What Is a Mempool? Everything You Need to Know
A mempool, short for memory pool, is where pending blockchain transactions wait for validation by network nodes. In a blockchain, transactions are first sent to the mempool before being included in a block — it’s like a temporary queue. Higher-fee transactions are prioritized for faster inclusion. If the mempool is full, low-fee transactions might be delayed or dropped.
Key Takeaways
- Mempools are temporary storage for new transactions that are yet to be confirmed on the blockchain.
- Each blockchain consensus mechanism can influence how mempools work and prioritize transactions.
- Low gas fees can cause transaction confirmations to be late, as nodes prioritize transactions with higher fees.
- Mempools aren’t just about efficiency — they’re areas where security is key, as they can be vulnerable to attacks like front-running, double-spending, and spam attacks.
How Does the Mempool Work?
When you make a blockchain transaction, it isn’t confirmed right away. It first goes through several steps, including a waiting period in the mempool. Here’s how memory pools work:
- Initiation: You initiate a transaction from your crypto wallet or a decentralized application (dApp).
- Forwarding: Once you sign the transaction, the wallet or dApp forwards the transaction to a network node to be recorded on the blockchain.
- Verification: This node checks the transaction’s validity and stores it in its mempool.
- Broadcast: The node broadcasts the transaction to other nodes, which validate and add it to their mempools, and further propagate it across the network.
- Inclusion in a Block: Nodes prioritize higher gas fees when picking transactions from the mempool, including them in a block, and adding them to the blockchain.
- Finalization: Once included in a block, the transaction is confirmed and removed from the mempool.
Different nodes might have slightly different transactions in their mempools because they might receive transactions at different times or have different storage capacities. This can result in variations in the mempool size and content across the network.
What Is a Mempool Used For and Why Is It Important?
Mempools help prioritize transactions based on fees, ensuring that those willing to pay higher fees are processed quicker. This prioritization is essential for maintaining the network’s efficiency, especially when dealing with large volumes of transactions. The mempool allows the blockchain to handle high traffic without overwhelming the system.
Moreover, the mempool’s role extends beyond blockchain nodes. For example, you can access the mempool information using a mempool explorer to adjust your transaction fees to get processed faster.
You can also monitor the mempool to gauge transaction flow, network stability, and potential security issues. For instance, high congestion may signal network stress, while sudden drops may indicate attacks or outages.
However, the mempool is not without its vulnerabilities. It is often the target of various attacks, such as front-running, spam attacks, and Maximal Extractable Value (MEV) exploits, which we’ll delve into later.
Lastly, mempools can help improve blockchain scalability. Analysts and developers can monitor transaction patterns and network load to optimize blockchain performance. By understanding how these transactions move through the mempool, they can make informed decisions about scaling solutions and network improvements.
Mempool Fees and Transaction Priority
We have established by now that not all transitions are treated equally in a blockchain. This is because of fees. To process transactions quickly, you often attach a fee, typically called a gas fee.
Since blocks have limited space, only a certain number of transactions can be included in each block. When the number of transactions exceeds the available block space, the network depends on a fee-per-byte mechanism to decide which transaction to prioritize.
Keeping the market dynamic ensures the efficient operation of the blockchain. For instance, Ethereum gas fees play a big role in determining which transactions are prioritized during periods of high demand, allowing the network to remain functional. At the same time, it adds a layer of security, making it more expensive for spammers to slow the network.
This prioritization affects the overall efficiency of the blockchain, as it allows the network to manage a large number of transactions without being overwhelmed.
Blockchain Mempool Examples
While all mempools have the same goal, their operations can differ depending on the consensus mechanism they use. For example, in proof-of-work (PoW) blockchains, such as Bitcoin, mempools are managed by nodes that prioritize transactions based on attached fees.
Meanwhile, in proof-of-stake (PoS) networks, nodes often focus on both fees and network efficiency. There’s also the emerging proof-of-history (PoH) mechanism, where mempool operations are structured around time-stamping and sequencing transactions.
