diff --git a/approaches/approach-private-broadcasting.md b/approaches/approach-private-broadcasting.md new file mode 100644 index 0000000..581c3c2 --- /dev/null +++ b/approaches/approach-private-broadcasting.md @@ -0,0 +1,80 @@ +# Approach: Private Transaction Broadcasting + +**High-level goal:** Prevent information leakage during transaction broadcasting that enables MEV extraction, front-running, and competitive intelligence gathering. + +## Overview + +### Problem Interaction + +Broadcasting transactions reveals multiple layers of information: + +1. **MEV Extraction**: Transaction content visible to searchers enables front-running and sandwich attacks +2. **Intent Signaling**: Even encrypted transactions can reveal patterns, timing, and participant behavior +3. **Competitive Intelligence**: Transaction metadata exposes trading strategies and institutional activity + +These problems interact because traditional broadcasting requires public visibility for validation, while institutional privacy needs conflict with mempool transparency. + +### Key Constraints + +- Must maintain transaction validity and ordering guarantees +- Integration with existing institutional workflows and custody systems +- Regulatory compliance for audit trails and selective disclosure + +### TLDR for Different Personas + +- **Business:** Execute transactions without revealing intent or enabling front-running +- **Technical:** Use private mempools, encrypted broadcasting, or integrate with OTC execution to hide transaction content +- **Legal:** Maintain audit capabilities while protecting proprietary trading information + +## Architecture and Design Choices + +### Primary Approaches + +**MEV Protection (OTC Execution):** + +- [Renegade](../vendors/renegade.md) for private order matching and MEV prevention +- [Flashbots](../vendors/flashbots.md) private mempools +- Direct settlement bypassing public broadcasting + +**Intent Signaling Protection:** + +- [Shutter Network](../patterns/pattern-pretrade-privacy-shutter-suave.md) for encrypted mempools +- [SUAVE](../patterns/pattern-pretrade-privacy-shutter-suave.md) for private intent expression +- Encrypted mempool solutions with threshold decryption + +**Private Rollups:** + +- Hidden state with encrypted mempool +- 2 categories: + - Shared [Private Rollups](../patterns/pattern-privacy-l2s.md) (Aztec, Fhenix) + - Enterprise Rollups: [zkSync Prividium](../vendors/zksync-prividium.md), [EY Nightfall](../vendors/ey-nightfall.md) + +### Recommended Architecture + +**Tiered Privacy Model:** + +- **Large institutional trades:** OTC execution (Renegade, Flashbots) to prevent MEV extraction +- **Regular operations:** Encrypted mempools (Shutter, SUAVE) for intent privacy +- **Comprehensive privacy:** Private rollups (Aztec, Prividium) for complete transaction hiding + +## More Details + +### Trade-offs + +**OTC vs Encrypted Broadcasting vs Private Rollups:** + +- **OTC:** Better privacy, higher complexity, custody integration challenges, best to avoid MEV extraction +- **Encrypted:** Broader compatibility, timing analysis still possible, best for hiding intent signals +- **Private Rollups:** Complete privacy but requires L2 migration, suitable for comprehensive privacy needs + +### Open Questions + +1. **Regulatory Acceptance:** How do regulators view private broadcasting vs traditional transparency? +2. **Market Impact:** Effects on price discovery and market structure? +3. **Cross-Chain Coordination:** How to maintain privacy when broadcasting across multiple networks? +4. **Timing Analysis:** Can sophisticated adversaries still extract information from transaction timing patterns? + +## Links and Notes + +- **Patterns:** [Pre-trade Privacy](../patterns/pattern-pretrade-privacy-shutter-suave.md), [Privacy L2s](../patterns/pattern-privacy-l2s.md) +- **Vendors:** [Renegade](../vendors/renegade.md), [Flashbots](../vendors/flashbots.md), [Shutter](../vendors/shutter.md) diff --git a/vendors/flashbots.md b/vendors/flashbots.md new file mode 100644 index 0000000..5848bf2 --- /dev/null +++ b/vendors/flashbots.md @@ -0,0 +1,77 @@ +--- +title: "Vendor: Flashbots" +status: draft +maturity: production +--- + +# Flashbots – MEV Infrastructure & SUAVE + +**Category:** MEV Infrastructure / Privacy Infrastructure +**Maturity:** Production (Flashbots Auction), Development (SUAVE) +**Focus:** MEV mitigation, private mempools, and decentralized block building + +## Overview + +Flashbots develops **MEV infrastructure** including private mempools, block building, and **SUAVE** (Single Unifying Auction for Value Expression) - a decentralized platform for private intent expression and execution. + +## Key Use Cases / Patterns + +- [Pre-trade Privacy](../patterns/pattern-pretrade-privacy-shutter-suave.md) - Private intent expression via SUAVE +- [Private Broadcasting](../approaches/approach-private-broadcasting.md) - MEV