We are excited to announce that the Shutterized Chiado testnet is now live! This is a significant milestone as it represents the first live implementation of the Shutter protocol on a full testnet. This integration is a substantial step forward in enhancing the Gnosis Chain ecosystem through transaction encryption as we progress towards the Shutterized Gnosis Chain. 

This represents the complete first stage of Shutterized Gnosis Chain integration, including the necessary client changes by Nethermind and the encrypting RPC proxy. Earlier, we announced the Alpha Keyper Testnet Chiado, which was focused on the contracts and the Shutter Keyper client. You can find more information about that on the Gnosis Blog.

Utilizing a Shutterized system for encrypted transactions provides several significant advantages for users. Primarily, it enhances privacy by concealing transaction details and safeguarding against front running and other malicious activities that could exploit transaction information for profit (which currently amounts to hundreds of millions of dollars lost each year across chains). This ensures a more equitable trading environment where users are less vulnerable to manipulation. Furthermore, encrypted transactions help to preserve the integrity of the transaction order, thereby enhancing the security of user activities on the blockchain. A Shutterized system promotes a more secure, private, and fair user experience.

Discover everything you need to know about the Shutterized Chiado testnet and learn how you can get involved as a user or a validator!

How to Use Encrypted Transactions on Chiado

As a user, you can try out the Shutterized Chiado simply by switching to an RPC endpoint that allows encrypted transactions. Nothing else is required from the user's perspective.

Using With MetaMask

Go to Settings, select Networks, Add network, and then Add a network manually.

Enter the following details, and you will be good to go!

Network name

Shutterized Chiado

New RPC URL

https://erpc.chiado.staging.shutter.network

Chain ID

10200

Currency symbol

XDAI

Block explorer URL (Optional)

https://gnosis-chiado.blockscout.com

First Phase of Shutterized Chiado

This first phase will be opt-in for the validators and users wishing to encrypt their Chiado transactions. The Nethermind client has been updated and is now available and optional for validators on the testnet. To participate in the Shutterized system, validators must register through a smart contract, and a script is available to facilitate this process. For the Chiado testnet, a dedicated Shutterized RPC is provided, and users need to switch to it for transaction encryption.

The transition requires a sufficient number of validators for a smooth user experience. Initially, an opt-in RPC will be available for encrypted transactions. If successful, major RPC providers will be encouraged to adopt encrypted transactions as the default in the near future.

This launch marks a significant advancement in blockchain security and privacy. It protects users from front running and malicious activities and invites validators and users to contribute to a more secure Gnosis Chain ecosystem.

Nethermind Client for Validators

The Nethermind client has been updated to support Shutterized transactions and is now available and ready for Chiado validators. Participating in the Shutterized system is entirely optional for the validators. Nethemind is widely used among the Chiado validators, including DAppNode users. Validators should be aware that automatic updates of the Nethermind client may not be enabled automatically. Currently, no other clients have support for Shutterized transactions, and validators using them won't be able to participate in encrypting transactions. 

Validators must register through a smart contract to opt into the system. A script is available to facilitate easier registration for those wishing to join. However, validators must still manually sign the transaction with their key to participate. This ensures that their participation in the system is smooth and secure.

Key details for validators:

RPC: https://erpc.chiado.staging.shutter.network

Relayer: https://gnosis-chiado.blockscout.com/address/0xfA606b7eE5Cb3Bb4580FBAa304fE245F91799418

Sequencer Contract (Encrypted Mempool): https://gnosis-chiado.blockscout.com/address/0xd073BD5A717Dce1832890f2Fdd9F4fBC4555e41A

Relay Operation and Encrypted Transactions

We at brainbot operate a relay for the Chiado testnet. All encrypted transactions pass through this relay to ensure secure and efficient handling. Users can utilize a public RPC to encrypt their transactions. The service relays these encrypted transactions and sends them on-chain.

There will be a dedicated Shutterized RPC for the Chiado testnet. Users must opt-in by switching to this RPC to ensure encrypted transactions.

Validator Threshold and Block Inclusion

A minimum threshold of validators must opt-in to prevent significant gaps between blocks containing encrypted transactions. Transactions are sent to a contract on-chain, where validators and Keypers pick them up using a First In, First Out (FIFO) strategy. Another transaction is needed to include these in a block. Once decrypted, these transactions will appear as standard transactions, and you can view them as normal transactions on a block explorer, for example.

Metadata Obfuscation

The encrypted transaction metadata will largely be obfuscated to maintain the privacy of the transactions. However, the gas used will remain visible. This transparency ensures that validators and Keypers can create blocks that adhere to the gas limit, maintaining efficiency and avoiding overloading the block. All blocks will also include a portion of the block space for regular transactions in addition to the encrypted ones.

Ensuring a Smooth Transition

It is crucial to have enough validators opting in for a smooth user experience. Initially, an RPC will be available for users to opt in and encrypt their transactions. If the rollout goes well, we plan to encourage major RPC providers to adopt encrypted transaction types as the default setting. This transition aims to make the Chiado testnet a permanent, secure environment for testing and development.

Caveats and Shortcuts

Trust assumption on the encrypted RPC: In this deployment, we have implemented an encrypted RPC endpoint. Users can send transactions to this endpoint in plaintext, and the system handles the encryption. This reduces the burden on users, as they do not have to perform the encryption themselves.

Incompatible cryptography components

While these steps enable us to quickly ship a functioning version of the encrypted mempool on Chiado, they have drawbacks. For example, relying on an RPC endpoint to manage encryption could pose a security risk if compromised.

Conclusion

The launch of the Shutterized Chiado testnet represents a significant advancement in our efforts to enhance the Gnosis Chain. By enabling encrypted transactions, we aim to protect users from front running and other malicious activities. We invite validators and users to join us in this exciting new phase and contribute to a more secure Gnosis Chain ecosystem.

Try It Out Now!

You can now experience the Shutterized Chiado by switching to an RPC endpoint to test encrypted transactions.

Do you have a favorite DApp on Chiado that you recommend others try? Share it with others at Shutter Discord!

More to Come

In the future, there should hopefully be a way for people to see how encrypted transactions work and, for example, how trades are shielded via a dashboard or an explorer integration. These are being considered. Let us know what you think of such tools!

For more of what's to come, follow Shutter on X/Twitter, visit the Shutter Forum, and join our Shutter community on Discord.

Stay tuned for more updates as we continue the journey toward a Shutterized Gnosis Chain!