Date of Submission

7-11-2025

Date of Award

7-16-2025

Institute Name (Publisher)

Indian Statistical Institute

Document Type

Master's Dissertation

Degree Name

Master of Technology

Subject Name

Cryptology

Department

Cryptology and Security Research Unit (CSRU-Kolkata)

Supervisor

Preneel, Ir. Bart

Co-Supervisor (if any)

Nandi, Mridul

Abstract (Summary of the Work)

With the rapid growth of Decentralized Finance (DeFi), the challenge of Maximum Extractable Value (MEV) has become increasingly significant-particularly on Ethereum. MEV allows malicious actors to manipulate transaction order within blocks, enabling exploitative strategies such as frontrunning and sandwich attacks. In response, recent research has proposed encrypted mempools, which conceal trans- action content until after ordering is finalized, thereby reducing the exploitable surface for MEV. This thesis investigates encrypted mempool, specifically the Shutter protocol, a threshold encryption-based approach designed to mitigate MEV by hiding transac- tion contents during the mempool phase. We analyze its core architecture, under- lying cryptographic mechanisms, and proposed extensions, including its integration into Ethereum’s Proposer-Builder Separation (PBS) framework. Through this study, we identify several vulnerabilities in both the base Shut- ter protocol and its proposed Ethereum integration. We demonstrate how certain behaviors of proposers, builders, and smart contracts can be exploited to launch front-running attacks on encrypted transactions. As a proof of concept, we have also implemented this attack on a local blockchain environment to showcase its feasibility in practice. In addition, we propose mitigation strategies to address these issues and highlight open problems that need further investigations.

Control Number

CrS2313

DOI

https://dspace.isical.ac.in/items/2f109623-9f36-4327-b8f4-61f2bebd7ca8

DSpace Identifier

http://hdl.handle.net/10263/7625

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