Shutter Launches Anti-Front Running Solution on Gnosis to Fight $900M Crypto Theft

Ethereum Security

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Sead Fadilpašić

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Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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June 18, 2024

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Open-source protocol Shutter, in partnership with Gnosis, has launched an anti-front running solution using mempool encryption to fight crypto theft.

According to the press release, Shutter will be integrated into the EVM-compatible Layer-1 Gnosis Chain to protect end-user transactions from front running and sandwich attacks.

This way, it argued, the protocol will shield traders from malicious maximal extractable value (MEV) attacks that can result in significant monetary loss and unfair influence.

This integration is “one of many in the pipeline” for Shutter in its effort to combat malicious MEV attacks across the Ethereum ecosystem, it said.

Shutter will launch on July 11, the final day of the Ethereum Community Conference (EthCC).

The Massive Cost of MEV Attacks

Notably, attackers steal nearly $900 million from crypto trades annually on Ethereum through MEV tactics, the press release said.

During MEV attacks, attackers manipulate the outcome of a transaction within a blockchain to maximize their own financial gain at the victim’s expense.

buh-bye 👋🥪

Let's end malicious mev! https://t.co/1geBwTUhBd

— Sir Shieldswell 🛡️⚔️ (@SirShieldswell) June 14, 2024

A popular type is the sandwich attack, where an attacker places their transactions both before and after a victim’s transaction. This usually increased the price of the token for the victim.

Importantly, many traders stay in the dark until they notice significant losses.

Even once they become aware, the announcement said, “victims have to take extra steps to protect themselves, often relying on centralized systems that can still censor and extract value.”

Furthermore, these attacks reduce the overall market efficiency and trust in the system.

‘Deep Integration’

Gnosis Chain’s integration of Shutter fights malicious MEV through preventive measures, the press release stated. This is beneficial for both the Shutter community and the industry in general.

Shutter emphasizes that it integrates its encryption protocol directly into blockchain networks.

This is a “deep integration,” it explains, which prevents manipulators from exploiting transactions.

“Block producers must commit to the inclusion and order of transactions while they are still encrypted, making it almost impossible to front run or censor,” the team claims.

Subsequently, this move ensures protection for traders from monetary losses “without needing additional measures.”

Very excited to be sharing @ShutterNetwork at the Gnosis Berlin Meetup on Thursday, June 20!

You can still RSVP. See the event link ⬇️ https://t.co/VYgYHCx9O4

— Loring Harkness 🛡️⚔️ (@LoringHarkness) June 18, 2024

Additionally, the encrypted mempool also mitigates real-time censorship, ensuring transactions remain private until included in a block.

Therefore, malicious actors are unable to exclude transactions selectively.

This reinforces “the core principles of public blockchains—openness, neutrality, and accessibility.”

According to the team, “by increasing information symmetry through Shutter’s encryption approach, the playing field is leveled.”

“At the same time, the integrity of public blockchains is preserved, providing greater confidence for retail and large institutional investors typically deterred by rampant front running in decentralized finance (DeFi) to enter the space, attracting a broader range of participants in the long run,” it concluded.