Trusted Execution Environments (TEEs) are emerging as key components in blockchain technology, facilitating both scalability and security. TEEs are isolated areas within processors designed to keep data and code tamper-proof and confidential during execution. More than 50 projects are currently utilizing TEEs to enhance privacy and enable secure offchain computations. By employing hardware-level trust, TEEs allow for the execution of confidential smart contracts while requiring nodes to have specialized hardware. This dependency can decrease the size of the validator set and, consequently, privacy levels. TEEs also use asymmetric cryptography to conceal function calls and smart contract codes. However, vulnerabilities in TEE hardware, such as accidental or government-mandated backdoors, raise concerns about their security. Despite these risks, TEEs can significantly boost blockchain efficiency by performing computationally intensive tasks offchain, helping to reduce onchain gas costs. Notable examples include projects like Enigma and Unichain, which leverage TEEs for private computing and transaction processing. Innovations in TEE integration are expected to expand as decentralized applications grow more complex, potentially revolutionizing how smart contracts function in a secure environment.

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