Eating sandwiches: Modular and lightweight elimination of transaction reordering attacks

TL;DR

This paper proposes a modular blockchain protocol modification that prevents profitable sandwich attacks, maintaining security with minimal latency increase and no reliance on trusted third parties or heavy cryptography.

Contribution

It introduces a lightweight, decentralized method to eliminate transaction reordering attacks in blockchain protocols without significant performance costs.

Findings

Sandwich attacks become unprofitable under the new protocol.

The protocol maintains security comparable to traditional blockchains.

Latency and computational overhead increase linearly.

Abstract

Traditional blockchains grant the miner of a block full control not only over which transactions but also their order. This constitutes a major flaw discovered with the introduction of decentralized finance and allows miners to perform MEV attacks. In this paper, we address the issue of sandwich attacks by providing a construction that takes as input a blockchain protocol and outputs a new blockchain protocol with the same security but in which sandwich attacks are not profitable. Furthermore, our protocol is fully decentralized with no trusted third parties or heavy cryptography primitives and carries a linear increase in latency and minimum computation overhead.