Huobi Growth Academy丨TEE (Trustworthy Execution Environment) In-depth research report: The revolution of privacy computing, the ultimate puzzle 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 calculation 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.

• The core features of TEE

Isolation: TEE runs in a protected area of ​​the CPU, isolated from operating systems, other applications, and external attackers. Even if the hacker breaks through the main operating system, the data and code inside TEE remain secure.

Integrity: TEE ensures that code and data are not tampered with during execution.

With Remote Attestation, TEE can verify externally that it executes trusted code.

Confidentiality: TEE internal data is not accessed externally, and cannot be read even by device manufacturers or cloud providers. The Sealed Storage mechanism is adopted to ensure that sensitive data remains safe after the device is powered off.

1.2 Why does Web3 require TEE?

In the Web3 ecosystem, privacy computing, secure execution and censorship resistance are core requirements, and TEE happens to provide this critical capability. Currently, blockchain and decentralized applications (DApps) face the following problems:

1.2.1 Privacy Issues on Blockchain

Traditional blockchains (such as Bitcoin and Ethereum) have completely transparent features, and all transactions and smart contract data can be viewed by anyone. This brings up the following problems:

User privacy leak: In DeFi transactions, NFT purchases, social applications and other scenarios, the user's capital flow and identity may be tracked.

Enterprise data breach: Enterprises want to utilize blockchain technology, but sensitive data (such as commercial secrets, medical records) cannot be stored on the public chain.

TEE solution: Through the TEE+ smart contract combination, developers can build private computing contracts, only authorized users can access the calculation results, and the original data is hidden from the outside. Secret Network (TEE-based privacy smart contract platform) has implemented this model, allowing developers to create DApps that protect users' privacy.

1.2.2 MEV (Miners can extract value) problem

MEV (Miner Extractable Value) refers to the use of the transparency of transaction information to arbitrage when a miner or block producer packages transactions. For example: Front-running: Miners or robots pre-submit transactions before users trade to make a profit. Sandwich Attack: An attacker inserts his own transaction before and after a user's transaction to make a profit by manipulating the price.

TEE Solution: With TEE, transactions can be sorted in a private environment, ensuring that miners cannot see transaction details in advance.

Flashbots is exploring the TEE+ Fair Sequencing scheme 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 is expensive, and the cost of running complex smart contracts is extremely high. Blockchain cannot efficiently support AI computing, image processing, complex financial modeling and other computing tasks.

TEE Solution: TEE can act as the 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 decentralized cloud computing platform based on TEE).

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 trustless computing and verification mechanisms, and TEE can be used to ensure the trustworthiness of data and computing tasks. For example: a data processing device can perform calculation tasks within the TEE to ensure that the calculation results have not been tampered with. TEE combines remote proof technology to provide trusted computing results to blockchain to 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 (Trustable Execution Environment)

Advantages: High efficiency, low latency, suitable for high-throughput computing tasks, such as MEV protection, AI computing, etc.

Disadvantages: Relying on specific hardware, there are security vulnerabilities (such as SGX attacks).

ZKP (Zero Knowledge Proof)

Advantages: Mathematically prove the correctness of data without trusting third parties.

Disadvantages: The calculation overhead is large and not suitable for large-scale computing.

MPC (multi-party computing)

Advantages: No need to rely on a single trusted hardware, it is suitable for decentralized governance and privacy payments.

Disadvantages: Low computing performance and limited scalability.

FHE (full homomorphic encryption)

Advantages: It can be directly calculated in an encrypted state, suitable for the most extreme privacy needs.

Disadvantages: The calculation overhead is extremely large and it is difficult to commercially apply.

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 designed 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 deeply explore the core technical principles, mainstream implementation solutions and their applications in data security.

2.1 The basic principles of TEE

2.1.1 TEE working mechanism

TEE creates a protected isolation area inside the CPU through hardware support, ensuring that code and data are not accessed externally or tampered with 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 with a key and stored in a non-secure environment. Only TEE can decrypt this data.

Remote Attestation: Allows remote users to verify that TEE has run trusted code to ensure that the calculation results have not been tampered with.

