Exciting news for the Neo X EVM sidechain TestNet – the Anti-MEV functionality has officially launched! This upgrade, activated at block height 2,088,000, introduces enveloped transactions and threshold signature support to enhance transaction fairness and network security.
MEV strategies have been a major concern in the blockchain space, causing billions of dollars in user losses annually. These practices disproportionately affect retail users and undermine the integrity of DeFi products. Neo X is taking a proactive approach to combat these exploits and protect its users from transaction-level manipulation by implementing innovative security measures.
Enveloped transactions: A three-step MEV defense
The Neo X approach revolves around “enveloped transactions,” a technique that adds an extra layer of security by concealing transaction details until after block finalization. This process consists of three key steps:
- Encryption: Transactions are encrypted before reaching consensus nodes, preventing validators and MEV searchers from identifying valuable transactions.
- Uniform Processing: Consensus nodes treat all enveloped transactions equally, blending them with regular, unencrypted transactions.
- Threshold Decryption: After finalizing the transaction order, the network performs threshold decryption, requiring collaboration from two-thirds of consensus nodes to decrypt transactions and finalize the block.
This three-step process is made possible by “distributed key generation,” a cutting-edge cryptographic technique developed by the Neo X team.
Achieving single-block finality
Prior to this upgrade, Neo X experienced a one-block delay for block hash finality to mitigate reorganization issues. By implementing threshold block signatures, the network now achieves single-block hash finality, reducing the risk of reorganizations and enhancing the sidechain’s usability and security.
Developers interested in exploring the MEV-resistant EVM environment can access documentation or engage with the community on the official Neo Discord server for further information.
For more details, check out the full announcement here.