In the Web3 era, TEE (Trusted Execution Environment) is becoming a key cornerstone for data security and privacy computing. From MEV protection to AI computing, from decentralized finance to DePIN ecology, TEE is building a safer and more efficient encryption world. This report will take you to explore this cutting-edge technology in depth and reveal how it will reshape the future of Web3.
Chapter 1: The rise of TEE - why is it the core puzzle of the Web3 era?
1.1 What is TEE?
Trusted Execution Environment (TEE) is a hardware-based secure execution environment that ensures that data is not tampered with, stolen, or leaked during the computing process. In modern computing systems, TEE provides additional security for sensitive data and computing by creating an isolated area independent of the operating system (OS) and applications.
Key Features of TEE
Isolation: TEE runs in a protected area of the CPU, isolated from the operating system, other applications, and external attackers. Even if hackers break into the main operating system, the data and code inside the TEE remain secure.
Integrity: TEE ensures that code and data cannot be tampered with during execution.
Through remote attestation, TEE can verify to the outside world that it is executing trusted code.
Confidentiality: Data inside TEE cannot be accessed externally, even by device manufacturers or cloud providers. The use of a sealed storage mechanism ensures that sensitive data remains secure even when the device is powered off.
1.2 Why does Web3 need TEE?
In the Web3 ecosystem, privacy computing, secure execution, and censorship resistance are core requirements, and TEE can provide this key capability. Currently, blockchain and decentralized applications (DApp) face the following problems:
1.2.1 Privacy issues on blockchain
Traditional blockchains (such as Bitcoin and Ethereum) are completely transparent, and all transactions and smart contract data can be viewed by anyone. This brings the following problems:
User privacy leakage: In DeFi transactions, NFT purchases, social applications and other scenarios, users capital flows and identities may be tracked.
Enterprise data leakage: Enterprises want to use blockchain technology, but sensitive data (such as business secrets and medical records) cannot be stored on the public chain.
TEE solution: Through the combination of TEE + smart contracts, developers can build private computing contracts, where only authorized users can access the calculation results, while the original data is hidden from the outside. Secret Network (a privacy smart contract platform based on TEE) has implemented this model, allowing developers to create DApps that protect user privacy.
1.2.2 MEV (Miner Extractable Value) Issue
MEV (Miner Extractable Value) refers to the arbitrage that miners or block producers use to exploit the transparency of transaction information when packaging transactions. For example: Front-running: miners or robots submit transactions in advance before user transactions to make profits. Sandwich Attack: attackers insert their own transactions before and after user transactions to manipulate prices for profits.
TEE solution: With TEE, transactions can be sequenced in a private environment, ensuring that miners cannot see transaction details in advance.
Flashbots is exploring the TEE+Fair Sequencing solution to reduce the impact of MEV on DeFi.
1.2.3 Web3 computing performance bottleneck
The computing power of public chains is limited, and on-chain computing is expensive and inefficient. For example, Ethereum gas fees are high, and the running cost of complex smart contracts is extremely high. Blockchain cannot efficiently support computing tasks such as AI computing, image processing, and complex financial modeling.
TEE solution: TEE can serve as a core component of a decentralized computing network, allowing smart contracts to outsource computing tasks to a trusted environment for execution and return trusted computing results.
Representative project: iExec (provides a TEE-based decentralized cloud computing platform).
1.2.4 Trust Issues in DePIN (Decentralized Physical Infrastructure)
DePIN (Decentralized Physical Infrastructure Networks) is a new trend in the Web3 field, such as: Helium (decentralized 5G network), Filecoin (decentralized storage), Render Network (decentralized rendering)
DePIN relies on a trustless computing and verification mechanism, and TEE can be used to ensure the credibility of data and computing tasks. For example, data processing equipment can perform computing tasks within TEE to ensure that the computing results have not been tampered with. TEE combined with remote attestation technology can provide trusted computing results to the blockchain and solve the fraud problem in the DePIN ecosystem.
1.3 Comparison between TEE and other privacy computing technologies (ZKP, MPC, FHE)
At present, privacy computing technologies in the Web3 field mainly include:
TEE (Trusted Execution Environment)
Advantages: High efficiency, low latency, suitable for high-throughput computing tasks such as MEV protection, AI computing, etc.
Disadvantages: Depends on specific hardware and has security vulnerabilities (such as SGX attacks).
ZKP (Zero Knowledge Proof)
Advantages: Mathematically prove the correctness of the data, without the need to trust a third party.
Disadvantages: High computational overhead, not suitable for large-scale computing.
