The proposed system functions by allowing users to submit encrypted transactions, which validators then sequence without sight of the underlying order details. According to a research paper authored by Rex Fernando, Guru-Vamsi Policharla, Andrei Tonkikh, and Zhuolun Xiang, this design integrates directly into the network's Byzantine fault-tolerant consensus protocol. Testing indicates this added layer of confidentiality introduces approximately 27 milliseconds of latency, representing a 14% increase over the current baseline performance.
In section Cryptocurrency
Aptos Labs Targets Frontrunning with Encrypted Mempool Proposal
Aptos Labs is pushing to neutralize frontrunning and MEV exploitation by introducing a native encrypted mempool. If the governance proposal clears, the layer-1 network would hide trade instructions from validators until the ordering phase concludes, potentially shielding users from predatory trading practices while maintaining on-chain transparency for finalized transactions.

To manage the computational load, validators share decryption keys during each epoch, utilizing batched processing to ensure efficiency. This initiative aligns with Aptos Foundation's broader $50 million investment strategy aimed at bolstering trading infrastructure and AI-driven applications. Among the primary beneficiaries is the on-chain order book Decibel, which has already processed over $1 billion in volume. As the network expands its institutional footprint—supported by tokenization integrations from firms like DigiShares—the encrypted mempool represents a critical step toward providing the privacy guarantees required by professional traders.
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