2.1.2 TEE 's security model

TEE's security model relies on the Minimal Trusted Computing Base (TCB), i.e.:

Trust only TEE itself, 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 the three mainstream TEE technologies: Intel SGX,

AMD SEV, ARM TrustZone**

At present, the mainstream TEE solutions are mainly provided by three major chip manufacturers: Intel, AMD and ARM.

2.2.1 Intel SGX (Software Guard Extensions)

TEE technology launched by Intel first appeared in Skylake and subsequent CPUs. Provide a secure computing environment through Enclave (encrypted isolation zone), suitable for cloud computing, blockchain privacy contracts, etc.

Core features. Enclave-based memory isolation: Applications can create protected Enclaves that store sensitive code and data.

Hardware-level memory encryption: The data in Enclave is always encrypted outside the CPU and cannot be read even if the memory is dumped.

Remote Proof: Allows remote verification Enclave to run untampered code.

Limitations: Enclave memory limit (only 128MB in the early days, expandable to 1GB+). Vulnerable to side channel attacks (such as L1TF, Plundervolt, SGAxe). Complex development environment (need to write specialized applications using the SGX SDK).

2.2.2 AMD SEV (Secure Encrypted Virtualization)

TEE technology launched by AMD is mainly used for secure computing in virtualized environments. Suitable for cloud computing scenarios, providing virtual machine (VM) level encryption protection.

• Core features

Full memory encryption: Encrypt the memory of the entire VM using the CPU internal key.

Multi-VM Isolation: Each VM has an independent key, preventing different VMs on the same physical machine from accessing each other's data.

SEV-SNP (latest version) supports remote proofing to verify the integrity of VM code.

Limitations: Applicable to virtualized environments only, not to non-VM applications. The performance overhead is high, and encryption and decryption increase the computing burden.

2.2.3 ARM TrustZone

TEE solutions provided by ARM are widely used in mobile devices, IoT devices and smart contract hardware wallets.

Secure World and Normal World are provided through CPU-level partitions.

• Core features

Lightweight architecture: Not dependent on complex virtualization technologies, suitable for low-power devices.

System-level TEE support: supports secure applications such as encrypted storage, DRM, and financial payment.

Hardware-based isolation, different from SGX's Enclave mechanism.

Limitations: Security levels are lower than SGX and SEV, because Secure World relies on device manufacturers' implementation. Development is restricted, and some functions can only be opened by device manufacturers, making it difficult for third-party developers to access the complete TEE API.

2.3 RISC-V Keystone: The Future Hope of Open Source TEE

2.3.1 Why do I need open source TEE?

Intel SGX and AMD SEV are proprietary technologies and are limited by manufacturers. RISC-V, as an open source instruction set architecture (ISA), allows developers to create customized TEE solutions to avoid security issues in closed source hardware.

2.3.2 Key Features of Keystone TEE

Based on RISC-V architecture, completely open source. Supports flexible security policies, developers can define their own TEE mechanisms. Suitable for decentralized computing and Web3 ecosystem, trusted computing can be performed in combination with blockchain.

2.3.3 The future development of Keystone

It may become a critical infrastructure for Web3 computing security, avoiding dependencies on Intel or AMD. The community promotes stronger security mechanisms to reduce the risk of side channel attacks.

**2.4 How to ensure data security in TEE? From encrypted storage to

remote authentication**

2.4.1 Sealed Storage

TEE allows applications to store encrypted data externally, and only applications within TEE can decrypt. For example: private key storage, medical data protection, confidential AI training data.

2.4.2 Remote Attestation

The remote server can verify that the code run by TEE is trustworthy and prevent malicious tampering. In the Web3 world, the environment that can be used to verify the execution of smart contracts is trustworthy.

2.4.3 Side channel attack protection

The latest TEE design uses memory encryption and randomization of data access to reduce the risk of attack. The community and vendors continue to fix TEE-related vulnerabilities, such as Spectre, Meltdown, and Plundervolt.

Chapter 3: TEE's Application in the Crypto World - From MEV to AI

Computing, a revolution is taking place

Trusted Execution Environment (TEE), as a powerful hardware security technology, 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 areas such as MEV (maximum extractable value), privacy computing, AI training, DeFi and decentralized identity. TEE-enabled Web3 computing is launching a transformation that brings more efficient and secure solutions to the decentralized world.

