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Shutter API Use Cases

Overview​

The Shutter API provides developers with access to a threshold encryption service, enabling secure, fair, and private interactions in decentralized applications (dApps). By leveraging a distributed network of Keypers, the Shutter API ensures that sensitive data remains encrypted until a predefined time or event occurs.

This document explores the many ways developers can integrate the Shutter API into their applications, detailing both high-level use cases and the technical mechanisms that enable them.

Why Threshold Encryption?​

Decentralized applications often require privacy and fairness guarantees, but traditional blockchain environments expose all transactions and commitments publicly. This results in:

  • Information asymmetry – Some participants can see private information before others, leading to unfair advantages.
  • Hidden trust assumptions – Many dApps still rely on centralized servers or opaque processes to manage private data.
  • Manipulation risks – Without encryption, attackers can exploit transaction visibility for front-running, censorship, or selective reveals.

By using Shutter API, developers can remove these vulnerabilities and introduce trust-minimized encryption into their applications with minimal complexity.

Key Use Cases​

1. Shielded Trading – Preventing MEV & Front-Running​

Problem: In decentralized finance (DeFi), malicious actors monitor pending transactions in public mempools, allowing them to front-run users by inserting their own transactions first. This results in higher costs, price manipulation, and unfair markets.

Solution: Shutter API enables encrypted transaction submissions, ensuring that trade details remain hidden until execution. Traders can execute private limit orders, swaps, and liquidations without exposing sensitive information to bots or other traders.

Technical Flow:

  • The user encrypts their transaction data before submitting it.
  • The encrypted transaction is recorded on-chain or in a private order book.
  • Once confirmed, the decryption key is released, revealing and executing the transaction simultaneously for all users.

2. Shielded Voting – Preventing Manipulation in DAOs​

Problem: Most DAOs rely on open voting, where early votes can influence later participants, leading to coercion, vote buying, and governance manipulation.

Solution: With Shutter API, all votes remain encrypted until the voting period ends, ensuring that every participant’s decision remains private until the final reveal. This prevents strategic voting and maintains the integrity of decentralized governance.

Technical Flow:

  • A voter encrypts their vote before submitting it to the DAO’s smart contract.
  • The vote is stored on-chain, but remains unreadable.
  • Once the voting period closes, the decryption key is released and all votes are revealed at the same time.

3. Sealed-Bid Auctions – Preventing Bid Manipulation​

Problem: In traditional auctions, bid data is often visible before the auction ends. This allows auctioneers, insiders, or competitors to adjust their strategies unfairly, outbidding honest participants at the last moment.

Solution: Shutter API ensures that all bids remain completely private until the auction closes. Bidders can submit sealed bids without fear of being outmaneuvered by privileged actors.

Technical Flow:

  • A bidder encrypts their bid and submits it to the auction contract.
  • The bid is stored securely, but remains unreadable until the auction ends.
  • At the closing time, the decryption key is released, revealing all bids simultaneously and determining the winner fairly.

4. Fair On-Chain Gaming – Enforcing Simultaneous Move Revelation​

Problem: Many blockchain games involve hidden moves, secret actions, or randomness, but without encryption, these mechanics can be exploited by insiders or other players.

Solution: Shutter API ensures that game moves and actions remain encrypted until they should be revealed, preventing unfair advantages.

Example Applications:

  • Rock, Paper, Scissors – Players encrypt and submit their moves, ensuring neither can see the other's choice before committing.
  • Poker – Enforces forced reveals of cards at the appropriate moment, preventing selective disclosure or cheating.
  • Daoplomacy – A blockchain version of Diplomacy, where all strategic moves remain hidden until the reveal phase.
  • Werewolf/Mafia-style games – Keeps player roles and night actions secret until they are meant to be disclosed.

Technical Flow:

  • Players submit encrypted moves or actions.
  • The encrypted data is recorded on-chain or in a game state database.
  • At the designated time, the decryption key is released, revealing the results fairly.

5. Smart Accounts with Encrypted Data Access​

Problem: Smart accounts (such as Safe multisigs) improve security and usability, but they currently lack the ability to access encrypted data. Unlike EOAs, smart contracts cannot easily retrieve and decrypt sensitive information.

Solution: With Shutter API, smart accounts can be granted controlled access to encrypted documents, financial records, or private user data.

Example Application: Providing E2E encrypted access to a Fileverse document for a smart account.

Technical Flow:

  1. A user generates a key for their smart account wallet.
  2. They link a Shutter public key to their smart account.
  3. When the smart account requests access to encrypted data, an on-chain event triggers the Shutter Keypers to release a decryption key.
  4. The decryption key is encrypted for the requesting user, allowing them to decrypt the data in their browser.

This enables private document sharing, secure access controls, and confidential transaction data retrieval for smart accounts.

6. Solving the Free Option Problem in Auctions & Bidding​

Problem: In sealed-bid auctions, bidders can submit multiple bids, observe others' bids, and withdraw unfavorable ones. This exploit, known as the Free Option Problem, results in unfair competition.

Solution: Shutter API prevents this by locking bids until the reveal phase, ensuring every bid is final and no one can selectively withdraw after seeing competitors' offers.

Example: In an NFT auction, Shutter API ensures that all bids remain sealed until the auction ends, preventing last-minute withdrawals or bid manipulation.

7. Private Trading for MEV-Protected Order Books​

Problem: In DeFi, order book-based trading platforms often expose orders before execution, allowing market makers and bots to manipulate prices.

Solution: Shutter API keeps limit orders and trade intentions private until they execute, ensuring fair trading conditions.

Technical Flow:

  • Traders encrypt their limit orders before submission.
  • The encrypted orders are stored in the order book.
  • At execution, the decryption key is released, allowing orders to be matched fairly.

This approach can significantly reduce MEV attacks and improve price fairness in decentralized exchanges (DEXs).

Conclusion​

The Shutter API provides a powerful and flexible encryption layer for a wide variety of Web3 applications. By integrating threshold encryption, dApps can prevent manipulation, enhance fairness, and protect user data without requiring complex cryptographic knowledge.

Developers can start using the Shutter API today to improve trading security, enable fair governance, build trustless games, and implement confidential smart account interactions.

To learn more and start building, visit: Shutter API Documentation