Thread by @bertcmiller

Yesterday Flashbots published MEV-SGX, our proposal for using secure enclaves to provide a private mempool and a sealed bid MEV auction.

Thread on how MEV-SGX works and why it matters 👇🏻
ethresear.ch/t/mev-sgx-a-se…

Flashbots' focus is to enable a permissionless, transparent, and fair ecosystem for MEV extraction.

To date we've made progress on this by releasing two products: Flashbots Alpha and MEV-Explore.

Flashbots Alpha is composed of MEV-Geth and MEV Relay

MEV-Geth is a client that allows users to communicate granular transaction order preferences through transaction "bundles"

MEV-Relay is a gateway that Flashbots runs today, for reasons we'll discuss below

In early 2021 Flashbots launched with these design goals

While Flashbots Alpha has been and continues to be successful it offers incomplete trust guarantees. It is not permissionless or completely private.

It is not permissionless because miners need to be permissioned by MEV-Relay to receive bundles & the relay also prevents DOS attacks

It is not completely private because bundles can be seen by miners prior to inclusion on-chain

Both of these design goals are v hard to achieve

Flashbots introduced 0 gas price tx paying fees via smart contracts. These need to be simulated to tell what they pay miners

New DOS vector: a searcher can spam a miner with worthless 0 gas txs & force them to spend $ simulating

A trusted relay that filters txs stop this today

That's why permissionlessness is hard, what about privacy?

Well, miners want to produce valid & profitable blocks. They lose out on $ otherwise.

How can we give miners guarantees that the blocks they are mining are valid & profitable without them actually seeing the block?

There are a few different approaches summarized in the post. I encourage you to read the details about each! Also, this isn't exhaustive.

While these aren't being ruled out (we might build some of them!) we are presenting a proposal for the usage of secure enclaves.

How does it work? Searchers create blocks & validate them in an SGX. These are encrypted & sent to the miner w/ the block's header hash, which is all that is needed to do proof-of-work for a block

Only after finding a PoW solution can miners use their SGX to decrypt the block

To expand on the above, miners don't need entire blocks to perform proof-of-work. They only need the "truncated header hash" of a block, which doesn't leak info about txs.

Thus searchers only send miners this in a decrypted form so they can kick off PoW without seeing the block

Due to the tamperproof nature of SGX both the searcher and the miner know that their counterparty is running specific code in an environment that can't be tampered or peered into.

This is important and helps us achieve our goals.

The searcher knows they won't be frontrun because their transactions are hidden until a PoW solution is provided (complete privacy)

The miner knows blocks they receive from searchers have been checked in the SGX for validity/profit & don't need a relay (permissionlessness).

Lastly I want to note that while we focus on searchers MEV-SGX is a private mempool that by design *anyone* can run. This could provide frontrunning protection to regular users of Ethereum too.

Also: this is all possible without forking/changing Ethereum today!

There's some more details on MEV-SGX in the ETHResearch post so please read that.

ethresear.ch/t/mev-sgx-a-se…

Here's a few limitations of MEV-SGX.

So where are we now?

The early stages of development. We intend to take this proposal, implement a proof-of-concept to learn more, test assumptions, and get some benchmarks.

We're also doing research into alternatives that achieve our design goals.

Want to contribute?

There are a bunch of open questions on the ETHResearch post. You can also learn more about Flashbots in our Git repo, where we have some jobs descriptions and would love to see community contributions.

github.com/flashbots/pm

Thanks to everyone who contributed to this proposal in one way or another along the way, and to the Flashbots team for their amazing work.
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