MPC (Multi-Party Computation)
Advantages: No need to rely on a single trusted hardware, suitable for decentralized governance and privacy payments.
Disadvantages: Low computing performance and limited scalability.
FHE (Fully Homomorphic Encryption)
Advantages: Calculations can be performed directly in an encrypted state, suitable for the most extreme privacy requirements.
Disadvantages: The computational overhead is extremely high and currently difficult to commercialize.
Chapter 2: Technical Insider of TEE - In-depth Analysis of the Core Architecture of Trusted Computing
Trusted Execution Environment (TEE) is a hardware-based secure computing technology that aims to provide an isolated execution environment to ensure the confidentiality, integrity, and verifiability of data. With the rapid development of blockchain, artificial intelligence, and cloud computing, TEE has become an important part of the Web3 security architecture. This chapter will explore the core technical principles of TEE, mainstream implementation solutions, and its application in data security.
2.1 Basic Principles of TEE
2.1.1 Working Mechanism of TEE
TEE creates a protected isolation area inside the CPU through hardware support to ensure that code and data are not accessed or tampered with by the outside world during execution. It usually consists of the following key components:
Secure Memory: TEE uses a dedicated encrypted memory area (Enclave or Secure World) inside the CPU, and external programs cannot access or modify the data in it.
Isolated Execution: The code running in TEE is independent of the main operating system (OS). Even if the OS is attacked, TEE can still ensure data security.
Sealed Storage: Data can be encrypted using a key and stored in a non-secure environment. Only TEE can decrypt the data.
Remote Attestation: Allows remote users to verify that the TEE is running trusted code to ensure that the calculation results have not been tampered with.
2.1.2 TEE Security Model
The security model of TEE relies on the Minimal Trusted Computing Base (TCB), which is:
Only the TEE itself is trusted, not the main operating system, drivers, or other external components.
Use encryption technology and hardware protection to prevent software and physical attacks.
2.2 Comparison of three major TEE technologies: Intel SGX, AMD SEV, and ARM TrustZone
Currently, mainstream TEE solutions are mainly provided by the three major chip manufacturers: Intel, AMD and ARM.
2.2.1 Intel SGX (Software Guard Extensions)
TEE technology, introduced by Intel, first appeared in Skylake and subsequent CPUs. It provides a secure computing environment through Enclave (encrypted isolation area), which is suitable for cloud computing, blockchain privacy contracts, etc.
Core features: Enclave-based memory isolation: Applications can create protected enclaves to store sensitive code and data.
Hardware-level memory encryption: Data within the enclave is always encrypted outside the CPU and cannot be read even if the memory is dumped.
Remote Attestation: Allows remote verification that the enclave is running code that has not been tampered with.
Limitations: Enclave memory limit (only 128 MB in the early days, expandable to 1 GB+). Vulnerable to side channel attacks (such as L1 TF, Plundervolt, SGAxe). Complex development environment (need to use SGX SDK to write specialized applications).
2.2.2 AMD SEV (Secure Encrypted Virtualization)
TEE technology launched by AMD is mainly used for secure computing in virtualized environments. It is suitable for cloud computing scenarios and provides encryption protection at the virtual machine (VM) level.
Core Features
Full memory encryption: Encrypts the entire VMs memory using a CPU-internal key.
Multi-VM isolation: Each VM has an independent key, preventing different VMs on the same physical machine from accessing each others data.
SEV-SNP (latest version) supports remote attestation to verify the integrity of the VM code.
Limitations: Only applicable to virtualized environments, not to non-VM applications. High performance overhead, encryption and decryption increase the computing burden.
2.2.3 ARM TrustZone
The TEE solution provided by ARM is widely used in mobile devices, IoT devices and smart contract hardware wallets.
Through CPU-level partitioning, Secure World and Normal World are provided.
Core Features
Lightweight architecture: does not rely on complex virtualization technology and is suitable for low-power devices.
Full system-level TEE support: supports secure applications such as encrypted storage, DRM, and financial payments.
Hardware-based isolation is different from the Enclave mechanism of SGX.
Limitations: The security level is lower than SGX and SEV because Secure World relies on the implementation of device manufacturers. Development is limited, some functions can only be opened by device manufacturers, and third-party developers have difficulty accessing the complete TEE API.
2.3 RISC-V Keystone: Future Hope of Open Source TEE
2.3.1 Why do we need open source TEE?
Intel SGX and AMD SEV are proprietary technologies and are restricted by manufacturers. RISC-V, as an open source instruction set architecture (ISA), allows developers to create customized TEE solutions and avoid security issues of closed-source hardware.
