Shutter: Leveling the Playing Field

The Shutter ecosystem has reached a critical point in terms of technological readiness, ecosystem collaborations, and community participation.

As a core developer of Shutter, we would like to take this opportunity to share our vision for what Shutter is all about and explain why it matters.

Base Layer Neutrality, Information Symmetry, Accessibility

Shutter is a system that focuses on base layer neutrality, information symmetry, and accessibility by using threshold encryption with a Distributed Key Generation (DKG) mechanism.

In a Shutterized system, users encrypt their transactions or votes until their inclusion and order are fixed. Only then does a threshold amount of Shutter Keypers collaboratively provide a decryption key that can be used to decrypt and execute the transactions. This approach ensures that everyone sees the transactions or votes simultaneously, which improves information symmetry and prevents front-running, censorship, and vote manipulation.

Public blockchains are built on the values of base layer neutrality, information symmetry, and accessibility. These values are crucial for the Ethereum community and end users alike. However, many individuals, both inside and outside the crypto space, feel excluded and vulnerable to scams regarding DeFi. This is a sad reality. Shutter strives to create an equal playing field that fosters an efficient, inclusive, and dependable marketplace.

Shutter is a versatile time-lock encryption gadget. Beyond MEV, censorship resistance, and DAO governance, the Shutter protocol has many potential applications for commit-reveal schemes and time-lock encryption.

The Importance of Information Symmetry

Information asymmetry is a natural outcome of an open and public blockchain system. Instead, information symmetry is necessary for specific values such as decentralization and openness. Despite the widespread support for information symmetry, individuals and organizations often have to work within existing structures where information asymmetry is prevalent.

Currently, on open blockchains, information is not uniformly available, which enables influential players to exploit it for their benefit, creating an unfair environment. This concept is also relevant in a centralized exchange or Web 2.0 scenario, where the application host is the dominant player.

In a world that's becoming increasingly interconnected, information asymmetry can lead to unfair advantages and centralization, posing a fundamental risk to blockchains. Shutter believes that fostering an environment of information symmetry is crucial in promoting a fairer and more just interaction space on the open web. Providing an environment that allows people to engage with each other fairly is the key to creating a better tomorrow.

Many projects, applications, and infrastructures face a common challenge. To address these needs, Shutter DAOs and Keypers could offer their services. A suitable analogy is EigenLayer, which provides a platform for economic security. Projects unable or unwilling to develop their own economic security model can integrate with the EigenLayer system to obtain or borrow economic security. Similarly, projects that require encryption to ensure information symmetry for their users can access a service designed for this purpose. This service could include chains, sequencers, marketplaces, voting systems, MPC, and others.

In the future, Shutter DAOs and Keypers may become the go-to options for decentralized encryption services.

MEV, Transaction Supply Chain Centralization and Censorship

Malicious MEV involves exploiting transactions for profit by manipulating transaction order. While it is impossible to calculate the full impact of malicious MEV, experts estimate that it results in Ethereum end users losing hundreds of millions of dollars annually.

Some existing and proposed "solutions" to malicious MEV introduce centralization risks due to the required high degree of trust.

By centralizing certain parts of the transaction supply chain infrastructure, these so-called "solutions" introduce new ways to censor transactions and make it easier to censor them on a protocol level. This can be seen in cases where the solution adheres to sanctions lists, such as the Office of Foreign Assets Control (OFAC) list.

Through encryption of transactions, Shutter is promoting fairness and preventing exploitative practices. This is a crucial step in safeguarding the integrity and equitable access of blockchains, which are under threat from centralization and censorship tendencies. By taking action against these challenges, we can ensure that blockchain technology continues to be a force for good in the world.

Additional Use Cases and Applications

In the context of DAOs, Shutter ensures that governance votes are cast in secrecy, safeguarding against undue influence and ensuring a fairer decision-making process.

An example of how Shutter addresses information asymmetry is in gaming. DAOplomacy is a decentralized game inspired by the classic board game, "Diplomacy." However, it faces a unique MEV-type problem due to its gameplay and structure. To ensure that all DAOs have the same information each round, Shutter is utilized to encrypt DAO game moves.

