Understanding Good and Bad MEV - and How Encrypted Mempools Stop the Bad

Shutter argues that encrypted mempools can stop harmful forms of Maximal Extractable Value (MEV) while preserving beneficial ones such as arbitrage, liquidations and back-running. The article describes malicious MEV as front-running, sandwich attacks, time-bandit attacks and censorship, which exploit users by reading pending transactions in the public mempool. Shutter's design encrypts transactions with threshold encryption, and a group of decentralized Keypers must reveal their parts of the key before transactions can be decrypted after block inclusion. The article acknowledges trade-offs: encrypted transactions are larger, causing slightly higher fees, and the system adds infrastructure complexity and minor delays. Shutter is already live on Gnosis Chain.