Let’s look at a few examples to understand how mempools work on different blockchain networks:
Bitcoin Mempool (Proof-of-Work)
Bitcoin operates on a proof-of-work consensus mechanism, similar to other proof-of-work coins like Litecoin and Dogecoin. They rely on specialized nodes, known as miners, to validate transactions and secure the network.
Miners compete to solve complex mathematical puzzles; the first to solve it earns the right to add a new block of transactions to the blockchain. Since blocks have limited space, miners are incentivized to maximize their earnings by including transactions with higher fees.
Below is a screenshot of a Bitcoin mempool explorer, which provides a visual representation of the current state of unconfirmed transactions.
Ethereum Mempool (Proof-of-Stake)
Ethereum nodes have a similar process, but they operate on a proof-of-stake consensus mechanism. Instead of miners, Ethereum relies on nodes known as validators to maintain the network.
These validators are chosen to create new blocks based on the amount of ETH they stake as collateral, ensuring that those with a vested interest in the network’s security have the most influence.
In Ethereum’s PoS system, validators select transactions from the mempool based on gas fees and network efficiency. Unlike PoW, where the competition revolves around solving complex puzzles, Ethereum’s PoS validators focus more on maintaining a balanced and efficient network.
This mechanism boosts energy efficiency and bolsters security by making attacks more costly and less likely, benefiting the broader ecosystem of proof-of-stake coins.
Below is a screenshot of an Ethereum block explorer, providing a visual snapshot of unconfirmed transactions.
Solana Mempool (Proof-of-History)
As for Solana, it operates on a unique consensus mechanism known as proof-of-history. Unlike Bitcoin and Ethereum, Solana doesn’t have a native mempool. Instead, Solana’s nodes, known as validators, leverage the PoH system to timestamp transactions as they arrive.
This creates a historical record that orders transactions while eliminating the need for a separate mempool. Transactions are processed almost immediately, keeping the network efficient and quick while maintaining high throughput. This makes Solana one of the cryptos with the lowest fees.
The PoH system also enhances security by reducing the potential for network congestion or malicious attacks, as there’s no centralized pool of unconfirmed transactions to target.
Below is a screenshot of a Solana block explorer showcasing the network’s real-time transaction processing.
What Is a Mempool Explorer?
A mempool explorer is a tool for visualizing and tracking unconfirmed transactions within a blockchain network’s mempool. These explorers provide real-time insights into how transactions are prioritized, network congestion, and transaction fees.
However, there are some risks associated with mempool explorers. The transparency they offer can be exploited by scammers and malicious actors who may try to launch spam attacks or front-run transactions.
By using a mempool explorer, you can monitor the flow of transactions, see how long it might take for your transaction to be included in a block, and even adjust your transaction fees to speed up the process.
Why Is My Transaction Still in the Mempool?
Sometimes, you might notice that your transactions are taking longer than expected to get validated. Let’s explore the factors that can cause these delays.
The Network Is Congested
The most common reason for transaction delays is network congestion. This happens when many transactions are broadcasted to the network simultaneously, causing the mempool to fill up and slowing down the transaction process.
This congestion can occur for various reasons, such as increased user activity or specific events like the minting of Bitcoin ordinals, leading to a spike in transactions.
Your Gas Fee Is Too Low
If the gas fee is too low, you might notice that your transaction is taking longer than usual to validate. For example, on Ethereum, transactions with lower gas fees are pushed to the back of the queue since the blockchain is incentivized by gas fees.
The Hash Rate Dropped
The hash rate is the computational power used to mine and process transactions on a PoW blockchain. A drop in the network’s hash rate can cause transaction processing delays as crypto mining efficiency drops.
What Can I Do If My Transaction Gets Stuck in the Mempool?
If your transaction is stuck in the mempool, you have several options. You can cancel the transaction altogether, which may have potential downsides like losing the attached fee. Or, you can wait for the network to process your transaction, which might take longer than expected.
Additionally, there are specific methods that you can try. Let’s look into them.
Replace-by-Fee (RBF)
This method allows you to increase the gas fee to speed up the confirmation. To use RBF, your original transaction must have been flagged as RBF-enabled when it was first sent. If not, you can resend the same transaction with a higher fee, and miners will replace the original with the updated version.
