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mev-the-hidden-tax-of-crypto
Blog

Why Gaming Actions Should Not Be Public Before Execution

Public mempools are a critical vulnerability for on-chain games, enabling front-running bots to exploit player actions. This analysis argues for private transaction schemes like commit-reveal as a non-negotiable requirement for fair gameplay.

introduction
THE MEMPOOL PROBLEM

The Unwinnable Game: When Your Opponent Sees Your Move Before You Make It

Public mempools create a predictable, extractable game where user actions are front-run before execution.

Public mempools are a vulnerability. They broadcast transaction details before block inclusion, creating a predictable information asymmetry. This allows searchers and MEV bots to front-run profitable trades or liquidations.

Gaming logic must be state-based, not transaction-based. A game where the next move is visible in the mempool is solved instantly. This breaks deterministic fairness, the core of competitive play, by allowing pre-execution simulation.

Private transaction pools like Flashbots Protect solve this by submitting transactions directly to builders. For gaming, the solution is execution in a private state channel or a dedicated sequencer that batches and reveals actions simultaneously.

Evidence: In DeFi, over $1.2B in MEV was extracted in 2023, primarily via front-running visible swaps. Games like Dark Forest pioneered the use of zero-knowledge proofs to hide moves until a commitment phase ends, proving the model works.

thesis-statement
THE FUNDAMENTAL MISMATCH

Core Thesis: Public State is Antithetical to Game State

Blockchain's default transparency of pending actions destroys the strategic integrity and user experience required for competitive gaming.

Public mempools are a cheat engine. Every transaction is visible before confirmation, enabling front-running bots to snipe in-game actions, a flaw proven by MEV extraction on networks like Ethereum and Solana.

Game state requires private computation. Strategic moves in titles like Axie Infinity or Parallel must be hidden until resolution, a requirement incompatible with the public execution layer of EVM or SVM.

The solution is a private pre-execution layer. Systems like FHE coprocessors (e.g., Zama) or private state channels must compute outcomes off-chain, submitting only verified results to the public ledger.

Evidence: Games like Dark Forest use zero-knowledge proofs to hide player positions, proving that privacy is a prerequisite, not an add-on, for viable on-chain game mechanics.

THE PRIVACY IMPERATIVE

Gaming MEV: From Theory to On-Chain Reality

Comparing the impact of transaction visibility on player experience and game integrity.

Critical Metric / VectorPublic Mempool (Status Quo)Private Execution (Ideal State)Hybrid/Encrypted Mempool

Front-Running Likelihood

95% for high-value actions

< 1%

~5-15% (theoretical)

Latency to Execution After Intent

2-12 seconds (block time dependent)

< 100 milliseconds

1-3 seconds

Player-Perceived Transaction Failures

30-60% for competitive actions

< 0.1%

5-20%

Extractable Value per Player Action

$10 - $500+

$0.01 (gas only)

$1 - $10

Required Player Skill (to avoid MEV)

Advanced (must use RPC tricks, private pools)

None

Basic (use provided wallet)

Infrastructure Dependency

Ethereum Public Mempool, Flashbots MEV-Boost

SUAVE, Fairblock, Shutter Network

EigenLayer AVS, Anoma

Composability with DeFi

Developer Overhead for Integration

None (default)

High (requires intent architecture)

Medium (requires relayer integration)

deep-dive
THE FRONT-RUNNING PROBLEM

Architecting for Fair Play: Commit-Reveal and Beyond

Public on-chain actions create a toxic environment for competitive gaming by enabling front-running and information asymmetry.

Public mempools are toxic. Broadcasting a player's move before execution allows bots to front-run the transaction, stealing rewards or blocking actions. This destroys game integrity and drives users away from on-chain games.

Commit-reveal schemes are mandatory. A player first commits a hashed action, then later reveals it. This creates a cryptographic time-lock that prevents adversaries from reacting until it's too late. It's the foundational primitive for fair sequencing.

Simple commit-reveal has latency costs. The two-phase process adds inherent delay. For fast-paced games, this trade-off between fairness and responsiveness requires more advanced architectures like threshold encryption schemes or private mempools.

Real-world solutions are emerging. StarkNet's SHARP uses proof aggregation to batch commits, amortizing costs. Arbitrum's BOLD dispute protocol ensures correct sequencing in rollups. These are not theoretical; they are live infrastructure.

counter-argument
THE COUNTER-ARGUMENT

Steelman: "But Transparency is a Feature!"

Acknowledging the valid argument that public mempools provide a critical layer of accountability and composability for decentralized systems.

Transparency enables verifiable fairness. Public mempools allow any participant to audit transaction ordering and validate that block builders are not engaging in censorship or front-running. This is the foundational trust model for networks like Ethereum, where the mempool acts as a public bulletin board.

