Skale Labs, a blockchain development company, has introduced a new protocol aimed at addressing the growing concerns around Maximal Extractable Value (MEV) in blockchain networks. The protocol, known as Blockchain Integrated Threshold Encryption (BITE), is designed to prevent common forms of MEV such as front-running and sandwich attacks by operating directly at the consensus layer.

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Skale Labs Introduces BITE Protocol

How BITE Works at the Consensus Layer

BITE encrypts blockchain transactions before they enter the mempool, the area where pending transactions wait to be confirmed. This encryption ensures that transaction details remain hidden from all parties, including validator nodes, until after block finalization. Once the block is finalized, validators then decrypt the transactions. This process prevents any participant from viewing or manipulating the order of transactions prior to their inclusion in a block.

By implementing encryption at this stage, BITE removes the opportunity for validators and other actors to exploit transaction visibility for profit. According to Skale Labs, this method of handling MEV is a first in that it operates at the consensus layer while maintaining the network’s performance and decentralization.

Skale Labs Introduces BITE Protocol

Implications for DeFi and Web3 Gaming

Stan Kladko, co-founder of Skale Labs and the creator of BITE, stated that the protocol addresses MEV in a way that avoids compromising the foundational aspects of blockchain architecture. Jack O’Holleran, CEO of Skale Labs, pointed to the impact MEV has had not only in decentralized finance but also in blockchain-based gaming environments. O’Holleran noted that in web3 gaming, players who engage in asset trading or make in-game strategic decisions have faced the same vulnerabilities as DeFi users.

The ability of external actors to view and act on transaction data before confirmation can result in unfair advantages, undermining the integrity of gameplay.  With BITE, transactions are protected from these vulnerabilities, allowing for a fairer in-game experience. The protocol enables developers to design games where actions are processed without the risk of being manipulated by bots or other players with advanced capabilities. This approach supports more secure and reliable execution of game mechanics and may encourage greater adoption of web3 gaming by offering a more level playing field.

Skale Labs Introduces BITE Protocol

A Broader Approach to MEV Mitigation

The launch of BITE reflects a broader movement within the blockchain sector to develop solutions that address systemic transaction manipulation without introducing trade-offs in decentralization or performance. By embedding encryption at the consensus layer, BITE presents an infrastructure-level response to MEV that could influence other use cases beyond gaming and DeFi. Skale Labs’ initiative signals a continued focus on creating blockchain environments that prioritize fairness and transparency. As MEV remains a critical issue in the blockchain space, innovations like BITE may play a central role in shaping future protocol designs.