Child-Pays-for-Parent (CPFP)
As for CPFP, you can create a new transaction (the “child”) that spends the unconfirmed funds from the previous, stuck translation (the “parent”). When you attach a high fee to the child transaction, you motivate the miners to prioritize the original and new transactions together.
Accelerator Services
Lastly, you can try an accelerator service. These third-party platforms help speed up stuck transactions by working directly with miners to prioritize your transactions. These services are useful when network congestion is high and traditional methods like RBF or CPFP aren’t available or effective.
Examples of popular accelerator services include ViaBTC and BTC.com, which offer free and paid options to speed up your transaction.
Mempools and Maximal Extractable Value (MEV)
The Maximal Extractable Value (or MEV) is the maximum profit that any participant, including nodes and malicious actors, can extract from transaction manipulation in a block. The primary goal is to maximize profits by reordering and including or excluding transactions in a block before it’s finalized.
The most common attacks carried out by malicious actors include front-running, back-running, and sandwich attacks. Conversely, nodes typically increase the MEV through legal methods, such as monitoring the mempool and strategically selecting the most profitable transactions.
Mempools play an important role in enabling MEV. Since they act as the staging area for all unconfirmed transactions, nodes can analyze and manipulate the order of transactions to their advantage.
They often use specialized MEV bots designed to execute these complex operations with precision. While technically legal, this practice raises ethical concerns, as it can undermine fairness and trust in the network.
Understanding the interaction between mempools and MEV is very important for developers and analysts aiming to reduce these issues and ensure a more impartial blockchain environment.
Mempool Security Risks and Vulnerabilities
While mempools are important in the blockchain industry, they come with risks and vulnerabilities depending on their consensus mechanism. PoW, PoS, and PoH each face different threats due to their differing operational principles and transaction handling processes.
Understanding these risks is crucial for developing robust blockchain systems and mitigating potential threats. Here are the most common types of attacks and vulnerabilities mempools face:
Front-Running
Front-running is an attack where malicious actors exploit the transaction ordering process to profit at the expense of others. This involves observing pending transactions in the mempool and placing their own transactions ahead to benefit from anticipated price changes or market movements triggered by the original transactions.
This attack can significantly affect PoW and PoS networks, as both rely on transaction prioritization based on fees and timing.
In August 2021, a front-running attack on the protocol Polynetwork made headlines when an attacker known as “Mr. White Hat” exploited a vulnerability in the contract’s upgrade function. By spotting a pending upgrade transaction in the mempool and submitting a higher-fee transaction, the attacker gained control of over $600 million worth of cryptocurrency assets across multiple blockchains.
Double-Spending
Double-spending happens when an attacker tries to spend the same cryptocurrency more than once. This attack can undermine the integrity of the blockchain by creating conflicting transactions.
PoW networks are particularly vulnerable to double-spending, as they depend on miners to validate and include transactions in blocks. If an attacker can outpace the network’s mining power, they might successfully double-spend.
A notable example of this happened with Bitcoin Gold in 2018. In a 51% attack, the attacker gained control over more than half of the network’s mining power, allowing them to rewrite the blockchain’s history and double-spend a significant amount of Bitcoin Gold (BTG). The attacker reportedly managed to double-spend over $18 million worth of BTG.
This incident highlighted the vulnerability of smaller PoW networks to such attacks, raising concerns about the security of Bitcoin and other cryptocurrencies that rely on similar mechanisms.
Spam Attacks
Spam attacks involve flooding the network with many low-value transactions, overwhelming the mempool, and disrupting normal transaction processing. This risk is particularly relevant for PoW and PoS networks, where transaction fees and processing power are exploited.
In 2017, Ethereum’s test network, Ropsten, faced a spam attack. The attacker flooded the network with an overwhelming number of transactions, causing severe congestion and making it tough to process legitimate transactions. This wasn’t just a minor inconvenience — it was a wake-up call.
