction processing” — SKALE CEO Jack O’Holleran argues that BITE represents a step forward by tackling the issue at the consensus layer itself.

“Rather than applying band-aid solutions to the MEV problem, BITE addresses it at its root through cryptographic guarantees in the consensus layer itself,” O'Holleran said in a statement. “BITE Protocol encrypts consensus and completely removes MEV from blockchain, finally putting an end to front-running, sandwich attacks, time bandit attacks, and other methods of taking value from end users.”