Research

dYdX Trusted Execution Environment Research

Funded

Project link

Funding amount

$20,000 (+$30,000 success)

Start date

July 2023

Execution

3 months

Team

Xenophon Labs

Description

In response to MEV and trade censorship issues, dYdX would like to explore the implementation of Trusted Execution Environments (TEEs) (e.g. SGX server) on the protocol's validator set. TEEs would allow the protocol to manage client deployments and enable encrypted market order data, preventing censorship and frontrunning. The goal of this research is to explore the viability of TEEs as a solution to MEV. The team will experiment with bandwidth and order processing on TEEs, and develop a framework for implementing this as a solution. If the research is successful, and the dYdX community or contributors chooses to use the framework, the team will unlock an additional success fee.

Purpose

Mitigating, or even eliminating, MEV is a top priority for dYdX heading into v4. At launch, dYdX v4 will not have a formal solution for preventing and managing MEV behavior on behalf of the validator set. This grant will explore the use of TEEs - an increasingly popular choice for privacy and client attestation - as a potential solution to MEV on v4. A successful framework and implementation of TEEs could redefine the entire v4 protocol.

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Impact & Metrics

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Four Pillars