2.3.2 Keystone TEE Key Features
Based on RISC-V architecture, it is completely open source. It supports flexible security policies, and developers can define their own TEE mechanisms. It is suitable for decentralized computing and Web3 ecology, and can be combined with blockchain for trusted computing.
2.3.3 Future Development of Keystone
It may become a key infrastructure for Web3 computing security, avoiding dependence on Intel or AMD. The community promotes stronger security mechanisms to reduce the risk of side channel attacks.
2.4 How does TEE ensure data security? From encrypted storage to remote authentication
2.4.1 Sealed Storage
TEE allows applications to store encrypted data externally, which can only be decrypted by applications within the TEE. For example: private key storage, medical data protection, confidential AI training data.
2.4.2 Remote Attestation
The remote server can verify whether the code running in TEE is credible to prevent malicious tampering. In the Web3 field, it can be used to verify that the environment in which smart contracts are executed is credible.
2.4.3 Side channel attack protection
The latest TEE design uses memory encryption, data access randomization and other means to reduce the risk of attacks. The community and manufacturers continue to fix TEE-related vulnerabilities, such as Spectre, Meltdown, and Plundervolt.
Chapter 3: Application of TEE in the Crypto World - From MEV to AI Computing, a Revolution is Taking Place
As a powerful hardware security technology, Trusted Execution Environment (TEE) is gradually becoming one of the most important computing infrastructures in the Web3 ecosystem. It not only solves the performance bottleneck of decentralized computing, but also plays a key role in MEV (maximum extractable value), privacy computing, AI training, DeFi and decentralized identity. Web3 computing enabled by TEE is bringing about a revolution, bringing more efficient and secure solutions to the decentralized world.
3.1 Decentralized computing: How to use TEE to solve the Web3 computing bottleneck?
Blockchain has the advantages of anti-censorship and high credibility due to its decentralized nature, but there are still significant bottlenecks in computing power and efficiency. Current decentralized computing platforms (such as Akash and Ankr) are trying to solve these problems through TEE to provide a high-performance and secure computing environment for the Web3 ecosystem.
3.1.1 Challenges of Web3 Computing
Limited computing power: Smart contracts on blockchains such as Ethereum execute slowly and cannot handle large-scale computing tasks such as AI training or high-frequency financial calculations.
Data privacy issues: On-chain computing is transparent and cannot protect sensitive data such as personal identity information, business secrets, etc.
High computational cost: Running complex computations (such as ZK proof generation) on the blockchain is extremely costly, which limits the expansion of application scenarios.
3.1.2 Akash Ankr: Decentralized Computing Enabled by TEE
Akash Network
Akash provides a decentralized cloud computing market that allows users to rent computing resources. TEE applications include:
Privacy computing: Through TEE, users can run confidential computing tasks in a decentralized environment without exposing code and data.
Trusted Computing Marketplace: Akash uses TEE to ensure that rented computing resources have not been tampered with, thus improving the security of computing tasks.
Ankr Network
Ankr provides decentralized computing infrastructure, especially in the fields of Web3 cloud services and RPC. Application of TEE in Ankr:
Secure remote computing: Use TEE to ensure that computing tasks performed in the cloud run in a trusted environment to prevent data leakage.
Censorship resistance: TEE combined with decentralized computing architecture enables Ankr to provide censorship-resistant computing resources suitable for privacy DApps.
3.1.3 Future Prospects
As Web3 computing needs grow, TEE will become a standard component of decentralized computing networks, making them more competitive in terms of privacy protection, efficiency, and security.
3.2 Trustless MEV Transactions: Why is TEE the best solution?
MEV (maximum extractable value) is a core issue in blockchain transaction sorting, involving complex strategies such as arbitrage, sandwich attacks, and liquidation. TEE provides a trustless MEV solution through trusted computing and encrypted transactions, reducing the possibility of miners and validators committing evil.
3.2.1 Current status and challenges of MEV
Front-running: Miners can run ahead of user transactions, implementing a sandwich attack.
Centralized sorting: Flashbots and other MEV solutions still rely on centralized sorters.
Information leakage risk: The current MEV bidding system may expose transaction information and affect fairness.
3.2.2 TEE-enabled MEV solutions
Flashbots TEE: Flashbots is exploring TEE as a key technology for trustless transaction ordering (MEV Boost). Transactions can be encrypted and ordered inside TEE to prevent miners or validators from tampering with the transaction order.
EigenLayer TEE: EigenLayer uses TEE to ensure the fairness of the restaking mechanism and prevent malicious manipulation of MEV. Remote proof is performed through TEE to ensure that the MEV bidding system is not manipulated.