Public state enables permissionless composability. Protocols like Uniswap and AAVE rely on the predictability of pending transactions to build complex, interdependent DeFi operations. A fully private execution environment would break the atomic composability that defines the current DeFi stack.

The argument conflates ideals with reality. While idealized transparency is a noble goal, the current implementation creates a negative-sum game. The existence of sophisticated searchers and MEV bots from firms like Flashbots transforms the public mempool from a commons into a predatory hunting ground, negating the fairness it intends to provide.

protocol-spotlight
PRIVACY-PRESERVING GAME LOGIC

Builders on the Frontlines: Who's Solving This?

A new wave of infrastructure is emerging to keep game state and player actions confidential until they are finalized on-chain.

01

The Problem: Front-Running & Strategy Theft

Public mempools expose every move. In strategy games or on-chain economies, this allows sniping of limited assets and copying of profitable strategies before a transaction confirms.\n- Enables predictable MEV extraction from players.\n- Destroys competitive integrity and fair play.

100%
Exposed
<1s
Exploit Window
02

The Solution: Encrypted Mempools & Private RPCs

Projects like Flashbots Protect and BloxRoute offer private transaction routing to bypass the public mempool. This is combined with ZK-proofs for state transitions to hide action details.\n- Actions are submitted as encrypted intents.\n- Execution and settlement are decoupled, revealing only the final outcome.

0%
Leakage
~99%
MEV Reduction
03

The Architecture: App-Chains with Native Privacy

Gaming-specific rollups or app-chains (inspired by dYdX, Sorare) are integrating privacy at the protocol layer. Using zk-SNARKs (like Aztec) or confidential VMs, they keep game logic private.\n- Sovereign execution ensures no data leaves the chain until proven.\n- Enables truly novel game mechanics reliant on hidden information.

L2/L3
Stack
ZK-Proven
State
04

The Enabler: Intent-Based Settlement Networks

Frameworks like UniswapX and CowSwap's solver model demonstrate how to separate expression of a goal from its execution. Applied to gaming: players submit what they want to achieve, not how.\n- Solvers compete to fulfill the intent optimally.\n- Player strategy remains a black box to the network.

Intent-Centric
Paradigm
Multi-Solver
Competition
05

The Economic Layer: Concealed Bid/Ask Mechanics

For in-game asset trading, traditional AMMs leak price impact. Private order-book systems (e.g., zkRollup DEXs) or threshold encryption schemes allow players to place hidden bids and asks.\n- Prevents front-running on rare item drops.\n- Enables fair, Dutch-auction style initial distributions.

Hidden
Order Flow
No Slippage Leak
Guarantee
06

The Future: Fully Homomorphic Encryption (FHE) Games

The endgame: computation on encrypted data. FHE (pioneered by Fhenix, Inco) allows game logic to run on encrypted player inputs.\n- The game state itself is never decrypted on-chain.\n- Enables trustless, private on-chain poker and other perfect-information games.

FHE
Tech Stack
~2025+
Horizon
takeaways
THE FRONT-RUNNING PROBLEM

TL;DR for Game Architects and Investors

Public mempools expose in-game transactions, creating exploitable inefficiencies that directly harm player experience and studio revenue.

01

The MEV Extraction Tax

Public actions like item purchases or land sales are front-run, forcing players to pay 10-30% more in gas or lose the transaction entirely. This is a direct tax on player engagement.

  • Siphons Value: Extracted MEV flows to bots, not the game economy.
  • Erodes Trust: Players blame the game, not the infrastructure, for failed actions.
10-30%
Player Tax
$0 Revenue
For Studio
02

Strategy Spoiling & Game Integrity

Real-time strategy games are broken if opponent moves are visible in the mempool. This destroys the core competitive loop.

  • Predictable Actions: Bots can pre-compute and counter player strategies.
  • Ruined Surprise: Critical in-game events like ambushes or rare spawns are telegraphed.
0ms
Advantage Window
Broken Core
Game Loop
03

The Solution: Private Order Flow & Intents

Route transactions through private RPCs (like Flashbots Protect) or intent-based systems (inspired by UniswapX, CowSwap). Actions are settled without public pre-confirmation broadcast.

  • Guaranteed Execution: Players submit desired outcomes, not vulnerable transactions.
  • Studio-Controlled Flow: Enables fair ordering and can capture MEV for treasury or player rewards.
~99%
MEV Reduction
New Revenue
Stream
04

Economic Design Sovereignty

Public mempools cede control of your game's economic sequencing to external arbitrageurs. Private execution restores it to the game designer.

  • Controlled Sequencing: Ensure fair, game-logic-compliant transaction ordering.
  • Monetize Efficiency: Convert wasted MEV into player subsidies or protocol revenue.
100%
Control Regained
Strategic Asset
Order Flow
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