Mempool

A mempool refers to the waiting area for verified transactions until they are included in the block. It is also known as the transaction queue. The sole purpose of this pool is to act as a gateway or bridge from the node to the blockchain. 

A mempool refers to the waiting area for verified transactions until they are included in the block. It is also known as the transaction queue. The sole purpose of this pool is to act as a gateway or bridge from the node to the blockchain. 

A mempool is a set of memory structures where a group of verified transactions resides until they bag their seat in the blockchain. It is akin to the queue where people wait until they reserve their seats in the restaurant. This pool is a lounge area for such transactions to wait until block addition. Here, the transactions lined up are mostly unconfirmed ones, meaning nodes have verified them, but they still need to be included in the block. Hence, they live in the mempool in the blockchain for a shorter period.

The mechanism of a mempool initiates with the transactions conducted by the crypto user. In short, when a user sends some coins, the transaction is then sent to the network node that is connected to it. Next, the node will check and verify the transaction in terms of signature and input-output and add it to the pool. Later, the node will send it to another node, and the latter will send it to its peers. This process of replication will continue until multiple nodes verify each transaction.

Once multi-verified, miners, usually the ones from the nodes, complete the hash and add it to their block. If they are successful, their block gets added to the blockchain. Until this point (block addition), the transactions resided in the blockchain's mempool. After inclusion, they no longer stay in this pool.

As a new block is added to the chain, all nodes receive a notification. If the nodes have any transactions similar to the ones in this block, they remove them from the mempool.

There are two ways to access the data (transactions) within the mempool explorer. It includes access via blockchain API (Application Programming Interface) or mempool data provider. Let us look at each in detail:

#1 - Using Node or Blockchain API:

Node users can either utilize their node or API to access this pool. However, it depends on the executor the client used. There are many executor clients like Geth, Open Ethereum, Erigon, Parity, Nethermind, and others. And each one has a different name allotted to mempool explorers. A person can use the JSON-RPC method to request the pool contents. For instance, Geth, Erigon, and Nethermind refer to mempool as "txpool." However, the exact synonym for Open Ethereum is "TX-queue." 

Likewise, the developers can use blockchain API to interact with the network directly. Plus, there is no need to own a node. Hence, access to mempool explorer is easy and hassle-free.

#2 - Using Mempool Data Provider:

Similarly, nodes and validators can access data via data providers. The main advantage of these data providers is that they provide one single access point for multiple blockchains. These providers are akin to third-party providers using API, enabling access to historical data, mempool fees, and much more. Thus, it is feasible for a person to access the data contents of different blockchains at one point.

Let us look at some examples to comprehend the concept in a better way.

Example #1

Suppose John is a validator and miner working on the Bitcoin blockchain. In five years, he has verified more than 50,000 transactions on the protocol. In most cases, his transactions were uploaded first to the chain. However, there was one incident that did not happen as expected. On a usual basis, John picked 2000 transactions and started verifying them. After sending them across different nodes present in the network, John later started mining on confirmation. 

As he started mining, he decrypted the hash and received a block reward. Now, John was waiting for his transactions to be part of the blockchain. Once he received confirmation, his block would join the chain. However, just a few minutes before, John received a notification of a new block getting added to the blockchain. After scanning the contents, a few of them were also under his block. As a result, he had to remove them from the mempool. 

Example #2

A group of over 30 Solana (SOL) validators has been penalized and removed from the Solana Foundation Delegation Program for allegedly enabling "sandwich attacks," a form of economic exploitation in the crypto trading space. These validators, who remain active on the network but are no longer eligible for payout boosters, are accused of using bots to manipulate unconfirmed transactions by front-running and backfilling trades. This issue arose from the use of mempools—waiting areas for unconfirmed transactions—that were initially part of Jito Labs' validator software. Although Jito Labs turned off the mempool function to protect traders, the problem shifted underground, with some validators allegedly profiting from private mempools. As a result, the Solana Foundation has blocked 32 operators from its delegation program and continues to enforce actions against those facilitating such attacks.

Although mempool is a waiting area for unconfirmed transactions, they do have a positive influence on the blockchain. Let us look at some of its benefits:

• It avoids duplication of transactions: The foremost advantage of mempool is that it is visible to the miners and nodes. They avoid allowing similar transactions to reside in the blockchain. Thus, if a miner has already added transaction 245 in the block, which is further included in the chain, other miners cannot do the same. The nodes can remove replicates from the pool and improve the blockchain's efficiency. 
• Restricts double-spending attacks: In the same way, this pool also avoids any double-spending attacks on the chain. And it happens with the combined effort of this pool and nodes. As there are no replicated transactions in the network, the chances of using a currency multiple times do not exist.  
• Prevents network congestion: Also, this pool prevents the processing of too many unconfirmed transactions at once. With a limited headcount, it avoids any unwanted traffic on the blockchain. 

In contrast to the above benefits discussed above, there are some limitations to the concept. Let us understand them in brief:

• Scalability issues: One of the major issues in the pool concerns transaction limits. Miners and validators might encounter problems with high transaction volumes. Since the transaction limit is restricted, challenges like network congestion exist. 
• Prioritization in the block order: Another challenge faced by miners is in the block sequence within the mempool. Those transactions with higher fees get higher priority and are included in the block. Thus, chances of those with lower fees stay behind. 
• Spam attacks: Likewise, the chances of spam attacks along with the mempool fees are higher than the transactions within. The hackers may create fake transactions to fill the limit and congest the pool. As a result, it creates an opportunity to interrupt the system and access MEV (maximal extraction value).