3.2.3 Future Prospects
TEE can provide trustless sorting and privacy transactions in the MEV field, reduce miner manipulation, improve fairness, and provide a fairer trading environment for DeFi users.
3.3 Privacy-preserving computing DePIN ecosystem: How does Nillion build a new generation of privacy network enabled by TEE?
Privacy computing is an important challenge in the Web3 ecosystem, especially in the field of DePIN (decentralized physical infrastructure network). TEE provides strong privacy protection capabilities for projects such as Nillion through hardware-level encryption and isolated execution.
3.3.1 Nillion’s privacy computing solution
Nillion is a blockchain-free decentralized privacy computing network that combines TEE and MPC (multi-party computing) to achieve data privacy protection:
Data sharding processing: Encrypted calculations are performed through TEE to prevent sensitive data leakage.
Privacy Smart Contract: Nillion allows developers to build private DApps where data is only visible inside the TEE.
3.3.2 Application of TEE in DePIN Ecosystem
Smart grid: Use TEE to protect user energy data privacy and prevent abuse.
Decentralized storage: Combined with Filecoin, it ensures that the stored data is processed within the TEE to prevent unauthorized access.
3.3.3 Future Prospects
Nillion and similar projects may become the core infrastructure of Web3 privacy computing, in which TEE plays an indispensable role.
3.4 Decentralized AI: How to use TEE to protect AI training data?
The combination of AI and blockchain is becoming a hot trend in the Web3 field, but AI training faces data privacy and computing security issues. TEE can protect AI training data, prevent data leakage, and improve computing security.
3.4.1 Bittensor TEE
Bittensor is a decentralized AI computing network that uses TEE to protect the data privacy of AI training models.
Through remote attestation, it ensures that AI computing nodes have not been tampered with and provides trusted AI computing services.
3.4.2 Gensyn TEE
Gensyn allows developers to run AI training tasks in a decentralized environment, and TEE ensures data confidentiality.
Combining zero-knowledge proof (ZKP) with TEE, the credibility verification of decentralized AI computing can be achieved.
3.5 DeFi Privacy and Decentralized Identity: How does Secret Network use TEE to protect smart contracts?
3.5.1 DeFi Privacy Issues
Traditional smart contracts are transparent, all transaction data is public, and there is a huge demand for privacy DeFi.
Users want to protect transaction data such as balances, transaction records, etc.
3.5.2 Secret Network TEE
Private smart contracts: Secret Network uses TEE to protect smart contract execution, making transaction data visible only within the TEE.
Decentralized Identity (DID): TEE can be used to store user identity information, prevent identity leakage, and support KYC compatibility.
3.5.3 Future Prospects
TEE will play an increasingly important role in the field of DeFi privacy and decentralized identity, providing stronger privacy protection for decentralized finance.
Chapter 4: Conclusion and Outlook——How will TEE reshape Web3?
As one of the important technologies in the field of encryption, Trusted Execution Environment (TEE) has shown great potential in many scenarios. With the continuous development of the Web3 ecosystem, the role of TEE will become more critical, especially in the fields of decentralized infrastructure, privacy-preserving computing, smart contracts, etc. This chapter will summarize the current status of TEE technology, look forward to how it can promote the development of Web3, and analyze the potential business model and token economics opportunities of TEE in the encryption industry.
4.1 How does trusted computing promote the development of decentralized infrastructure?
4.1.1 The necessity of decentralized computing
With the rise of decentralized technology, traditional centralized computing architectures are gradually unable to meet the needs of the Web3 ecosystem. Decentralized computing can not only improve the security and fault tolerance of the system, but also enhance the transparency and anti-censorship capabilities of the network. However, decentralized computing systems face many challenges:
Trust issues: Unstable trust between nodes may lead to data tampering or unreliable calculation results.
Privacy issues: In a decentralized environment, how to protect user data privacy becomes a major problem.
Performance issues: Decentralized computing may face performance bottlenecks such as uneven distribution of computing resources and low throughput.
4.1.2 The role of TEE in decentralized infrastructure
TEE technology is the key to solving these problems. By providing a protected and isolated computing environment, TEE provides the following support for decentralized computing systems:
Trustless computing: Even without full trust, TEE can ensure the integrity of the computing process and the confidentiality of data.
Privacy protection: TEE can perform encrypted calculations without leaking data, protecting user privacy.
Enhanced performance: With the development of hardware TEE solutions, computing throughput is expected to be significantly improved.
TEE will become the core technical support in decentralized computing networks (such as Akash and Ankr), promoting the maturity and popularization of decentralized infrastructure.
