2025-06-12 –, Side Stage - Cinema 7
Censorship resistance and decentralization have long been core principles of public blockchains, yet Ethereum faces increasing threats from real-time transaction censorship, particularly impacting DeFi users. The current Proposer-Builder Separation (PBS) supply chain has led to severe centralization, with two builders controlling over 80% of blocks and half of all relays censoring transactions. A promising approach to address this is the "Holy Trinity of Censorship Resistance", a combination of enshrined PBS (ePBS), FOCIL (Fork-Choice enforced Inclusion Lists), and encrypted mempools. This approach can even be extended by using Smart Accounts which give users more control over the transaction inclusion process. While this proposal has the potential to restore Ethereum’s fairness and neutrality, challenges remain, particularly around the encrypted mempool design. Those challenges include designing a generalized encryption interface that supports multiple encryption mechanisms, ensuring that encrypted transactions remain decryptable despite changing encryption parameters, and guaranteeing a timely decryption of transactions.
In this talk we will discuss how these 3 pillars can work together and how they can be extended by Smart Accounts. Additionally, we will show a (Gnosis Chain) mainnet demo of the encrypted mempool in action from an end user perspective.
Censorship resistance and decentralization have been foundational principles of public blockchains since the publication of Bitcoin’s whitepaper. However, in today’s Ethereum landscape, these values are increasingly challenged by real-time censorship, which particularly impacts DeFi users relying on time-sensitive trades.
The current Ethereum transaction pipeline, dominated by Proposer-Builder Separation (PBS), faces severe centralization issues. Today, two builders control over 80% of all blocks, and 50% of relays actively censor transactions. To combat this, the community considers a promising solution—coined the "Holy Trinity of Censorship Resistance"—which consists of a combination of enshrined PBS (ePBS), FOCIL (Fork-Choice enforced Inclusion Lists), and encrypted mempools.
* ePBS removes the reliance on centralized relays in the transaction supply chain by integrating PBS directly into Ethereum’s consensus layer, reducing censorship risks from intermediaries.
* FOCIL introduces an inclusion list mechanism, ensuring that a committee of validators enforces transaction inclusion in every block.
* Encrypted mempools protect users from frontrunning and censorship by keeping transactions private until inclusion is guaranteed.
While these protocol-level changes are crucial, they can be complemented by user-level tools to ensure maximum censorship resistance. Smart accounts offer a powerful mechanism to prevent frontrunning and enhance censorship resistance by leveraging encrypted ERC-4337 smart account transactions (UserOps). These UserOps can include a verification step to ensure they are executed in the correct order and at the correct index within a block — typically at the top — before carrying out their main action. If this check fails, the transaction won’t execute, making frontrunning impossible. Smart accounts also offer protection in cases where the encrypted transaction gets revealed prematurely, which would otherwise make it frontrunnable.
Even though this is a rather long-term vision, we believe that the combination of these three technologies has the potential to re-establish Ethereum’s core values of fairness and neutrality. However, there are still some challenges that remain to be solved, particularly about the encrypted mempool design:
* Openness of Encryption Technology: Can we build a generalized encryption interface that allows the use of any encryption/decryption mechanism? This would allow us to abstract the exact encryption type and leave that choice up to the provider of the encrypted mempool.
* Ensuring Decryption for Pending Transactions: When encryption parameters change, e.g., due to committee rotation, periodic key updates, or a transition to a new cryptographic scheme, pending transactions encrypted under the old system must still be decryptable. How can we ensure that?
* Best Encryption Type: Which type of encryption mechanism offers the best liveness and security guarantees under the most reasonable assumptions?
* In-Protocol vs Out-of-Protocol: In how far should the three techniques (ePBS, FOCIL, encrypted mempools) be enshrined into the Ethereum protocol and in how far should they operate on the application layer?
* Inclusion Enforcement: What is the best measure to enforce inclusion of transactions from the IL?
Andreas is a cryptography researcher at brainbot gmbh working on the Shutter Network with a particular interest in threshold cryptography and the design of encrypted mempools for protection against malicious MEV and censorship attacks.
