Ethereum bots are burning over 50% of gas fees so ETH strangely needs privacy tech to fix it at scale

The urgency for privacy on Ethereum has shifted from anonymity to solving critical economic and scaling issues, primarily driven by Maximal Extractable Value (MEV) bots. These bots, fueled by public transaction data visible in the mempool, are consuming over 50% of gas fees on some Layer 2s while paying little, creating a market fairness problem. Experts highlight that this extraction, which includes sandwich attacks and strategy leakage, costs users hundreds of millions annually. The Ethereum Foundation's privacy roadmap focuses on three areas: private writes (hiding transaction intent), private reads (hiding balances and positions), and private proving. While private writes are receiving attention, some experts argue that private reads—exposing state information—are the current major hemorrhage powering MEV. Solutions being developed include encrypted mempools, stealth addresses (ERC-5564), and confidential execution environments like Trusted Execution Environments (TEEs) that encrypt state while in use. Although zero-knowledge proving costs have significantly dropped, the main bottlenecks are now coordination, developer user experience (UX), and integrating privacy features as defaults rather than opt-in choices. Ultimately, the adoption of privacy technology is becoming essential infrastructure to mitigate quantifiable losses and enable institutional DeFi adoption.

(Source：CryptoSlate)