Ethereum Discusses New Ways to Prevent Bot Attacks

Ethereum will discuss new methods to hide transactions before execution on August 19, aiming to increase the difficulty for predatory bot operations. The focus of the discussion will be on the public mempool, where pending orders can be observed before they enter the blockchain, making them susceptible to automated traders. This exploitation is common in sandwich attacks, where bots buy the same asset upon detecting a pending swap transaction, pushing the price in a direction unfavorable to the user, and then immediately sell after the order is executed. Although this issue has lessened compared to previous peaks, it has not disappeared. The meeting will analyze several proposals aimed at concealing transaction details until their position in the block is determined, reducing the information advantage of bots and block builders. One of the proposals under analysis is LUCID, registered as EIP-8184, which envisions builders committing to sealed transactions with chargeable receipts and encrypted payloads without prior knowledge of the specific transaction operations. However, this model could lead to the decryption keys being held by the sender or an external key issuer, and currently, there are no rules in the Ethereum protocol to prove or penalize key withholding, premature disclosure, or abuse by issuers. Additionally, this proposal needs to be integrated into the broader roadmap of the network; LUCID aims to expand the inclusion list pipeline related to FOCIL, also known as EIP-7805, which empowers multiple validators to identify transactions that builders must include.