Research Summary: An Empirical Study on Ethereum Private Transactions and the Security Implications


  • Private transactions, a special type of transaction that are sent directly to
    miners, have a high probability of being packed to the front positions of a
    block and added to the blockchain.
  • To paint a complete picture of private transactions, we take the first step
    towards investigating the private transactions on Ethereum.
  • In particular, we collect large-scale private transaction datasets and perform analysis on their characteristics, transaction costs, and miner profits, as well as security impacts.
  • This work provides deep insights into different aspects of private transactions.

Core Research Question

Although the original intention of inventing private transactions is to protect users from attacks, how they are actually used in reality is still an open question. Specifically, what are the security impacts behind private transactions?


Lyu, X., Zhang, M., Zhang, X., Niu, J., Zhang, Y., & Lin, Z. (2022). An Empirical Study on Ethereum Private Transactions and the Security Implications. arXiv preprint arXiv:2208.02858.


  • ERC20 tokens: Ethereum Request for Comments 20 (ERC20) is a token
    standard for fungible tokens, which is the second most popular token type in
    Ethereum, in addition to ETH.
  • Stablecoin: Stablecoins are implemented based on the ERC20 token
    standards to ensure the price stability. For example, Tether (USDT) [70] is a
    stablecoin with a price pegged to 1 USD.
  • Gas and fees: To pay for the computational resources to execute a
    transaction, every transaction is required to pay a fee that is decided by both
    the gas and the gas price. Specifically, the transaction fee is calculated as:
    TxFee = UsedGas Ă— GasPrice, where UsedGas refers to the gas amount used for executing a transaction and GasPrice is the amount that the user would like to pay per unit of gas.
  • EIP-1559: EIP-1559 is a proposal requiring transactions to pay both the base fee and the priority fee as the total gasprice. Before EIP-1559, there is no limitation on the gasprice. Users can set zero to the gasprice of their transactions.
    However, after the EIP-1559 taking effects, the gasprice is required to be equal or higher than the basefee of the mined blocks. In particular, basefee is the minimum gasprice for mined transactions.
  • MEV: Although MEV is called miner extractable value, it is usually users,
    instead of miners, that search for MEV opportunities and share the earned
    profits with miners.


  • In this paper, we make the first step towards understanding private transactions and their impacts on the Ethereum ecosystem.
  • Specifically, we conduct a large-scale empirical study on private transactions from three different dimensions.
  • First, we describe the general statistics of private transactions by measuring
    their categories classified by their purposes, the involved DeFi tokens and
    platforms, and the involved entities.
  • Second, we analyze the transaction cost including used gas and gas price, and measure the miner profits in terms of the distribution, detailed income, and flows.
  • Third, we present the measured results to quantify the related security issues, including MEV, real-world DeFi attacks, consensus security, and private transactions leakage. Moreover, we perform detection on private transactions to study arbitrage, which is one popular type of MEVs.


  • We collect transaction-related information from customized Ethereum nodes, and we retrieve public data from Etherscan, TradingView. In total, we collect four datasets for our analysis, containing transaction data from May 1, 2021 to April 30, 2022 (one year) and mempool observation data from May 22, 2022 to May 30, 2022 (nine days).
  • For the one-year replayed transaction dataset, we collect the necessary
    transaction and block information from our customized Geth node in full mode, which is an official Ethereum client implemented in Go language. Specifically, we replay every transaction to extract information and construct our one-year dataset, which contains 446,925,956 transactions in total.
  • For the nine-day mempool transaction dataset, we deploy two modified Ethereum nodes in two continents from May 22, 2022, to May 30, 2022 (nine days) and collect the received transactions from the local mempool. Specifically, we customized the Geth node to log the hash, block number, timestamp of transactions observed from the mempool of the two nodes. We obtained 6,720,710 transactions from Node 1 and 7,854,054 transactions from Node 2 during the nine days.
  • For the private transaction label dataset, we obtain the private transactions within both the one-year dataset and the nine-day dataset by crawling Etherscan Label Cloud. Specifically, we observe 7,405,835 private transactions.
  • For the smart contract label dataset, for each address in our one-year dataset, we check whether they belong to these labels: Miner, MEVBot, DeFi, and Token. If so, we collect the corresponding information.
  • Based on these large-scale datasets, we perform a detailed analysis of the basic characteristics of private transactions, and their impacts on economics as well as on security.


