We're excited to announce that the Shutterized Gnosis Chain is live, featuring an encrypted mempool by the Shutter Network.

The development of the Shutterized Gnosis Chain is a landmark achievement and major innovation for blockchain technology. Martin Köppelmann, Gnosis co-founder, played a crucial role in developing the Shutterized Beacon Chain concept that laid the foundation for the advanced Shutter technology that’s launching today.

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Shutter's technology enhances the security of Ethereum Layer 2 solutions and is directly integrated into Gnosis Chain. This integration represents a significant advancement, making Gnosis Chain one of the most advanced EVM-compatible networks.

What Problem Is Shutterized Gnosis Chain Solving?

In the fast-changing world of blockchain technology, Gnosis Chain is at the forefront of addressing significant challenges for users and developers. By integrating Shutter's threshold encryption technology into Gnosis Chain, we demonstrate our dedication to improving security, privacy, and fairness in blockchain transactions. The Shutterized Gnosis Chain tackles significant issues focused on base-layer neutrality, countering the risk of malicious Maximal Extractable Value (MEV), and maintaining censorship resistance.

Base-layer Neutrality - Ensuring Fairness and Equality

Base-layer neutrality is a fundamental principle for any robust and decentralized blockchain. It ensures that the core layer of the blockchain processes all transactions equally, without bias or favoritism. This neutrality is essential for maintaining a fair and trusted network where no single entity can gain an undue advantage over others.

Gnosis Chain has always been committed to these principles, and integrating Shutter's encryption technology strengthens this commitment. By encrypting transaction details, the Shutterized Gnosis Chain ensures that all transactions are treated equally. Validators cannot see the details of pending transactions, which prevents any form of preferential treatment or manipulation.

Malicious MEV - Mitigating Exploitation and Ensuring Security

Maximal Extractable Value (MEV) poses a significant threat to blockchain users. MEV happens when validators or other entities abuse their position to reorganize, add, or remove transactions for their benefit. This can lead to front-running, where a validator identifies a pending transaction and prioritizes a related transaction to make a profit, usually at the expense of the original user.

The Shutterized Gnosis Chain addresses this issue by encrypting transactions in the mempool. Validators cannot see transaction details until they are included in a block, preventing MEV exploits and protecting the user who initiated the transaction.

By mitigating the risks associated with MEV, the Shutterized Gnosis Chain enhances security and improves the user experience. Users can confidently engage in trades, knowing their transactions will be processed fairly and securely. This trust is crucial for the continued growth and adoption of Gnosis Chain, as it encourages more users and developers to participate in the ecosystem.

Censorship Resistance

Censorship resistance is a fundamental feature of decentralized networks. It ensures that no single entity can alter or block transactions, which is crucial for maintaining the integrity of the network and the freedom of its users. In traditional blockchain networks, there is a constant risk that validators or other powerful entities could censor transactions for reasons such as politics or economics.

The Shutterized Gnosis Chain enhances censorship resistance by using state of the art encryption. It keeps transaction details confidential until they are confirmed, preventing any single validator from selectively censoring or manipulating transactions. This ensures that all users have equal access to the network and that their transactions are processed without interference.

Maintaining Neutrality and Decentralization

The Shutterized Gnosis Chain is decentralized and strengthened by its threshold encryption technology. A decentralized group of Keypers is required to decrypt transactions, ensuring that no single entity controls the transaction process. This decentralization is essential for maintaining the network's neutrality and resilience, ensuring it remains open and accessible to all without bias or privilege.

Encrypted Mempool by Shutter

In a typical blockchain network, the mempool is where pending transactions wait to be included in a block by validators. These pending transactions are visible to everyone, leaving them vulnerable to potential exploitation, such as front-running and other types of MEV attacks.

Introducing an encrypted mempool transforms the current system by encrypting transaction details while they are in the mempool. Transaction data remains hidden from validators and other network participants until the transactions are confirmed and included in a block. The encrypted mempool guarantees that sensitive transaction information is protected, significantly reducing the risk of malicious activities.

How It Works from a User Perspective

Interaction with the Shutterized Gnosis Chain is designed to be as smooth and straightforward as possible for users.

Here's how it works:

1. Submitting Transactions: Users submit their transactions to Gnosis Chain as usual via the provided encrypting RPC. However, instead of being immediately visible to all in the mempool, the transaction details are encrypted using Shutter's threshold encryption technology.

2. Encryption While in the Mempool: Once the encrypted transaction details are submitted, they are broadcast to the network's mempool. The details are kept confidential, preventing unauthorized access or manipulation while the transactions await confirmation.

3. Transaction Confirmation: Validators add the encrypted transactions to a block. The details are decrypted and only become available on the public ledger after the transactions are confirmed. This process ensures that transaction data remains secure and private until the final step.

The primary difference for users is their transactions' improved security and privacy, which requires no additional steps beyond adding the encryption RPC endpoint to their wallet.

Technical Details of How the Shutterized Gnosis Chain Works

Here is a closer look at the technical details:

1. Threshold Encryption: This encryption method requires a minimum number of Keypers to cooperate in encrypting and decrypting transaction data. Each Keyper holds only a share of the keys, and only when a sufficient number of Keypers agree can the transaction data be decrypted.

2. Decentralized Keyper Set: The Shutter protocol utilizes a decentralized group of Keypers to oversee the encryption and decryption process. This decentralized approach guarantees that no single entity holds authority over the transaction data.

3. Broadcasting Encrypted Transactions: When a user submits a transaction, it is encrypted and broadcast to the sequencing contract. Validators can view pending transactions but can only access the details once the transactions are included in a block and decrypted by the Keypers.

4. Decryption and Finalization: After encrypted transactions are included in a block and validated, the Keypers provide the decryption keys for the transaction data. The decrypted transaction details are subsequently recorded on the public ledger, ensuring transparency and enabling participants to verify the integrity of the blockchain.

Only the Beginning

The Shutterized Gnosis Chain launching today is just the start. While this first phase has limitations, we are committed to gradually enhancing the system.

The processing of encrypted transactions is initially limited because fewer validators are participating. However, more validators are expected to join soon, significantly improving transaction speed and network robustness. As the development of the Nethermind client continues and the system's stability is confirmed, we encourage more Gnosis Chain validators to join the system. We also expect other client providers to include the ability to encrypt and decrypt transactions in the future.

The initial Keyper set consists of just seven Keypers. While this offers a basic level of security, we plan to expand this number in future phases alongside Shutter. Increasing the number of Keypers will enhance security and decentralization, strengthening the network.

Conclusion

Launching the Shutterized Gnosis Chain is a significant milestone in our journey to enhance blockchain security and integrity. This protects users from malicious MEV attacks and ensures a fair and unbiased transaction processing environment.

Looking forward, Gnosis Chain plans to add additional validators and Keypers and continually enhance transaction security and privacy.

Experience shielded trading on Gnosis Chain: Add the RPC endpoint to your wallet and start trading with enhanced security.

Learn more about the harms of malicious MEV: Educate yourself on the risks and how the Shutterized Gnosis Chain mitigates them.