SKALE Labs Reveals New Protocol to Combat $1.8 Billion MEV Problem

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Sead Fadilpašić

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Sead Fadilpašić

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May 7, 2025

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SKALE Labs, the team behind Layer-1 blockchain network SKALE, has launched its BITE Protocol, the “industry’s first” consensus-level solution that works to eliminate Maximal/Miner Extractable Value (MEV).

The SKALE team says that BITE stands for ‘Blockchain Integrated Threshold Encryption’. It prevents anybody from accessing transaction contents before a block is finalized. The protocol encrypts transactions before they enter the mempool and decrypts them after block finalization.

According to the press release shared with Cryptonews, the new protocol benefits decentralized exchanges, non-fungible token (NFT) marketplaces, lending protocols, on-chain games, prediction markets, and real-world asset (RWA) tokenization platforms.

Here, “transaction fairness and privacy are essential for bringing traditional assets onto blockchain networks,” the team says.

Meanwhile, MEV is the maximum amount of value miners, validators, and sequencers can extract from transactions waiting for confirmations. They do this by rearranging and reordering these transactions. MEV is a well-known issue in the blockchain world.

The announcement notes that MEV extraction has been responsible for over $1.8 billion since 2020. BITE Protocol works below the surface level, with its cryptographic protocol integrating threshold encryption directly into the consensus layer.

Therefore, the team says, it creates a level playing field for all blockchain participants through privacy and fairness. Also, it brings blockchain transactions “in line with that of traditional finance transactions, eliminating front-running tactics that have plagued the industry as more traditional institutions enter the space.”

That said, per the announcement, the BITE protocol transforms the blockchain space “from one where privileged actors can exploit ordinary users to one where everyone operates with the same information at the same time, bringing blockchain closer to the fairness expected in traditional financial markets while maintaining its decentralized nature.”

First Jump Over 100M Monthly Transactions

The SKALE team has recently published its performance data for the month of April. It described the month as “milestone-filled.”

Notably, the network has surpassed 100 million transactions in a one-month period for the first time. This record, the team argues, “highlights SKALE’s ability to support high-throughput applications at zero gas cost.”

Furthermore, April saw the new Block Explorer 2.2.0 go live on all SKALE Chains. The upgrade boosted UI, token and contract visibility, and chain navigation.

Next, three new titles joined the SKALE GameFi ecosystem in April, with zero gas fees. These are Cropbytes, For Loot and Glory, and GoArt Worlds.

As for the first quarter, the chain’s onchain metrics increased, “despite uncertain market conditions and a drop in market participants.” SKALE generated nearly 250 million transactions and 9.7 million unique active wallets, it reported. This is a 46% and 33% quarter-over-quarter increase, respectively.

Commenting on the latest launch, SKALE Labs CEO and co-founder Jack O’Holleran said that BITE Protocol “represents a watershed moment for blockchain technology.” It could make current L1 blockchain technology obsolete, he argued.

“BITE Protocol encrypts consensus and completely removes MEV from blockchain, finally putting an end to front-running, sandwich attacks, time bandit attacks, and other methods of taking value from end users. Rather than applying band-aid solutions to the MEV problem, BITE addresses it at its root through cryptographic guarantees in the consensus layer itself,” O’Holleran said.

Meanwhile, at the time of writing, the SKL token trades at $0.0217. It’s up 5% in a day and 15% in a month. It decreased by 10% in a week and by 70% in a year.