**3.1 Decentralized computing: How to solve the bottleneck of Web3

computing using TEE?**

Blockchain has the advantages of censorship resistance and high credibility due to its decentralized nature, but there are still significant bottlenecks in terms of 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 The Challenge of Web3 Computing

Computational capability is limited: Smart contracts on blockchains such as Ethereum are slow to execute and cannot handle large-scale computing tasks such as AI training or high-frequency financial computing.

Data privacy issues: On-chain computing is transparent and cannot protect sensitive data, such as personal identity information, trade secrets, etc.

High computing cost: Running complex computing (such as ZK proof generation) on the blockchain is extremely costly, limiting the expansion of application scenarios.

3.1.2 Akash & Ankr: TEE-enabled decentralized computing

• Akash Network

Akash provides a decentralized cloud computing market that allows users to rent computing resources. TEE's applications include:

Privacy Computing: With TEE, users can run confidential computing tasks in a decentralized environment without exposing code and data.

Trusted computing market: Akash ensures that the leased computing resources have not been tampered with through TEE, improving the security of computing tasks.

• Ankr Network

Ankr provides decentralized computing infrastructure, especially in the fields of Web3 cloud services and RPC. TEE application in Ankr:

Secure remote computing: Use TEE to ensure that the computing tasks executed in the cloud run in a trusted environment to prevent data leakage.

Censorship Resistance: TEE combines a decentralized computing architecture to enable Ankr to provide censorship-resistant computing resources for privacy DApps.

3.1.3 Future Outlook

As the demand for Web3 computing grows, TEE will become the standard component of decentralized computing networks, making it more competitive in terms of privacy protection, efficiency and security.

3.2 Trust MEV Transaction: Why is TEE the optimal solution?

MEV (Maximum Extractable Value) is a core issue in blockchain transaction sorting, involving complex strategies such as arbitrage, sandwich attacks, and clearing. TEE provides a trustless MEV solution through trusted computing and crypto transactions, reducing the possibility of evil committed by miners and validators.

3.2.1 Current Situation and Challenges of MEV

Front-running: Miners can take the lead before user transactions to implement sandwich attacks.

Sort Centralization: Flashbots and other MEV solutions still rely on a centralized sorter.

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 are exploring TEE as a key technology for trustless transaction sorting (MEV Boost). Transactions can be encrypted and sorted within TEE, preventing miners or validators from tampering with the transaction sequence.

EigenLayer & TEE: EigenLayer guarantees the fairness of the restaking mechanism through TEE and prevents malicious manipulation of MEVs. Remote proof is performed through TEE to ensure that the MEV bidding system is not manipulated.

3.2.3 Future Outlook

TEE can provide "trustless sorting" and "private transactions" in the MEV field, reducing miner manipulation, improving fairness, and providing a fairer trading environment for DeFi users.

**3.3 Privacy protection computing & DePIN ecosystem: How does Nillion

build a new generation of privacy network empowered 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 for projects such as Nillion through hardware-level encryption and isolation execution.

3.3.1 Nillion 's privacy calculation 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, and data is only visible within TEE.

3.3.2 Application of TEE in the DePIN ecosystem

Smart Grid: Use TEE to protect users’ energy data privacy and prevent abuse.

Decentralized storage: In combination with Filecoin, ensure that stored data is processed internally in TEE and prevent unauthorized access.

3.3.3 Future Outlook

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 breaches, 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-trained models.

Through remote proof, ensure that the AI ​​computing nodes have not been tampered with and provide 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) and TEE, the credibility verification of decentralized AI computing is achieved.

**3.5 DeFi Privacy and Decentralized Identity: How does Secret Network

protect smart contracts with TEE?**

3.5.1 DeFi Privacy Issues

Traditional smart contracts are transparent, all transaction data are public, and there is 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, so that transaction data is visible only within TEE.

Decentralized Identity (DID): TEE can be used to store user identity information to prevent identity leakage, and also supports KYC compatibility.

3.5.3 Future Outlook

TEE will play an increasingly important role in the fields of DeFi privacy and decentralized identity, providing stronger privacy protection for decentralized finance.

