Are There Alternatives to Commit-Reveal Schemes for Preventing MEV?
Yes, several alternatives exist. One approach is using encrypted mempools or trusted execution environments (TEEs) , where transactions are encrypted until they are executed, hiding them from miners.
Another is batch auctions , where orders are collected over a period and executed at a single, uniform clearing price, eliminating the advantage of ordering. Furthermore, some protocols utilize private order flow to dedicated block builders who promise not to front-run, or employ Fair Ordering mechanisms at the protocol level.
Glossar
Fair Ordering Mechanisms
Mechanism ⎊ Fair ordering mechanisms, within cryptocurrency derivatives and options trading, represent a suite of protocols designed to ensure equitable trade execution and price discovery, particularly crucial in decentralized environments.
Dedicated Block Builders
Builder ⎊ A dedicated block builder is a specialized entity in a Proof-of-Stake blockchain ecosystem, primarily responsible for aggregating and ordering transactions into a block payload before passing it to a proposer.
Trusted Execution Environments
Attestation ⎊ Trusted Execution Environments (TEEs) provide a hardware-rooted layer of security, crucial for validating the integrity of computations within cryptocurrency, options trading, and derivatives markets.
Batch Auctions
Mechanism ⎊ Batch auctions, within cryptocurrency and derivatives markets, represent a simultaneous order submission and execution process, differing fundamentally from traditional continuous limit order books.
Encrypted Mempools
Anonymity ⎊ Encrypted mempools represent a significant evolution in transaction privacy within cryptocurrency networks, moving beyond pseudonymous addresses to obfuscate the linkages between sender and receiver.
Private Order Flow
Imprint ⎊ Private Order Flow, within cryptocurrency and derivatives markets, represents non-displayed liquidity originating from institutional traders or high-frequency firms; this order information isn't publicly visible on the order book, offering insight into aggregated intent beyond retail participation.