What Is a Commit-Reveal Scheme and How Does It Deter Malicious Transaction Ordering?
A commit-reveal scheme is a two-step cryptographic protocol. First, a user "commits" to a transaction by submitting a hashed version of the details, which is public but unreadable.
Second, the user "reveals" the full transaction details after a specific time or condition is met. This prevents front-runners from gaining prior knowledge of the trade specifics, as they cannot exploit the commitment hash.
Glossar
Commit-Reveal
Mechanism ⎊ Commit-Reveal protocols, within decentralized finance, represent a staged disclosure of trading intentions, initially committing to a transaction and subsequently revealing the specifics.
Malicious Transaction
InvalidOperation ⎊ A Malicious Transaction is a submitted transaction intended to exploit a flaw in the smart contract logic or network consensus to illegally transfer assets, force an erroneous state change, or trigger an unintended contract function, such as an improper option exercise.