Chapter 4: Conclusion and Outlook - How will TEE reshape Web3?

Trusted Execution Environment (TEE), as one of the important technologies in the field of encryption, 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 protection computing, smart contracts, etc. This chapter will summarize the current status of TEE technology, look forward to how it can drive Web3, and analyze potential business models and token economics opportunities in the crypto industry.

**4.1 How does trusted computing drive 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 censorship resistance of the network. However, decentralized computing systems face many challenges:

Trust issue: Instability in trust between nodes may lead to data tampering or untrusted calculation results.

Privacy Issue: In a decentralized environment, how to protect users’ data privacy has become 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, isolated computing environment, TEE provides the following support for decentralized computing systems:

Detrustworthy computing: Even without complete trust, TEE ensures the integrity of the computing process and the confidentiality of the data.

Privacy protection: TEE can perform encrypted calculations without leaking data to protect 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 in

TEE**

4.2.1 TEE-driven business model

As TEE technology gradually becomes popular, multiple emerging business models and platforms are beginning to emerge. Here are several major business models:

Decentralized computing market: Platforms such as Akash, Ankr, etc. allow users to rent computing resources through the decentralized computing market, and ensure the credibility and privacy of computing through TEE.

Privacy computing service: Companies that provide TEE-based privacy protection computing services can provide data encryption and computing protection services for industries such as finance, medical care, and insurance. The profit model is mainly based on calculation tasks.

Distributed Computing and Storage: TEE can be applied in decentralized storage and computing platforms to ensure the security and credibility of data in distributed systems. Related business opportunities include revenue from storage fees and computing service fees.

Blockchain infrastructure provider: Provides dedicated hardware or software tools to enable Web3 projects to run smart contracts and execute decentralized applications (DApps) in a TEE environment.

4.2.2 TEE 's Token Economics Opportunities

In the Web3 and 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 cryptocurrency, and all computing resources and tasks are exchanged through smart contracts. implement.

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 decentralized Identity (DID) systems to ensure user data privacy, and at the same time promote the popularization of decentralized Identity and Data Exchange through tokenized incentive mechanisms.

**4.3 Key development directions of TEE in the crypto industry in the

next five years**

4.3.1 Deep integration of TEE and Web3

TEE technology will play a more important role in Web3 over the next five years, especially in the following key areas:

Decentralized Finance (DeFi): TEE will be widely used in DeFi protocols to ensure users' transaction privacy and credibility in computing processes, while improving the security of smart contracts.

Privacy Computing: With the improvement of privacy protection 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), homomorphic encryption (FHE) will provide Web3 with a more trusted privacy protection solution.

Decentralized Artificial Intelligence (AI): TEE provides a secure computing environment for decentralized AI, supporting the security training and inference of AI models, thereby realizing decentralized intelligent applications.

Cross-chain computing: With the continuous expansion of the blockchain ecosystem, TEE will promote trusted computing between different chains, making cross-chain asset exchange and data processing more secure and efficient.

4.3.2 TEE 's hardware and protocol innovation

With the continuous development of TEE technology, hardware and protocol innovations will drive its performance and security improvements:

Hardware innovation: Next-generation hardware TEE solutions such as RISC-V Keystone and Intel TDX (Trustable Execution Extension) 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 agreements and trustless agreements.

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 achieving the maximum utilization of decentralized computing resources.

4.3.3 The evolution of regulations and privacy protection

As global privacy protection regulations become stricter, TEE's innovation in compliance will be a key development direction in the next five years:

Multi-country Compliance Solution: TEE technology will be adapted and innovated according to privacy protection regulations in different countries and regions (such as GDPR, CCPA, PIPL) to ensure that the decentralized computing environment complies with 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 regulatory authorities’ trust and promoting compliance implementation.

Chapter 5 Summary

TEE technology has broad application potential in the Web3 ecosystem, which not only provides a trustless computing environment, but also effectively protects user privacy. With the continuous development of TEE technology, it will play an increasingly important role in the fields of decentralized computing, privacy protection, smart contracts, etc., and promote the maturity and innovation of the Web3 ecosystem. At the same time, TEE will also give birth 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.