With increasing interest in effective methods to scale and secure blockchains, hardware-based solutions are now in the spotlight. The application of Trusted Execution Environments (TEEs) in blockchain systems has broadened from mere privacy-preserving initiatives to those enhancing scalability and facilitating secure off-chain computations. Presently, more than 50 teams are engaged in TEE-based blockchain projects. This article by Cointelegraph Research delves into the technical aspects of TEEs in blockchain systems and explores significant use cases of this technology.
Mechanics of TEEs in blockchains
Blockchain technology predominantly relies on cryptography and distributed computing to ensure security. TEEs introduce a distinct layer of hardware-level trust.
A Trusted Execution Environment is an isolated segment within a device’s processor, specifically designed to maintain data and code integrity and confidentiality during execution. The resulting secure enclave remains hidden from the operating system and can demonstrate to third parties via remote attestation the specific operations it is performing.
To facilitate this, the CPU assesses the Trusted Computing Base, which encompasses the boot firmware, operating system kernel, and application binaries, storing these measurements in secure hardware registers. It then signs this assessment using a private attestation key embedded within the CPU, yielding a cryptographic attestation report that a remote verifier can use to validate the enclave’s authenticity and integrity.
Utilizing this hardware-level trust for confidential smart contract execution mandates that blockchain nodes employ chips equipped with a TEE. This requirement mainly pertains to nodes responsible for transaction and block validation, along with off-chain computations. In a layer-1 framework, consensus nodes replicate an encrypted version of each contract’s state as part of the global ledger.
Each node hosts a TEE to replicate the decryption, plaintext execution, and reencryption of every transaction. This dependence on hardware introduces a compromise between improved privacy and a reduced validator set. If specific hardware is mandatory, fewer individuals can operate nodes. However, the additional trust this entails is, to some extent, balanced by the remote attestation capabilities of TEEs.
An alternative approach is a layer-2 design where TEE computations are secured not by distributed consensus, but through a dispute resolution system, as demonstrated in rollups. This design mirrors the encryption process of an L1 setup but can enhance scalability. Nonetheless, many layer-2 systems sacrifice contract interoperability since they are executed on distinct machines, preventing contracts from interacting with one another.
TEEs employ standard asymmetric cryptography to obscure function calls and smart contract code. Function calls are encrypted using the TEE’s public key prior to submission to the blockchain, decrypted within the enclave, and executed.
Secret Network, developed with the Cosmos SDK and Intel SGX, was the pioneering blockchain to implement private smart contracts enabled by TEEs. Secret Contracts permit developers to create confidential DeFi applications, obfuscating contract logic, inputs, outputs, and state, though not the addresses. Additionally, this allows for the generation of Secret Tokens, with balances and transaction history remaining confidential and visible solely to their owners or explicitly authorized smart contracts.
Vulnerabilities of trusted execution environments
The reliability of private smart contract execution hinges on the integrity of the TEE hardware manufacturer. While it’s unlikely that a reputable corporation like Intel would risk its reputation through a targeted assault on blockchain systems, Intel’s Management Engine (IME), an autonomous system integrated into most Intel CPUs since 2008, has revealed multiple critical vulnerabilities throughout the years.
TEE manufacturers may come under governmental pressure to embed backdoors, adhere to surveillance regulations, or grant access to encrypted data under national security directives. Accidental vulnerabilities could also compromise TEE security. For instance, the Plundervolt attack capitalized on Intel’s dynamic voltage interface to induce computation faults within SGX enclaves, enabling attackers to circumvent integrity checks and extract keys and secrets from encrypted memory.
Private smart contract execution with TEEs
To facilitate privacy-preserving DApps, smart contracts must be executed in a manner that keeps both logic and data confidential. TEEs can access the keys necessary to decrypt contract data to read and run private smart contract code.
If these keys are ever compromised, an attacker could decrypt previously stored contract data. To mitigate this risk, Trusted Execution Environments utilize distributed key management, which divides key control among multiple trusted nodes and frequently rotates short-term keys to minimize the impact of any breach.
Ekiden was the first to devise such a system, laying the groundwork for similar models across other blockchains. The most critical keys are overseen by the Key Management Committee (KMC), a group of the most reliable nodes, employing threshold cryptography. Shares of the committee are proactively reshared to alter ownership of each share. In contrast, individual worker nodes hold restricted-access short-lived keys linked to particular tasks.
These keys are issued by the KMC for each contract and expire at the conclusion of every epoch. To acquire a key, a worker node must first authenticate its legitimacy to the KMC through secure channels. Each KMC member subsequently generates a key share using a pseudo-random function and transmits it to the node, which reconstructs the full key once a sufficient number of shares have been collected.
If a KMC node is compromised, its access can be revoked through governance, excluding it from future epochs. This approach mitigates the potential repercussions of a breach, although it does not entirely eliminate risk. When a confidential contract is implemented, its enclave generates a new public key and publishes it on the blockchain, alongside the contract code and encrypted initial state.
Subsequent users calling the contract retrieve this key to encrypt their inputs before submitting them to the compute node. To ensure authenticity, the node also presents a signing key tied to the enclave through attestation when it initializes.
Other use cases of TEEs in blockchains
In addition to private smart contract execution, TEEs can greatly enhance blockchain scalability and efficiency. TEE-enabled nodes can securely perform computationally demanding tasks off-chain and submit the results on-chain. Consequently, applications can offload computational burdens from the blockchain layer to the trusted off-chain environment. This can help lower gas costs and boost the overall throughput of the chain.
IExec ranks among the leading decentralized cloud computing platforms utilizing Trusted Execution Environments for off-chain computations. It employs Intel SGX-based enclaves to offload and isolate computations from the blockchain.
A requester, typically a smart contract or user, can order a confidential computation as a task on-chain. The blockchain then alerts worker nodes to carry out the task within a secure enclave. Prior to executing, the enclave generates an attestation report containing cryptographic proof of the enclave’s code and configuration.
This report is sent to a Secret Management Service, which verifies the integrity and authenticity of the enclave. Only if the enclave successfully passes this verification does the actual computation commence.
Trusted execution environments may also be employed to create an MEV-proof blockchain infrastructure. Unichain, an optimistic rollup on Ethereum developed by the Uniswap team and launched in October 2024, utilizes TEEs during its block-generation process. Its block builder, developed in collaboration with Flashbots, leverages TEEs to build blocks within a secure enclave.
When routed to the TEE builder, transactions are filtered, priority-ordered, and bundled into Flashblocks. This enables Unichain to achieve 1-second block times, with ambitious plans to introduce 250-millisecond sub-blocks and enhance transaction ordering. Constructing blocks within TEEs helps diminish MEV extraction as mempool transactions remain encrypted. With these capabilities, Unichain aspires to create a dedicated blockchain for DeFi.
Conclusion
Trusted execution environments on blockchains are gaining traction as developers search for more efficient privacy solutions. TEEs have the capacity to influence the future of decentralized applications through low-cost and high-latency secure computation. Nevertheless, TEEs are not yet inherently supported by most blockchains due to hardware prerequisites and trust assumptions.
In the future, we anticipate the expansion of TEE use cases beyond privacy-preserving applications, increasingly focusing on scalability solutions for blockchains and off-chain computations for decentralized applications. This transition is propelled by the emergence of more computationally intensive DApps, such as decentralized AI applications. TEEs could facilitate these applications with low-cost, high-performance off-chain computations.
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