The attack exposed vulnerabilities in Ethereum’s ability to handle a high volume of transactions, highlighting the need for better scalability and security measures.
Transaction Reordering
Transaction reordering involves manipulating the order of transactions to benefit certain actors or disrupt normal operations. This can impact PoW and PoS networks where transaction prioritization and block inclusion are key. By reorganizing transactions, attackers can potentially gain financial advantages or cause disruptions.
One of the most prominent examples of transaction reordering occurred in the DeFi ecosystem in 2020, known as the “Harvest Finance exploit.” Harvest Finance, a decentralized finance protocol, was targeted by an attacker who manipulated the order of transactions to drain over $24 million from the platform.
The attacker exploited the way Harvest Finance’s smart contracts executed transactions. By quickly placing and reversing large transactions, the attacker artificially manipulated the price of assets within the protocol, allowing them to profit by reordering the transactions.
Sandwich Attacks
Sandwich attacks happen in steps. It starts when an attacker identifies a pending transaction in the blockchain’s mempool, usually one that involves a significant trade or price-sensitive action on a DeFi platform. The attacker then quickly submits a transaction to be processed just before the target transaction, manipulating the market in their favor. This transaction causes a price movement, which affects the original target transaction that follows.
As the market reacts to the target transaction, the attacker immediately submits a second transaction that capitalizes on the new price, securing a profit. This way, the attacker “sandwiches” the original transaction between two of their own, exploiting the order of transactions for financial gain. This attack is particularly effective in DeFi applications and PoS networks, where the order and timing of transactions are critical.
In April 2023, a sandwich attack occurred on the Uniswap exchange, leading to the loss of $25 million worth of crypto assets. The attacker targeted a large transaction by observing the pending trade on the public blockchain.
They executed the attack by placing a transaction just before the victim’s trade, purchasing the same token to inflate its price artificially. Once the victim’s transaction went through at a higher price, the attacker quickly sold the tokens at a profit by executing another transaction immediately after.
What Are Private Blockchain Mempools?
Unlike public mempools, which are accessible to all network participants, private mempools are restricted to a select group of nodes. This exclusivity provides enhanced security and privacy, making private mempools particularly valuable when transaction confidentiality is critical.
What sets these private mempools apart is their key features which include limited access, enhanced control over transaction processing, and the ability to enforce validation rules that are more strict. They also provide more security and privacy, preventing external parties from observing or tampering with pending transactions.
Private mempools can be used in environments where security is a priority. For example in organizations that require greater control over their blockchain operations. They can also use them to manage internal transactions, ensuring that only authorized personnel can approve and execute transactions.
However, private blockchain mempools are not without risks and controversies. One concern is the potential for centralization due to the restricted access. This centralization might undermine the decentralized nature of blockchain technology and introduce vulnerabilities if those trusted nodes are compromised.
Overall, private blockchain mempools offer significant advantages in terms of security and privacy, but they also raise important questions about centralization and transparency that need to be carefully managed.
Final Thoughts on Blockchain Mempools
Mempools are critical to the success of validating transactions. Their role in prioritizing transactions based on fees and managing network congestion highlights their importance in maintaining efficiency and security. However, they do come with risks, such as front-running, double-spending, and spam attacks.
As the blockchain industry grows, everyone is working hard to address these challenges and improve mempool functionality. To keep learning about blockchain, read our guide on what a smart contract is.
FAQs
Can a Bitcoin transaction be stuck in a mempool?
How to check an unconfirmed Bitcoin transaction?
How do nodes interact with the mempool?
What is a mempool API?
References
- Mempool Space: Mempool – Bitcoin Explorer
- Solana: Explorer | Solana
- XRP: Ledger Explorer
- Yahoo! Finance: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions
- Coindesk: Ethereum Spam Attacks Are Back
- Bitcoin News: Defi Protocol Harvest Finance Hacked for $24 Million, Attacker Returns $2.5 Million
- The Cryptonomist: News for the Uniswap crypto exchange: the $8 million attack and the transition to Open Source
- The Guardian: ‘White hat’ hacker behind $610m crypto heist returns most of money
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