Encrypted Mempools and Ethereum’s Next Privacy Layer: Beyond the Myth of MEV Elimination

Highlights of MEV Space #8: Merits, Myths & Milestones of Encrypted Mempools

During the 8th episode of MEV Space, our speakers explored how encrypted mempool solutions like Shutter Network don't aim to eliminate all MEV (a common misconception), but rather focus on preventing front-running and providing crucial real-time censorship resistance. The discussion covers technical implementation challenges, the synergy with other Ethereum upgrades like Fossil and EPBS, and concrete roadmap milestones, including out-of-protocol implementations and EIP 7793 for eventual L1 integration.

Here are the top highlights from the speakers.

Luis Bezzenberger (Product Manager, Brainbot / Shutter Network)

1. Threshold Encryption for Real-Time Censorship Resistance

   Luis emphasized that Shutter Network uses threshold encryption to enable unstoppable decryption, making it ideal for encrypted mempools that defend against front-running and short-term censorship—especially valuable in high-speed DeFi and L2 environments.

2. Debunks Misconceptions About MEV Elimination

   He clarified that encrypted mempools are often wrongly criticized for failing to eliminate all MEV. In reality, they are designed to prevent front-running, not back-running, and don’t claim to be a silver bullet for all MEV issues.

3. Concrete Milestones: POC and Integration with MEV-Commit

   Luis outlined two concrete milestones:

   • A proof-of-concept with Primev’s MEV-Commit, using Shutter as a sequencer to build encrypted transaction flows.

   • A long-term goal of integrating encrypted mempools with Fossil and EPBS to solve censorship resistance and “free option” issues in block production.

Marc Harvey-Hill (Ethereum Core Team, Nethermind)

1. EIP 7793 for Stronger Guarantees

   Marc introduced EIP 7793, which ensures that proposers cannot reorder transactions, eliminating the risk of front-running even when decrypted—surpassing current models that only slash misbehavior.

2. Short-Term Privacy, Not Full Confidentiality

   He clarified that encrypted mempools offer short-term privacy, useful for front-running protection and censorship resistance—but do not provide long-term data privacy, contrary to common belief.

3. Decentralization via Multiple Threshold Sets

   He addressed centralization concerns by suggesting multiple encrypted mempools with distinct threshold sets. Users can choose their preferred trust models, maintaining system-level decentralization without requiring full protocol enshrinement.

Benjamin Hunter (Co-host, VP Engineering at BTCS)

1. Advocates for “Good Enough” Solutions

   Ben highlighted Ethereum’s tendency to demand perfection for protocol features like encrypted mempools, while accepting suboptimal solutions like out-of-protocol PBS relays. He argued for a faster, iterative approach to adoption.

2. Raises Cost and Incentive Questions

   He pressed the speakers on who pays for encrypted mempools, and how validators and builders could be economically incentivized. This prompted Luis and Marc to explain fee structures, tips, and validator rewards.

3. Pushes for Global Censorship Resistance

   Ben emphasized that Ethereum must not act like “the United States of Ethereum.” He advocated for globally inclusive censorship resistance to ensure institutional and geopolitical neutrality in transaction processing.

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Listen to the full podcast 👇

MEV Space #8: Censorship Resistance, MEV Mitigation, and Implementation Timeline On Encrypted Mempools

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