Maximal Extractable Value (MEV) Protection on a DAG

TL;DR

This paper introduces Fino, a DAG-based BFT protocol that enhances MEV protection by integrating transaction hiding features without sacrificing throughput or incurring additional message overhead.

Contribution

It combines DAG-based BFT consensus with MEV-resistance techniques, achieving secure, high-throughput, and low-overhead protection against MEV attacks.

Findings

Fino operates with zero message overhead.

It integrates MEV-resistance without delaying transaction dissemination.

The protocol avoids complex cryptographic schemes.

Abstract

Many cryptocurrency platforms are vulnerable to Maximal Extractable Value (MEV) attacks, where a malicious consensus leader can inject transactions or change the order of user transactions to maximize its profit. A promising line of research in MEV mitigation is to enhance the Byzantine fault tolerance (BFT) consensus core of blockchains by new functionalities, like hiding transaction contents, such that malicious parties cannot analyze and exploit them until they are ordered. An orthogonal line of research demonstrates excellent performance for BFT protocols designed around Directed Acyclic Graphs (DAG). They provide high throughput by keeping high network utilization, decoupling transactions' dissemination from their metadata ordering, and encoding consensus logic efficiently over a DAG representing a causal ordering of disseminated messages. This paper explains how to combine these two advances. It introduces a DAG-based protocol called Fino, that integrates MEV-resistance features into DAG-based BFT without delaying the steady spreading of transactions by the DAG transport and with zero message overhead. The scheme operates without complex secret share verifiability or recoverability, and avoids costly threshold encryption.