A fair ordering protocol is a set of rules and procedures designed to prevent malicious reordering of transactions in a distributed ledger. Its purpose is to ensure that transactions are processed in an order that reflects their submission time or other neutral criteria, rather than being manipulated for profit by validators or other network participants. This mechanism helps to mitigate frontrunning and other forms of value extraction. It promotes equitable transaction processing.
Context
The pursuit of fair ordering protocols is a significant area of development in decentralized finance (DeFi) to combat miner extractable value (MEV) and ensure market integrity. Different approaches, such as threshold encryption and commit-reveal schemes, are being explored to achieve provable fairness. The success of these protocols directly impacts user trust and the efficiency of digital asset trading.
Integrating threshold encryption into the mempool decouples transaction submission from ordering, structurally eliminating frontrunning and centralizing MEV.
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