In the stock market, a broker who takes a peek at a client’s order, buys first and sells back at a markup is breaking the rules. In crypto, it is a fairly regular occurrence.
When someone buys crypto, the order sits in a public waiting line for a few seconds before it goes through. Trading bots watch that line, jump ahead of large orders, and sell back at a higher price. Most buyers never notice, and end up paying a little more.
What Aptos just changed
On Oct. 12, the Aptos blockchain switched on a feature called encrypted mempool. In simple terms, it seals an order before it joins the waiting line.
The user’s wallet locks the order details on their own device before sending them. The network puts orders in sequence while hiding them from public viewing, and only unlocks them once that sequence is final.
No single party opens the order early. The key is split among the many operators who run the Aptos network, and most of them would have to cooperate to unlock them.
Since the operators already run the network, users aren’t trusting anyone new. Aptos says it’s the first major blockchain to build this protection in from the ground up.
The extra step adds about 20 milliseconds, a delay too short to notice. Security firm zkSecurity has reviewed the code.
The new feature is optional, and chosen one trade at a time.
The Petra wallet offers it when a trade is confirmed, and Decibel, a trading platform built on Aptos, plans to use it to keep orders hidden until they go through.
Popular on TheStreet Roundtable: What the feature doesn’t do
The new feature has limits. The account address and fee stay visible, and the full trade details are published once it’s done. The goal is to hide an order only until it’s too late to trade against it.
It protects only trades that users choose to seal, and only on Aptos. It still depends on most of the network’s nodes playing fair, the same assumption the whole network already rests on. The real test will come with heavy everyday trading.
How Aptos update is different
Though other networks have also tried to solve the same problem, most do it by bringing in a middleman. On Ethereum, services such as Flashbots Protect send orders privately to the parties that put together each batch of trades.
Other networks rely on special security chips, or an outside group that holds the keys to orders. These keep orders away from the bots, but traders have to trust someone new to see or guard them.