7 min read

Beyond MEV Protection: 6 Uses Cases for Shutter's Commit-Reveal Technology

Beyond MEV Protection: 6 Uses Cases for Shutter's Commit-Reveal Technology

The Shutter commit-reveal mechanism was initially designed to prevent malicious MEV and censorship issues, which remains the primary focus. However, beyond these applications, it also has wide-ranging applications in fields that require secure and fair information handling and combating information asymmetries. Its unique properties and decentralized structure make it suitable for governance, blind auctions, gaming, and transaction scheduling.

By promoting information symmetry and enhancing base layer neutrality, Shutter can bring significant benefits to Layer 1 and Layer 2 ecosystems. As a developer, you can also utilize Shutter's technology for innovative projects and receive support through grants from Shutter DAO 0x36.

Are you working on a use case? Apply for a development grant from Shutter DAO 0x36.

Information Asymmetry Is Everywhere

The Shutter commit-reveal mechanism is a fundamental technology designed to improve security and fairness in decentralized systems. It addresses critical issues such as information asymmetry, censorship, and front running. This technique lets participants privately commit to a decision or transaction before revealing it publicly at a later, predetermined time. The commitment phase secures the data, preventing alterations afterward. The reveal phase ensures data transparency and verifiability once all commitments are made.

The decentralized Keyper set and threshold encryption technology ensures that no single party can decrypt early.

Explore how the Shutter commit-reveal mechanism can support blind auctions, governance processes, gaming, and transaction scheduling, ensuring transparency and fairness across diverse applications.

Shutter as a Generalized Commit-Reveal Gadget

Think of Shutters' commit-reveal mechanism as an additional tool that boosts the fairness of the base layer and significantly increases the value of Layer 1 and Layer 2 ecosystems. This mechanism promotes information equality and enables the development of various new use cases on top of the existing infrastructure.

Characteristics of Ideal Use Cases for Shutter Commit-Reveal Mechanism

The Shutter commit-reveal mechanism is particularly effective in scenarios where one or more of the following characteristics are present:

Information Asymmetry

Shutter performs exceptionally well in environments where data security and integrity are paramount, especially when unequal access to information can provide unfair advantages to certain parties. By encrypting data until the reveal phase, Shutter guarantees that no participant can act on privileged information before others, thus creating a fair and level playing field.

Censorship Resistance

In situations where information may be censored, Shutter's commit-reveal protocol offers a robust solution. It securely stores information in a verifiable and transparent manner upon reveal, guaranteeing that all actions and data are recorded and cannot be changed by outside influences. This helps to protect freedom of expression and ensure the accuracy of data.

Front Running Problems

Shutter effectively minimizes the risks related to front running, which occurs when entities exploit access to transaction details for their benefit. The system conceals transaction details until all information is made public to all participants simultaneously, preventing any party from acting on the data before it is universally available.

Advantages of Shutter Commit-Reveal

The threshold encryption approach utilized in Shutter offers a balanced compromise between security and practicality. It is superior to centralized services relying on trust, hardware-dependent protocols with vulnerabilities, and other expensive or impractical options.

Additionally, the Shutter commit-reveal mechanism's intuitive design enhances transaction security and integrity and significantly improves the user experience.

Automation of the Reveal Process: One of Shutter's significant advantages in user experience is the automation of the reveal phase. Automation ensures the reveal is performed precisely as scheduled, without user intervention, significantly reducing the risk of errors or omissions that could compromise the process. It is considerably better than alternatives, which require the user to execute a second transaction manually.

Reliability Over Extended Periods: The feedback from our integration partners has emphasized a critical advantage of Shutter's automated approach. For certain commit-reveal use cases, it would be impractical, if possible, for them to proceed without it. When a second action, such as a reveal transaction, is required days, even months after the initial commit, relying on user action introduces significant risk and uncertainty. Users might forget to complete a necessary action or might be unable to do so due to changes in circumstances. Shutter's design addresses this challenge by ensuring that once a commitment is made, the subsequent reveal will occur at the predetermined time, regardless of any further user action. This feature enables many long-term applications that depend on reliable, time-defined outcomes.

Deep Dive Into Shutter Use Cases

1. Shutter Governance

The commit-reveal mechanism used by Shutter is crucial for improving the transparency and fairness of governance processes in decentralized organizations. It is currently in use on Snapshot with Shielded Voting, but there are many more potential governance-related applications to explore.

  • Collective Decision Making: Shutter streamlines the decision-making process in projects like Nouns, where community members vote on endeavors such as proposals or art races. By securing votes until the reveal, Shutter ensures that each vote is uninfluenced by others, fostering proper community-driven outcomes.
  • Request for Proposal (RFP) Submissions: For RFPs needing to remain confidential to prevent copying or manipulation, Shutter guarantees that submissions are only disclosed once the evaluation period begins, ensuring a fair and competitive process.
  • Juror Voting (Kleros): In decentralized juror systems, Shutter allows jurors to vote anonymously on cases without fear of repercussion or outside influence. Encrypting these votes until all are submitted supports a fair and impartial adjudication process. In platforms like Kleros, where jurors are motivated to vote with the majority, Shutter's mechanism can protect voters' choices from being influenced by others. Encrypting votes until all are revealed simultaneously preserves the integrity and independence of the judicial process in decentralized dispute resolution.

