Shutterizing Gnosis Chain: Revolutionizing Transaction Security with Shielded Trading and Validator Empowerment

Shielded Trading on Gnosis Chain, also referred to as the Shutterized Gnosis Chain, was introduced in July to enhance transaction security. This milestone implementation integrates threshold encryption to protect against transaction manipulation and malicious MEV (e.g., sandwich attacks, front-running) while providing censorship resistance. Recently, it achieved a major breakthrough with its inclusion in Nethermind’s main release, making it accessible to all Nethermind validators.

Overview of Shielded Trading

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Shielded Trading leverages an encrypted mempool on Gnosis Chain, acting as a secondary mempool for secure transaction processing. Users can access this feature by adding an encrypting RPC endpoint to their wallet (e.g., MetaMask), enabling protection for transactions, particularly trades. This system shields users from exploits like front-running and enhances transaction fairness without requiring changes to Gnosis Chain’s core protocol.

Key Milestones and Validator Roles

The recent Nethermind release allows validators to permissionlessly participate in Shutterized Gnosis Chain. Currently, 2.7% of Gnosis validators run this modified client, with plans for broader adoption. Validators play a critical role in processing encrypted transactions and ensuring network stability. While incentives for running the Shutter protocol are still under discussion, future rewards are anticipated through transaction tips and protocol usage growth.

Credible Neutrality and Expansion to Other Chains

Shielded Trading aligns with Gnosis Chain’s focus on credible neutrality and client diversity, promoting fairness and decentralization. Though currently an out-of-protocol solution, its potential extends beyond Gnosis Chain, with discussions exploring deployment on Ethereum L1 and other chains. As encrypted mempool adoption grows, further research and user feedback will refine the system and improve its trustless architecture.

User Adoption and Scalability Challenges

While the technical infrastructure supports scalability, enhancing the user experience remains a priority. Current reliance on encrypting RPC endpoints introduces trust assumptions, and wallet providers play a pivotal role in simplifying access. Feedback from users and validators is crucial to addressing these challenges and fostering adoption.

Shielded Trading marks a significant step towards secure and fair blockchain ecosystems. With validator and user participation, the Shutter Network sets a strong foundation for broader adoption and serves as a pioneering example for encrypted mempools across chains.