Ethereum Proposes EIP-8105 to Combat MEV via Encrypted Mempool

Ethereum is exploring a fundamental shift in how transactions are handled with the introduction of EIP-8105, a proposal for a 'Universal Enshrined Encrypted Mempool.' The initiative seeks to eliminate the visibility of transaction payloads before they are included in a block, effectively neutralizing the ability of MEV bots to front-run or 'sandwich' user trades. Currently, the public nature of the mempool allows sophisticated bots to reorder transactions for profit, a practice that costs Ethereum users an estimated $60 million annually. While various out-of-protocol fixes have been attempted, EIP-8105 proposes a protocol-level solution that is scheme-agnostic, meaning it can integrate multiple encryption technologies such as MPC committees, TEEs, and fully homomorphic encryption. The proposal introduces a 'key provider registry' and two new transaction types: 0x05 for encrypted payloads and 0x06 for decrypted ones. Under this system, an encrypted transaction is first included in a block. Subsequently, key providers reveal the decryption keys, and a Payload Timeliness Committee (PTC) validates the process. If successful, the transaction is executed in the following block. To prevent secondary MEV, the proposal mandates a specific block order: decrypted transactions first, followed by plaintext, and ending with encrypted transactions. While some risk remains regarding key provider behavior, the proposal suggests using trust graphs to mitigate these vulnerabilities. If implemented, this would significantly enhance the fairness and security of the Ethereum network for both retail and institutional users.