  • We study the characteristics of private transactions. We find that during the last year, the percentage of private transactions per month is increasing and rises to about 2% of the total transaction volume. We categorize the purpose of private transactions. Although private transactions were proposed to protect end users from attacks, we find that only 18.1% of them were used for that purpose, whereas 28.6% of them are actually related to MEV Bots. Besides, five of the top ten receivers of private transactions are MEV Bots.
  • We study how private transactions affect the transaction fees and miner profits. We find that the gas used for private transactions is about 737,829 on average, which is much smaller than the average gas used (16,673,757) of normal transactions. We also investigate the impact of EIP-1559 on private transactions.
  • We find that around 50% of private transactions set the gas price at zero before EIP-1559; after EIP-1559, since basefees are mandatory, there are around 22% private transactions setting the priority fee to zero. The revenue of private transactions is an integral part of miner profits, accounting for around 5% of the total revenue.
  • We study security issues related to private transactions, including MEV, attack case studies, consensus security, and leakage of private transactions. We find that 2.6% private transactions senders earned more than ten ETH as profits via MEV Bots. Attackers have already utilized private transactions to launch attacks; in these attacks, the attackers paid a large amount to the miner as a bribe to get their transactions executed. According to our evaluation, the miner earned as high as 700 ETH for mining a single private transaction. This can lead to serious consensus security issues, such as the undercutting attacks.
  • We also find that private transactions are not always private. By running two
    Ethereum nodes in two continents for nine days, we have observed 4.3% private transactions in our mempool, which means that they are actually not private.

Discussion and Key Takeaways

  • We conduct a large-scale empirical study on private transactions from three
    different dimensions: 1) the basic characteristics of private transactions, 2) their economic impacts on Ethereum such as transaction cost and miner profits of private transactions, and 3) their security implications such as the real-world attacks hidden in private transactions.
  • Our work sheds light on the private transaction ecosystem and calls for more actions to protect users from private transactions.

Implications and Follow-Ups

  • As displayed in our paper, there is private transaction leakage at around 4.3% percentage. The leaked private transactions are against their intentions and may harm the profits of their users. It might bring some interesting insights to measure how they are leaked.
  • In this paper, we only perform analysis on arbitrage in private transactions. It would be interesting to measure other attacks such as sandwich attacks and flashloan attacks in the private transaction pool.
  • Our work was finished before the Ethereum 2.0 upgrade, which moved PoW to PoS and replaced miners with validators. The impact of private transactions on Ethereum 2.0 is worth investigating, and Ethereum 2.0 will also affect the private transactions.
  • We only investigated private transactions in Ethereum. Similar to Ethereum,
    Binance Smart Chain (BSC) is built based on Ethereum Virtual Machine (EVM) and smart contracts. We believe that there is more to observe and examine in such blockchains about MEV and private transactions.


  • This work provides deep insights on different aspects of private transactions, including their characteristics, transaction costs, and miner profits, as well as security impact. We believe the community will have a much better understanding of the private transactions with our work.
  • Moreover, our work exposes security impacts brought by private transactions. We present the linkages between private transactions and MEV, real-world attacks, and consensus security attacks. We also reveal the leakage of private transactions could harm users.
  • Last but not least, we provide a systematic method to collect datasets for private transactions. We will also open-source all the datasets used in our paper, to benefit the community and future research.

This is a great summary @MiaZmy.

Through your detailed analytical summary, one can deduce that most private transactions are not actually private, hence, does not protect users from attacks.

Also, miners leverage on high earnings to execute the functions of attackers, thereby creating serious security issues.

This leaves miners culpable in permitting attacks to private transactions.

However, is there no measure put in place in checkmating the activities of these miners executing private transactions?

PS: I don’t know if am still in track, but is there no way transactions can be traced to a miner?


Good job on your summary. Your ability to clearly explain your summary was truly enlightening.really finds it helpful.

1 Like

@MiaZmy I applaud your writing, and all I could say was amazing. I went farther in describing the security impacts of private transactions.

When it comes to private transactions, there are a few important security implications to take into account.

First of all, private transactions are tougher to track than public ones, which may make it more challenging to apprehend criminals or locate stolen money.

Second, private transactions could be used to finance illegal operations or launder money.

Finally, if confidential transaction information is disclosed, it may be utilized to blackmail or take advantage of people or companies.

The following are other major impacts of private transactions on security:

the loss of public auditability and transaction visibility, which might make it more challenging to detect and stop fraud.
the increased possibility of double spending, which might result in losses for both firms and people financially.
the potential for lower security in the event that private transaction data is leaked or stolen, as doing so would make it simpler for criminals to engage in money laundering or other illegal behavior.

