Sparkpool's Taichi Network to Tackle Front Running in DeFi

Oct 1, 2020 at 18:59 UTC.Ethereum mining pool Sparkpool will launch its new mining network, Taichi Network, complete with a "Private transaction" feature in October, CoinDesk confirmed with Sparkpool co-founder Xin Xu.The network "Will gradually go online" this month in what could be one solution to decentralized finance's long-standing problem with front running, the practice of trading based on information about future trades contained in a blockchain's transaction queue in cryptocurrency markets.

"We will offer Taichi Network's features as infrastructure to the Ethereum [ecosystem], and we will see how the reaction works out then," he said.

Ethereum's transaction queue - called a mempool - is often alluded to as a "Dark forest" due to the predatory nature of arbitrage bots spying on transactions.

Private transaction networks like Taichi can cut a path through the trees, however.

The mining party, in this case Sparkpool, opts out of broadcasting the chosen transaction destined for its block to the rest of the network.

On the other hand, you are entrusting your transaction entirely to Sparkpool, meaning the mining giant could front run you itself more easily.

Xu said disrupting the current front-running issues plaguing DeFi transactions "Is definitely a direction worth exploring" with Taichi.

Certain aspects of Taichi Network are public, including a general domain registered in July 2020, according to WHOIS. The website remains under construction, but describes Taichi as a "Viable Proof-of-Stake Ethereum sidechain" complete with relayers and smart contract capabilities.

Relayers broadcast transactions faster than regular settlements on blockchains by constructing pathways between major nodes.

Sparkpool data website GasNow also includes information on Taichi, describing the network as "Greatly improving the efficiency of transactions broadcast" by "Directly pushing received transactions into a mempool of mining pools."