protection through private mempools + +## Technical Approach + +**Flashbots Auction:** + +- **Private Mempools:** Transactions submitted directly to builders, bypassing public mempool +- **MEV-Share:** Users capture portion of MEV from their transactions +- **Block Building:** Competitive block construction with MEV extraction + +**SUAVE (Under Development):** + +- **Universal Intent Pool:** Cross-domain intent expression and matching +- **Programmable Privacy:** Selective revelation of intent information +- **Decentralized Execution:** Multiple execution environments for intent fulfillment + +## What It Provides + +- Private transaction submission bypassing public mempool +- MEV protection through direct builder relationships +- Revenue sharing mechanisms (MEV-Share) +- Cross-chain intent expression (SUAVE) +- Decentralized block building infrastructure + +## What It Doesn't Cover + +- Complete MEV elimination (redistributes rather than eliminates) +- Privacy after execution (transactions still visible on-chain) +- Regulatory compliance frameworks +- Long-term privacy guarantees (relies on builder trust) + +## Integration Notes + +- **Networks:** Ethereum mainnet (Flashbots), Multi-chain (SUAVE) +- **Developer Tools:** MEV-Share SDK, Flashbots Auction APIs +- **Builder Network:** Requires integration with participating builders +- **Intent Standards:** SUAVE developing cross-chain intent standards + +## Strengths + +- Established MEV mitigation with significant adoption +- Strong relationship with Ethereum ecosystem +- Active development of next-generation infrastructure (SUAVE) +- Revenue sharing mechanisms align user incentives + +## Limitations + +- Centralization concerns with builder relationships +- SUAVE still in development phase +- Limited privacy guarantees (trust-based model) +- Regulatory uncertainty around MEV redistribution + +## Links + +- [Flashbots](https://flashbots.net/) +- [MEV-Share](https://docs.flashbots.net/flashbots-mev-share/overview) +- [SUAVE](https://writings.flashbots.net/the-future-of-mev-is-suave) +- [Documentation](https://docs.flashbots.net/) diff --git a/vendors/shutter.md b/vendors/shutter.md new file mode 100644 index 0000000..71630d3 --- /dev/null +++ b/vendors/shutter.md @@ -0,0 +1,69 @@ +--- +title: "Vendor: Shutter" +status: draft +maturity: production +--- + +# Shutter Network – Encrypted Mempool & MEV Protection + +**Category:** Privacy Infrastructure +**Maturity:** Pilot/Production (Gnosis Chain) +**Focus:** Pre-trade privacy through encrypted mempools and threshold decryption + +## Overview + +Shutter Network provides **encrypted mempool** infrastructure that prevents MEV extraction and front-running by encrypting transactions until they are included in blocks, using **threshold cryptography** for decryption. + +## Key Use Cases / Patterns + +- [Pre-trade Privacy](../patterns/pattern-pretrade-privacy-shutter-suave.md) - Encrypted mempool with threshold decryption +- [Private Broadcasting](../approaches/approach-private-broadcasting.md) - Intent signaling protection + +## Technical Approach + +Shutter uses **threshold encryption** where: + +- **Transaction Encryption:** Users encrypt transactions with a shared public key +- **Distributed Decryption:** Network of validators collectively decrypt transactions after block inclusion +- **MEV Prevention:** Searchers cannot see transaction content during the vulnerable mempool phase +- **Ordering Protection:** Prevents front-running while maintaining transaction validity + +## What It Provides + +- Encrypted mempool preventing MEV extraction during broadcasting +- Threshold decryption ensuring no single point of failure +- Integration with existing Ethereum infrastructure +- Censorship resistance through distributed key management + +## What It Doesn't Cover + +- Post-execution privacy (transactions visible after inclusion) +- Cross-chain MEV protection +- Complex intent expression (focuses on transaction-level protection) + +## Integration Notes + +- **Networks:** Live on Gnosis Chain, Ethereum integration planned +- **Compatibility:** Works with standard Ethereum transactions +- **Validator Requirements:** Requires network of threshold key holders +- **Developer Experience:** Minimal changes to existing dApp integration + +## Strengths + +- Proven solution with mainnet deployment +- Strong cryptographic foundations (threshold encryption) +- Minimal impact on existing Ethereum workflows +- Effective MEV prevention during critical mempool phase + +## Limitations + +- Limited to supported networks (Gnosis Chain currently) +- Adds latency due to threshold decryption process +- Requires coordination among threshold key holders +- No protection against MEV after transaction execution + +## Links + +- [Shutter Network](https://shutter.network/) +- [Documentation](https://docs.shutter.network/) +- [GitHub](https://github.com/shutter-network)