4.2 Potential business models and token economics opportunities of TEE
4.2.1 TEE-driven business model
As TEE technology becomes more popular, a number of emerging business models and platforms have begun to emerge. The following are several major business models:
Decentralized computing market: Platforms such as Akash and Ankr allow users to rent computing resources through decentralized computing markets, and ensure the credibility and privacy of computing through TEE.
Privacy computing services: Companies that provide privacy-preserving computing services based on TEE can provide data encryption and computing security services for industries such as finance, healthcare, and insurance. Their profit model is mainly based on charging based on computing tasks.
Distributed computing and storage: TEE can be applied to decentralized storage and computing platforms to ensure data security and credibility in distributed systems. Related business opportunities include income from storage fees and computing service fees.
Blockchain infrastructure providers: provide specialized hardware or software tools that enable Web3 projects to run smart contracts and execute decentralized applications (DApps) in a TEE environment.
4.2.2 Token Economics Opportunities of TEE
In Web3 and the crypto ecosystem, TEE can be deeply integrated with token economics to bring new value creation opportunities. Specific opportunities include:
Tokenized computing resources: Decentralized computing platforms can exchange computing resources through tokens. Users and node operators can participate in computing tasks, submit and verify data through cryptocurrencies. All exchanges of computing resources and tasks are executed through smart contracts.
Token incentives for TEE services: TEE-based privacy computing services can use tokens as user incentives or payment methods to ensure the smooth execution and verification of privacy computing tasks.
Decentralized identity and data exchange: TEE can provide technical support for the decentralized identity (DID) system to ensure user data privacy, while promoting the popularization of decentralized identity and data exchange through tokenized incentive mechanisms.
4.3 Key development directions of TEE in the encryption industry in the next five years
4.3.1 Deep integration of TEE and Web3
In the next five years, TEE technology will play a more important role in Web3, especially in the following key areas:
Decentralized Finance (DeFi): TEE will be widely used in DeFi protocols to protect users transaction privacy, the credibility of the computing process, and improve the security of smart contracts.
Privacy computing: With the improvement of privacy protection laws and regulations in various countries, privacy computing will become a core component of Web3. The combination of TEE with privacy computing technologies such as zero-knowledge proof (ZKP) and homomorphic encryption (FHE) will provide Web3 with a more reliable privacy protection solution.
Decentralized artificial intelligence (AI): TEE provides a secure computing environment for decentralized AI, supports secure training and reasoning of AI models, and thus realizes decentralized intelligent applications.
Cross-chain computing: As the blockchain ecosystem continues to expand, TEE will promote trusted computing between different chains, making cross-chain asset exchange and data processing more secure and efficient.
4.3.2 TEE Hardware and Protocol Innovation
As TEE technology continues to develop, innovations in hardware and protocols will drive improvements in performance and security:
Hardware innovation: New generation hardware TEE solutions such as RISC-V Keystone and Intel TDX (Trusted Execution Extensions) are expected to surpass existing solutions in terms of performance, security, and scalability.
Protocol innovation: The integration of TEE with multi-party secure computing (MPC), zero-knowledge proof (ZKP) and other technologies will promote the birth of new privacy protection protocols and trustless protocols.
Decentralized hardware platform: The decentralized computing hardware platform will break through the traditional single supplier model and promote more small nodes to participate in the trusted computing ecosystem, thereby maximizing the utilization of decentralized computing resources.
4.3.3 The evolution of regulatory compliance and privacy protection
As global privacy protection regulations become stricter, TEE compliance innovation will be a key development direction in the next five years:
Multi-country compliance solutions: TEE technology will be adapted and innovated according to the privacy protection regulations of different countries and regions (such as GDPR, CCPA, PIPL) to ensure that the decentralized computing environment meets global data protection requirements.
Transparent privacy computing: The combination of TEE and technologies such as ZKP will make the privacy computing process verifiable, thereby enhancing the trust of regulators and promoting compliance implementation.
Chapter 5 Summary
TEE technology has a wide range of application potential in the Web3 ecosystem. It can not only provide a trustless computing environment, but also effectively protect user privacy. With the continuous development of TEE technology, it will play an increasingly important role in decentralized computing, privacy protection, smart contracts and other fields, and promote the maturity and innovation of the Web3 ecosystem. At the same time, TEE will also give rise to new business models and token economics opportunities, bringing more value creation opportunities to the crypto industry. In the next five years, with hardware innovation, protocol development and regulatory adaptation, TEE will become one of the indispensable core technologies in the crypto industry.
