Users’ get hacked due to malicious activities is not an unknown concept when it comes to crypto. For the very reason the researchers come up with a proposal that introduces a type of token that could be reversed if there is a hacking or any unpleasant behaviors in the picture. This suggestion specified to look over the ERC-20R and ERC-721R, these are the modified versions of the very same standards that oversee Ethereum tokens and nonfungible tokens (NFTs) as well.
The basic idea behind this concept is that this new standard would allow users to hold some control on their recent transactions after the transaction is complete. Users could make “freeze request” on the recent transaction which would lock those funds for a decentralized judiciary system to determine the accuracy and authority of that particular transaction.
Both the party involved would be given a chance to present their side of evidence. The judges are chosen randomly from a decentralized pool which reduces the chance of collusion at any point. This ultimately means either the funds would be returned or it will stay where they are and this will be the final decision and no further contention would be entertained.
What could have prevented the crypto hack 2022?
One of the key factors of the decentralization base is that the transaction flow is always a one way street and this new preposition jeopardize the baseline of decentralization. Earlier any transactions on decentralized platform couldn’t be undone in any circumstances but with this new protocol change, the fundamental principle would be undermined.
The reversible crypto asset is no doubt a well intentioned notion but it’s not necessary completely. Although there are several other ways to achieve security and keeping the decentralized ecosystem intact and doesn’t undermines the core strengths of cryptocurrency.
Step such as audit of smart contract codes on an ongoing basis can be the first. As the source of several problems in DeFi is from the underlying exploits present in smart contracts. Opting for comprehensive and independents security audits can find the bugs and shortcomings before the release, saving the users from fraud. Having a robust security monitoring solution set up for your smart contract can save you big bucks in the future because it’s crystal clear that any deployed smart contract will at some point have risk factors that need constant monitoring and even defending.
Its fair assessment to say that reversible tokens could not have helped the situation that much, but instead monitoring would have. However, by the time this came into notice, the coins were already stolen and transferred repeatedly to several wallets. So the question arises, “is it possible to reverse each of these transactions?” This would have definitely created new complexities and even newer risks.
Instead of messing with a solid infrastructure that makes crypto powerful, the more sensible approach would be to monitor the security process across Web3. This will allow the decentralized assets to remain immutable and not unprotected.