Mitigating MEV with FHE - Blind Arbitrage on Ethereum | Flashbots Writings
This article examines the application of Fully Homomorphic Encryption (FHE) in the Maximal Extractable Value (MEV) space. Our approach allows searchers to blindly backrun user transactions using FHE. This prototype demonstrates how a searcher can compute the future price of a UniswapV2 pool over a user transaction, keeping it encrypted throughout the process. Although this method is not currently practical for deployment, it serves as a foundation for future improvement and expansion, which we discuss in the conclusion. Thanks to Sarah Allen and Leonardo Arias their feedback on the initial version. 🙏 This work was recently presented at ETHCC. In this article, we draw our attention to the specific facet of arbitrage within the MEV domain. Such arbitrage opportunities arise when the price of an asset on the blockchain differs from the price at which the same asset trades on other markets. We present an approach that enables backrunning, a process where a transaction is crafted to be exe
This article examines the application of Fully Homomorphic Encryption (FHE) in the Maximal Extractable Value (MEV) space. Our approach allows searchers to blindly backrun user transactions using FHE. This prototype demonstrates how a searcher can compute the future price of a UniswapV2 pool over a user transaction, keeping it encrypted throughout the process. Although this method is not currently practical for deployment, it serves as a foundation for future improvement and expansion, which we discuss in the conclusion. Thanks to Sarah Allen and Leonardo Arias their feedback on the initial ver
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