I hope this is helpful and that I didn’t bore you.


The focus of the post: “An Empirical Study on Ethereum Private Transactions and the Security Implications” is to investigate how private transactions impact the Ethereum ecosystem and the security implications.

However, I want to highlight some aspects of private transactions in their basic terms in this post.

Private Blockchain

In private blockchains, access to the network is restricted to a predetermined group of users. If mining is possible on the network, the fact that it is private might allow administrators to choose which users are allowed to run the consensus process that determines mining rights and rewards.

In addition, the shared ledger could only be maintained by a small group of users. The owner or operator of the blockchain has the authority to override, alter, or remove any necessary entries whenever it is necessary or whenever they deem it appropriate.

We all can relate to the fact that Ethereum is a decentralized public blockchain that can be used to build decentralized applications. This has particularly made it very popular. It was launched in 2015 by Vitalik Buterin, a cryptocurrency researcher and programmer.

Ethereum private transactions are secure transactions that are processed on a private or permissioned version of the Ethereum blockchain. This entails that they are administratively permissive.

Another interesting thing is that these transactions are not visible to the public, which means they cannot be traced and don’t affect the price of Ether tokens (ETH).

Private transactions can be used for a huge spectrum of business processes…

  • financial institutions,

  • healthcare organizations,

  • governments with sensitive data to protect

Ethereum Private Transaction

Ethereum Private Transaction is a type of transaction in which the amount and the sender are hidden. It also hides the recipient.

It’s important to note that there are two types of transactions: public and private. Public transactions can be seen by anyone on the blockchain while private transactions can only be seen by those who have permission to see them.

Why do Private Transactions Matters?

The increasing number of people who are using cryptocurrencies and the increase in the number of transactions that need to be verified has led to a problem.

The transaction speed has slowed down considerably and this has created huge concerns in the ecosystem.

The good thing is that private transactions can curb these concerns depending on the implementation.

Private transactions have been introduced as one of the solutions to this because they allow for faster transaction speeds. They can also implement privacy by the use of: Zero Knowledge-based and Mixers

Zero Knowledge-based

In order to send a private transaction on the Ethereum blockchain, one needs to use zk-SNARKs which are a form of zero-knowledge cryptography, which allows the sender and receiver of the transaction to know what was sent but not who it was sent by or who it was sent to.

The zk-SNARKs are a mechanism for transactions to remain private and completely encrypted on the blockchain, while still being confirmed according to the network’s consensus rules.

It may be used to prove that the sender is in possession of the cash they want to transmit without making this information public. This ensures complete privacy for all transactions on the blockchain.


Mixers on the other hand, provide certain benefits for privacy, but they also help to obscure the data by frequently making it difficult (or even empirically impossible) to correlate the information accurately. This can have a positive impact on the protection of personal information.

Something about centralization

Interestingly, private blockchains are somewhat centralized. It’s a closed database distributed ledger protected by cryptography and the organization’s demands.

It runs a complete node, performs transactions, or validate/authenticate blockchain modifications only with authorization.

Finally, private blockchains stress speed and immutability, increasing the efficiency of transactions per second, and reducing the power consumption needed for mining based on the consensus algorithm implemented.


Private transactions have a high probability of being packed to the front positions of a block and being added to the blockchain by the target miner, without going through the public mempool, thus reducing the risk of being attacked by malicious entities .

Why is Ethereum being used for private blockchain?

image depicting the impact of private transactions on the Ethereum ecosystem and the security implications.

Instead of the public Ethereum network, you can create a “private” Ethereum network that can be used to make transactions and build smart contracts without requiring real Ether. A private network is the best way to learn about blockchain concepts without using real money.

How secure are private blockchains?
They are instead built to accomplish specific tasks and functions. In this respect, private blockchains are susceptible to data breaches and other security threats. This is because there is generally a limited number of validators used to reach a consensus about transactions and data if there is a consensus mechanism


The research paper makes it clear that although private transactions were created with good intentions, attackers have also used them to launch attacks due to their stealthiness, which has a negative impact on the Ethereum ecosystem. Since private transactions are only briefly discussed in existing works when analyzing MEV, a thorough investigation of them is still lacking. The author did a good job of bridging this gap and giving a thorough overview of Ethereum’s private transactions with their analysis that concentrated on the characteristics, transaction costs, miner profits, and security impacts of large-scale private transaction datasets.

