Shutter API Glossary
This glossary provides definitions of key terms related to the Shutter API and the Shutter threshold encryption protocol. These concepts are essential for understanding how Shutter enables fair, private, and trust-minimized interactions in decentralized applications (dApps).
Threshold Encryption
A cryptographic method where a decryption key is split among multiple parties, requiring a minimum threshold of them to collaborate before decryption is possible. This ensures that no single entity has unilateral control over the encrypted data, improving security and reducing trust assumptions.
Commit-and-Reveal Scheme
A cryptographic mechanism where a user first commits to an action (e.g., submitting an encrypted bid or move) and later reveals it when predefined conditions are met. This prevents premature disclosure of sensitive information, ensuring fairness in scenarios like auctions, governance, and gaming.
Keypers
A decentralized network of independent node operators that collaboratively generate encryption keys, manage decryption key fragments, and release the final decryption key once a commitment condition is satisfied. Keypers ensure that no single party has unilateral control over decryption.
Distributed Key Generation (DKG)
A cryptographic protocol that allows a group of Keypers to collaboratively generate an encryption keypair without any single participant knowing the full private key. This ensures that decryption is threshold-based, meaning multiple Keypers must cooperate before a decryption key is released.
Sealed-Bid Auction
A type of auction where bids remain encrypted until the auction period ends, ensuring that no participant—including the auctioneer—can see other bids before submission deadlines. This prevents bid sniping, collusion, and unfair price discovery.
Shielded Voting
A voting mechanism where votes remain private until the voting period ends. This prevents vote manipulation, undue influence, and strategic voting based on early results. Shutter API enables cryptographic fairness in decentralized governance by ensuring that all votes are revealed simultaneously.
MEV (Maximal Extractable Value)
The process of reordering, inserting, or censoring transactions in a blockchain’s mempool for profit. Malicious MEV tactics such as front-running and sandwich attacks allow privileged actors to exploit users. Shutter API mitigates MEV risks by keeping transaction details encrypted until execution.
Time-Locked Encryption
A method where encrypted data can only be decrypted after a specified time or event. This is useful for applications such as sealed-bid auctions, governance voting, gaming, and MEV protection, where information must remain private until a fair reveal moment.
Multiparty Computation (MPC)
A cryptographic method allowing multiple participants to collectively compute a function without revealing their private inputs. Threshold encryption, as used in Shutter, is a specialized form of MPC.
Shutter API
A developer-friendly API that provides easy access to Shutter's threshold encryption network, enabling commit-and-reveal workflows for dApps in governance, gaming, finance, and auctions. Unlike previous Shutter implementations that required protocol-level integration, Shutter API is application-layer focused, allowing any dApp to integrate encryption permissionlessly.
Shutter SDK
A TypeScript library that simplifies local encryption and decryption using Shutter's threshold encryption scheme. The SDK provides developers with an easy way to encrypt commitments, retrieve decryption keys, and integrate privacy features into their dApps.
Encrypted Mempool
A blockchain mempool where pending transactions remain encrypted until validators commit to their inclusion. This prevents MEV attacks like front-running and sandwiching, ensuring fair transaction execution. Shutter has implemented an encrypted mempool on Gnosis Chain, with future expansion plans for Ethereum and Layer 2 rollups.
The Free Option Problem
A situation where one party in an agreement can change their decision after seeing new information, creating an unfair advantage. For example, in an auction, a bidder could submit multiple bids, observe competitors' bids, and withdraw unfavorable ones. Shutter API prevents this by sealing commitments until the reveal phase, ensuring fair participation.
Parimutuel Betting
A betting model where wagers are pooled together, and the final odds are determined based on all bets. Shutter API ensures fairness by encrypting bets until the pool closes, preventing strategic last-minute wagers that manipulate the odds.
Smart Account Encryption
Smart accounts (e.g., those enabled by ERC-4337 account abstraction) lack built-in encryption, making it impossible for them to access encrypted data. Shutter enables smart accounts to securely decrypt and access private data when triggered by a predefined event—useful for secure file storage (e.g., Fileverse) or private smart contract interactions.
Simultaneous Move Games
Games that require players to submit actions without seeing their opponents’ choices. Shutter API enables encrypted move submissions, ensuring fairness in games like poker, Rock Paper Scissors, and strategy-based multiplayer games.
Trusted Execution Environment (TEE)
A hardware-based solution that provides a secure enclave for running private computations. Unlike TEEs, Shutter's threshold encryption approach does not require trusting a centralized hardware manufacturer or relying on a single point of failure.
Event-Based Encryption Triggers
Shutter API allows encryption to be triggered by predefined events, such as all players submitting moves in a game, rather than just time-based triggers. This ensures that decryption happens only when all conditions are met.
Programmable Privacy
A vision for Ethereum where privacy settings can be configured at the user or application level. Shutter plays a key role in this landscape by providing threshold encryption that enables temporary privacy for applications such as DeFi, governance, and gaming.
Fair Price Discovery
A mechanism ensuring that financial markets and auctions reflect true supply and demand without manipulation. By encrypting bids and transactions, Shutter API eliminates price manipulation, order flow leaks, and bid front-running, creating a more trustworthy and open market.
Sealed RFPs (Request for Proposals)
In corporate procurement, businesses request bids for services or products. Shutter API allows RFP responses to be encrypted until the deadline, preventing competitors or procurement managers from seeing bids early and ensuring a fair selection process.
Encrypted Private Messaging
While not a direct feature of the Shutter API, the threshold encryption model could be extended to enable time-delayed, event-triggered, or role-based decryption in private communication systems.
This glossary will continue to expand as Shutter Network and Shutter API evolve to enable more use cases in privacy-preserving, decentralized applications.