Shutter Technology Stack

Our primary tool to achieve base layer neutrality, information symmetry, and accessibility is time-lock threshold encryption. However, there are other options. Other technologies could complement or replace time-lock threshold encryption, and this is not a binary choice. It is a spectrum where different technologies offer various trade-offs and may be more suitable for specific use cases. Eventually, Shutter intends to diversify its technology stack to provide more appropriate technologies for its users. This will effectively broaden the toolbox available for solving their problems.

Although we believe threshold encryption is a powerful and practical primitive, Shutter is not limited to using it exclusively. We are thrilled to explore advanced cryptographic techniques such as Fully Homomorphic Encryption (FHE) and Multi-Party Computation (MPC), which could significantly broaden Shutter's usefulness across various applications and sectors. FHE and MPC could also enable the idealized "cryptography endgame" of being able to perform everything possible on Ethereum today, yet in a fully encrypted way and with built-in accountability/auditability. While FHE and MPC are not yet practical for most envisioned applications, in some sense, Shutter can be seen as the most practical first step toward this endgame.

Shutter possesses the potential to pioneer research and transform discoveries into tangible products with the resources available in the community.

In a world where knowledge is power, encryption reigns supreme. Shutter's technology and ecosystem are invaluable, and we can establish a sustainable economic revenue model that will drive innovation forward.

Developers Extend Collaborations

Significant progress has been made in recent months in developing Shutterized shielded voting on Snapshot, integrating with Gnosis Chain, and creating an encrypted mempool for the OP Stack. Additionally, collaborations with EigenLayer, Espresso, Mode, and other key players in the L2 space have been announced, including with rollup-as-a-service providers (RaaS). These collaborations, coupled with the proliferation of new L2s and the need for L2s to distinguish themselves (which can be done with the encrypted mempool), will further accelerate the growth of the Shutter ecosystem.

Shutter DAO 0x36 and the Path Towards Decentralization

The development of Shutter's governance framework has been a significant milestone in its journey towards a more decentralized model. The introduction of DAO participation, Keyper roles, delegate systems, and active voting have played a crucial role in achieving this goal. The community has come together to solve problems, delegates have stepped up, and new partners have been welcomed. It's been fantastic to see individuals making proposals and voting on them both on- and off-chain.

Token distribution and incentive alignment are crucial aspects of decentralization. Shutter DAO 0x36 was launched with an initial genesis allocation for approximately 12,000 early users, contributors, community members, and key partners. However, this is only a tiny portion of the Shutter ecosystem and its users. For instance, there are over 43,000 addresses that utilized Shutterized shielded voting on Snapshot.

Recently, Shutter DAO 0x36 accepted a proposal from Fjord Foundry to conduct a Shutter Token (SHU) Liquidity Bootstrapping Pool (LBP). The SHU LBP took place from February 21 to February 25, 2024. The event successfully raised $8.3M for Shutter development and growth. The LBP also helped further decentralize the Shutter DAO 0x36 by adding almost 2,000 new token holders. It was an exciting development for the whole Shutter community.

What’s Next

As Shutter evolves, we are committed to pushing the boundaries of cryptographic innovation and expanding the protocol's capabilities. Our focus is on enhancing our technology stack with advancements like Fully Homomorphic Encryption and Multi-Party Computation while integrating with various ecosystems. By doing so, we aim to broaden Shutter's applicability across different sectors and use cases, reinforcing its position as a leader in secure, equitable blockchain transactions.

At this critical juncture, Shutter is on the brink of reshaping the blockchain landscape, poised to redefine security and integrity. With our unwavering commitment to base layer neutrality, accessible information symmetry, and inclusivity, we are tackling the existing challenges within the blockchain space and paving the way for a more equitable, decentralized future. We firmly believe that with the support and engagement of our community, Shutter will revolutionize blockchain interactions, making them more accessible, fair, and secure for everyone.

Stay tuned for upcoming blog posts that delve deeper into the Shutter ecosystem. One of the upcoming posts will focus on a proposed technological roadmap for the Shutter protocol.

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