2. Blind Auctions

Shutter's commit-reveal mechanism ensures that bids in blind auctions remain confidential until all bids are revealed simultaneously. This prevents any form of bid manipulation or unfair advantage, maintaining the integrity of the auction process. Blind auctions could benefit occasions like Nouns PFP auctions or the minting of The Memes by 6529.

3. Shutter for Gaming

Shutter's commit-reveal mechanism can significantly enhance gaming fairness and security, especially in strategic and competitive settings.

DAOplomacy: DAOplomacy is a decentralized game inspired by the classic "Diplomacy." Multiple DAOs compete to claim territories, executing secret moves simultaneously each round. Like MEV on the blockchain, the game faces the challenge of prematurely exposing a DAO's moves, which could lead to unfair strategizing.

To address this issue, DAOplomacy incorporates Shutter's technology, which uses threshold cryptography to prevent front running on Ethereum. This ensures that game strategies remain encrypted and concealed until all moves are executed simultaneously, maintaining game integrity by preserving secrecy and strategic surprise.

Other conceptual uses in gaming:

  • Matchmaking and Resource Allocation: Shutter could prevent unfair advantages in matchmaking and in-game resource acquisition by concealing player actions until all data is simultaneously revealed, ensuring equal opportunities for all players.
  • Game Mechanics Security: Shutter's technology could benefit concepts such as protecting spawn points, reducing latency manipulation, and securing server queue positions. It would encrypt data to eliminate unfair preemptive actions and maintain competitive integrity across various game formats.

4. Secure Scheduling of Transactions

This concept involves scheduling transactions to improve security and user experience. Shutter leverages the Keyper set's capabilities and an envisioned automatic reveal and execution mechanism to enable transactions to execute automatically at predetermined times without requiring further user input.

Transactions could be scheduled using Shutter's system, where users specify transaction details and timing in advance. Shutter's network of Keypers would securely hold these details until the designated time, at which point the transaction would be automatically executed. This system relies on robust threshold encryption to maintain confidentiality, preventing premature exposure or manipulation.

Example Use Case: (hidden iceberg) limit orders: In potential use, traders could set limit orders to purchase tokens at specific prices without manual execution. For instance, a trader might schedule a buy order if a token drops to a desired price. Shutter's proposed system would keep the order encrypted and hidden, protecting it from manipulation or front running.

5. NFT Minting and Auctions

By using its commit-reveal mechanism, Shutter can guarantee transparent and fair NFT minting and auction processes. It prevents front-running and other forms of manipulation, ensuring all participants have an equal opportunity without premature information leakage. This could be beneficial, for example, in ranked auctions by Verse, where the available supply is distributed amongst the top bidders when the sale ends.

6. Autonomous Agent Front Running

The commit-reveal mechanism of Shutter can help reduce the risks of front running associated with autonomous agents in DeFi and other automated systems. Autonomous agents, like trading bots, follow predefined algorithms and can quickly carry out transactions. While this enhances efficiency, it also raises potential issues where these agents could take advantage of market-moving information before it becomes public.

  • Protection Against Predictive Actions: Shutter uses a commit-reveal framework to secure transaction orders and their conditions. This ensures that the actions intended by the agents remain undisclosed until all transaction data is revealed simultaneously. By doing so, Shutter prevents agents from acting on unseen information that has not yet been disclosed to the entire network.
  • Maintaining Market Integrity: In markets where trading bots are prevalent, Shutter ensures a fair trading environment by preventing any participant, whether human or bot, from accessing critical transaction data in advance. This is particularly important in high-frequency trading, where even milliseconds can result in significant market advantages.
  • Enhancing Trust in Automation: By integrating Shutter's mechanism, developers can build more trustworthy autonomous systems that users can rely on to operate fairly without fear of internal data being leaked or exploited for front running.

Now, Let's Build This!

Shutter's commit-reveal mechanism has significant potential for improving security, fairness, information symmetry, and base layer neutrality.

If you are a developer or builder, we invite you to explore Shutter's capabilities for your projects!

If you're ready to innovate using Shutter for any of the use cases above, the Shutter DAO 0x36 offers grants to support your development. Join a community of pioneers in creating secure and equitable decentralized applications. Apply for funding to help realize your vision!

For more of what's to come, follow Shutter on X/Twitter and visit the Shutter Forum

Thought of another use case for the Shutter protocol? Join the Shutter Discord and share it with the community!

Subscribe to our blog and don't miss our next post!