A Time-Bound Signature Scheme for Blockchains
Benjamin Marsh, Paolo Serafino
TL;DR
The paper addresses MEV-induced inefficiencies in transaction inclusion by introducing time-bound Schnorr signatures (TB-Sig) that tie expiry to a blockchain block height, using the chain as a universal clock. TB-Sig adds a compact 3-tuple signature $(R,z,t_e)$ with $t_e$ embedded in the Fiat-Shamir challenge, ensuring validity cannot be extended beyond the signer’s intent while remaining compatible with existing Schnorr/ECDSA infrastructure. Security is established via EUF-CMA in the Algebraic Group Model and the AGM framework, and the approach is analyzed in a Stackelberg MEV model to show that TB-Sig restores a steady-state equilibrium with negligible tips. Practically, TB-Sig provides a low-overhead, opt-in mechanism to mitigate MEV incentives without altering consensus rules, with potential applicability to EIP-1559 and broader blockchain contexts including smart contracts and time-bounded escrow protocols.
Abstract
We introduce a modified Schnorr signature scheme to allow for time-bound signatures for transaction fee auction bidding and smart contract purposes in a blockchain context, ensuring an honest producer can only validate a signature before a given block height. The immutable blockchain is used as a source of universal time for the signature scheme. We show the use of such a signature scheme leads to lower MEV revenue for builders. We then apply our time-bound signatures to Ethereum's EIP-1559 and show how it can be used to mitigate the effect of MEV on predicted equilibrium strategies.