Well done on a fantastic summary @MiaZmy


I haven’t figured out an effective method to collect miner activities, which are mainly kept to miners themselves and not traceable.

1 Like

Thanks for the comments. :grinning:


Thank you! :star_struck:

1 Like

Wow, this is really useful. Btw, could you explain more about the “the increased possibility of double spending”? I though private transactions do not have such risks previously.

1 Like

Thanks for the comments. I would like to mention that “private transactions” in our paper are different from “Ethereum Private Transaction” mentioned here. Private transactions in our paper are still public to anyone once they are mined to blockchain, but they are only visible to miners in the pending phase, not anyone.


Thanks for your comments.


You’re welcome @MiaZmy

1 Like

@MiaZmy nice summary …
but I would like to talk more to this ……
By dispersing the in-network coin, crypto-transaction networks encourage participation (especially early adoption).

There is no functional reason why a nation state couldn’t offer a cryptocurrency version of their own currency and, at the same time, set up a sizable number of nodes to process the blocks without any mining fees. It would be difficult to gain adoption otherwise. It might even be planned so that only specific kinds of “authorized nodes” can handle processing it.

That might allow you to operate the network for free or with only a few small fees to keep spam at bay. A sizable bank might also implement something similar.

The “smart contracts” feature that everyone is talking about in relation to the blockchain may be a more compelling use case for this technology.

Fundamentally, this feature set does not require a currency other than to encourage network activity, but it does require a trustworthy open ledger.


Hello @MiaZmy .That was was a nice summary, I think the scope of private transactions goes beyond MEVs. Well, a complete view of
private transactions such as their characteristics and impacts on the Ethereum ecosystem remains unclear. One good thing about this private transaction is that it uses less gas and bring huge profits to miners. I am also aware that the original intention of inventing private transactions is to protect users from attacks, how they are actually used in reality is still an
open questions maybe because Private transactions are still very new and have not received much attention in the research community. The problem private transactions Is that it has the chance of being leaked to the public mempool. I think there is the need to protect users from private transaction.


Hi @MiaZmy, you did a great job, and again, it is an interesting topic.

About this, what can you say would have been the cause of this increase? Are users finding private transactions attractive.

Again, I’m curious, how about the rest of the percentage of private transactions? How did you classify it?

Considering the high gas fees in Ethereum, this looks like good news.


Having read through the comments on this summary, it seems there is a misconception of private transactions. Let me offer my two cents on private transactions.

Before that, @MiaZmy, this is a thorough work considering the volume of data sample and time interval in which you gathered it.

This research work is based on Ethereum’s Proof of Work (PoW) consensus algorithm.
To better understand private transactions in Ethereum, we need to understand normal transactions.

For normal transactions, in a PoW blockchain, all “incoming” transactions to the blockchain are held in a Memorypool (Mempool) before they are selected and added to blocks by miners. Someone likened the Mempool to a doctor’s waiting room.

Transactions in a Mempool are open for the public to see. This can expose pending transactions to sandwich attacks.

But in private transactions, these incoming transactions do not need to enter the Mempool, hence exposing them to sandwich attacks. They are forwarded directly to the miners who add them to blocks.

I hope this helps.


Indeed, there is another notion of private transaction, which means a transaction that utilizes zk-SNARK to hide some information (e.g., sender).

In this summary, it might be better to call it direct transaction, since the transaction is sent to the miner directly, without going through the mempool.

This seems like an important point to figure out. One of the obstacles in advancing web3 is that sometimes research and builders user terms differently and that results misunderstandings and blockages to knowledge exchange. This idea of what is intended by private transaction seems to potentially be one of those instances. Depending on which definition people are using would significantly impact how one reads this summary and tries to analyze the phenomenon. We are building a glossary to try to help with this situation, so it might be valuable if some sources of definitions were found and proposed in the SCRF Terms Glossary and Content Tag thread. It might seem a small thing, but having discussions about definitions is incredibly valuable for just these situations.


Nice work @MiaZmy very detailed…
Of course private transactions were designed with good intents in mind, the research report makes it obvious that because of their stealthiness, attackers have also utilized them to launch assaults, which has a detrimental effect on the Ethereum ecosystem. A full analysis of private transactions is still absent because of some certain things. With their analysis that was focused on the traits, transaction costs, miner profits, and security consequences of large-scale private transaction datasets, a fantastic work flling this gap and providing a detailed work of Ethereum’s private transactions.