Every year, blockchain users lose billions to MEV (Maximal Extractable Value) exploitation. Neo X is now putting an end to it.

MEV refers to the unfair advantage where miners, validators, or bots censor, insert, and re-order transactions to maximize their profits—undermining the fairness and security of blockchain networks. Neo, committed to building an open network for the Smart Economy, has now reached a major milestone: the launch of the anti-MEV feature on Neo X TestNet.

The upgrade was enabled at block height 2,088,000, introducing the anti-MEV and threshold signature functionalities.

Eliminating MEV opportunities by enveloping the transactions 

From the inception of Neo X, we understood that a significant portion of MEV attacks come from miners and validators who manipulate transaction ordering for profit. Our solution can be summed up in one word: blind. By blinding validators, we eliminate their ability to exploit transactions.

Neo X adopts a technique called Enveloped Transactions to achieve this:

1. Transactions are enveloped (encrypted) before reaching the consensus nodes, preventing consensus nodes and searchers from identifying potential profit opportunities.

2. Consensus nodes will process all ‘envelopes' equally, and treat them the same as the unenveloped ordinary transactions before packaging them into a block.

3. Once the order is finalized, threshold decryption is applied, requiring at least two-thirds (⅔) of consensus nodes to collaboratively decrypt the transactions and finalize the block.

*Technically, the requirement is ⅔N+1 consensus nodes, where N is the total number of consensus nodes. But for simplicity, it can be understood as ⅔.

Distributed Key Generation (DKG) is used to securely set up the private keys needed for threshold decryption and threshold signature.

For a detailed breakdown of the anti-MEV mechanism, read Neo Founder Da Hongfei’s article: “How Neo Eliminates Toxic MEV.”

Calling Developers!

Interested in testing this feature or building dApps that fight MEV exploitation? Here’s how to get started:

📚 Developer Docs: https://xdocs.ngd.network/security/anti-mev-protection

💬 Join the Neo Developer Community on Discord for real-time support.

Threshold Signatures

Previously, reorganization (reorg) issues required a one-block delay for block hash finality, affecting indexing services like the multi-signature wallet XSig on Neo X. With this upgrade and the adaptation of threshold block signatures, we’ve achieved single-block hash finality—eliminating reorgs on Neo X and enhancing both security and usability.

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Thank you for patiently waiting as we refine Neo X into its best version. More security improvements and upgrades are on the way before the MainNet launch. Stay tuned!