Backrun Protection

Transactions are submitted to a private transaction pool instead of the public mempool, hiding them from searchers and bots. This is often implemented via a trusted builder or a secure RPC endpoint. Key aspects include:

• Encrypted Order Flow: Transactions are encrypted until inclusion in a block.
• Direct Builder Submission: Bypasses public peer-to-peer gossip networks.
• Examples: Flashbots Protect, BloxRoute's Private RPC.

A two-phase process where a user first commits to a transaction (e.g., by submitting a hash) and later reveals the full details. This prevents frontrunners from seeing the actionable intent until it's too late to exploit. The scheme involves:

• Commit Transaction: Sends a hash of the future transaction details.
• Reveal Transaction: Discloses the full transaction, which is only valid if it matches the prior commit.
• Time Delay: Enforces a waiting period between commit and reveal.

Transactions are encrypted with a threshold encryption scheme where a quorum of validators or builders must collaborate to decrypt them. This ensures transactions remain private until they are included in a proposed block. Characteristics are:

• Distributed Key Shares: The decryption key is split among multiple parties.
• On-Chain Decryption: Decryption occurs only at the block construction phase.
• Implementation: Used by protocols like Shutter Network to prevent MEV extraction.

Protocol-level rules that enforce a fair ordering of transactions within a block to neutralize the advantage of bots. These protocols define a canonical order based on criteria other than gas price, such as:

• Time-Weighted Fairness: Prioritizes the first-seen transaction.
• Randomized Ordering: Introduces randomness to block construction.
• Leader Election: A designated, accountable entity orders transactions. This aims to make frontrunning and sandwich attacks economically non-viable.

User-defined parameters that act as a last line of defense against sandwich attacks. While not proactive protection, they limit potential losses:

• Slippage Tolerance: The maximum acceptable price deviation for a swap. A very low setting (e.g., 0.1%) can cause transaction failure but prevents harmful sandwiches.
• Transaction Deadline: A timestamp after which the transaction is invalid, preventing it from being held in the mempool and targeted. These are critical wallet-level settings every user should configure.

Redirects the value extracted from transaction ordering (MEV) back to users through a sealed-bid auction. Searchers compete for the right to order transactions in a block, and a portion of their bid is paid to the user. This transforms a threat into a rebate. The process involves:

• Order Flow Auction (OFA): Users' transactions are auctioned to builders/searchers.
• Payment for Order Flow (PFOF): Users receive a share of the winning bid.
• Example: The Flashbots SUAVE initiative aims to democratize this process.

A core technique where a user's transaction is bundled with a protective transaction (like a MEV capture) by a trusted third party (e.g., a searcher or block builder). This ensures the protective transaction executes immediately after the user's transaction in the same block, preventing others from inserting a profitable transaction in between. This is often facilitated by Flashbots SUAVE or private RPC endpoints.

A cryptographic method to hide transaction intent until it is mined. The user commits to a transaction with a hash, which is only revealed and executed by a relay or builder at the last possible moment. This prevents frontrunning and makes the transaction un-backrunnable because its details are opaque to the public mempool. A classic implementation is the EIP-1014 (CREATE2) based commit-reveal scheme.

Used in networks like Shutter Network to prevent front- and backrunning. User transactions are encrypted with a distributed key before being sent to the mempool. The decryption key is only revealed by a decentralized keyper committee after the block is finalized, making transaction ordering decisions blind to the content. This neutralizes time-bandit attacks and generalized backrunning.

Protocols that enforce a canonical, fair order of transactions, often based on the time they were received, rather than allowing builders to reorder for maximal extractable value (MEV). By defining a deterministic order (e.g., first-come-first-served), FSS eliminates the opportunity for profitable backrunning. This is a L2 or app-chain level solution, as seen in Arbitrum's Timeboost or Chainlink FSS.

Users direct their transaction flow through a private channel (like Flashbots Protect or a RPC provider) instead of the public mempool. These providers auction the right to execute the transaction and its potential backrun to specialized searchers. The winning bundle guarantees the user receives a portion of the captured MEV as a rebate, economically disincentivizing harmful backrunning.

A fundamental, user-controlled defense in Automated Market Makers (AMMs). By setting a tight maximum slippage tolerance (e.g., 0.5%) and a short transaction deadline, users limit the profitability of a backrun. If a backrunner's arbitrage would push the price beyond the user's slippage limit, the user's transaction reverts, making the attack unprofitable. This is a critical first line of defense for DeFi users.

A backrun is a type of MEV attack where a searcher's transaction is deliberately ordered to execute after a known user transaction to profit from its on-chain effects. Common examples include:

• Arbitrage: Profiting from price differences created by a user's large trade.
• Liquidation: Sniping a liquidation opportunity triggered by a user's undercollateralized position.
• NFT Purchases: Buying a newly listed NFT before others after detecting the listing transaction.

A core technical solution is the commit-reveal scheme. Users submit a hashed, encrypted version of their transaction intent (the commit). After a delay, they reveal the full transaction details. This prevents searchers from seeing the transaction's profitable side effects until it's too late to exploit them. This method adds latency but significantly increases user cost certainty.

Transactions are sent to a private mempool or encrypted mempool (e.g., Flashbots Protect, Taichi Network) instead of the public peer-to-peer network. These private channels keep transactions hidden from general searchers until they are included in a block by a cooperating validator or builder, eliminating the opportunity for predatory backrunning.

These are systemic approaches to backrun protection:

• Fair Sequencing Services (FSS): Use cryptographic techniques like threshold encryption to ensure transactions are ordered by arrival time, not profitability.
• Order Flow Auctions (OFAs): User transaction flow is auctioned to builders/searchers. The winning bidder pays the user for the right to execute the transaction, turning potential extracted value into a rebate.

Backrun protection involves key trade-offs:

• Latency: Commit-reveal and private relays add delay to transaction execution.
• Centralization Risk: Relying on a few private relay providers creates trust assumptions.
• Cost: While protecting from negative MEV, these services may have fees or reduce potential positive MEV (like arbitrage gains) for the user.
• Ecosystem Fragmentation: Different protection mechanisms can fragment liquidity and transaction flow.

Frontrunning: A transaction ordered before a user's transaction, often to buy an asset the user is about to buy, driving up the price. Sandwich Attack: A combined frontrun and backrun around a user's trade. MEV-Boost: A protocol that separates block building from proposal, central to the current MEV ecosystem where protection tools operate. SUAVE: A nascent decentralized block builder and OFA network aiming to democratize MEV extraction.