The Dark Forest
MEV has long been recognized as a problem on open, public networks like Ethereum. One of the earliest explorations of the issue was a post titled Ethereum is a Dark Forest, written by a white hat hacker in 2020.
It starts with the author realizing they can recover Uniswap liquidity tokens that have been accidentally sent by a user to the pair contract itself. Those tokens, with a value of around $12,000 at the time, could be retrieved by anyone who knew how the contract worked and who realized they were there.
The problem was, just like in Cixin Liu’s sci-fi classic The Dark Forest, drawing attention to yourself is a bad idea. The predators? Bot “monsters” that watch pending transactions, seeking to exploit them for profit. The writer describes the problem of trying to retrieve the money for the owner:
“It would be like a flashing ‘free money’ sign pointing directly at this profitable opportunity. If these monsters were really in the mempool, they would see, copy, mutate, and frontrun my transaction, taking the money before my transaction was included.”
Several hours later, armed with a custom contract written by some of Ethereum’s best security engineers, he was ready to try. The contract obfuscated the call, splitting it into two to avoid it being simply copied by a bot. The two parts would be executed in the same block to leave minimal time for an attacker to react.
“After several failed attempts and resets, the time pressure got to us, and we got sloppy. We let the second transaction slip into a later block. It was a fatal mistake.”
The bots swept the funds up. This was the first evidence for generalized front-running bots on Ethereum, capable of highly sophisticated attacks. The author warned that “The future is only going to get scarier” — and that was five years ago.
COTI Fixes This
COTI uses garbled circuits to prevent attackers from exploiting transactions before they are confirmed on the blockchain. Garbled circuits are a fast, lightweight solution that can preserve end-to-end privacy, processing transactions without revealing anything on-chain in plaintext. They allow for a combination of speed and scalability that is unique for decentralized confidential computing (DeCC).
COTI’s confidential on-chain operations have many uses such as MEV-proof DeFi transactions, secure data storage, private multi-party computation, and more — all with optional disclosure for compliance! Chose COTI for everything from private DEX trading, and RWAs, to AI and ML operations with encrypted data sets.
Welcome to the new era.
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