When Web2 first emerged it was hailed as a revolution, facilitating the spread of user-generated content and creating an era of online commerce, but at the same time it also ushered in an age of misinformation, centralized gatekeepers and unprecedented surveillance.
Web3 brings its own novel security concerns and threats, and they span the whole gamut of cyber challenges. For instance there are risks around cyber theft, such as smart contract logic hacks, flash loan attacks, cryptojacking and rug pulls. In addition, there are dangers associated with the manipulation of blockchain data, as well the risks of data becoming unavailable, plus the challenges of authenticating blockchain data to know what’s real and what isn’t.
Fortunately, just as blockchain has emerged to solve the challenges of centralization, censorship and surveillance in Web2, it’s also providing its own innovative solutions to the security threats it has spawned. Read on to learn about the most promising blockchain security trends that are emerging to make Web3 a safer place for its users.
Key blockchain security trends to watch
1. Zero Trust Protocols
ZTP architectures provide a novel approach to network security by emphasizing the concept of “verifying everything and trusting nothing”. It’s a security model that ensures every user action, request for access and interaction is authenticated, verified and authorized.
It’s in stark contrast to the older “castle-and-moat” security model, in which networks (the castle) establish a secure perimeter (the moat) using a firewall or similar technology. Anything inside this perimeter is given full access to the network, without any further checks being made. But while this model worked well in the early days of the net, these days there are far too many routes across that moat.
ZTPs such as Pera were developed to remedy this, creating a model where every single entity, both inside and outside the network, is considered to be untrustworthy until it can prove otherwise. Pera provides a way to ensure every single action, request and interaction undergoes rigorous authentication and authorization while preserving users’ self custody, to ensure their digital assets remain safe. Its secret sauce is dWallets, a new cryptographic primitive that’s used to enforce logic on user-generated signatures to verify transactions on every network.
2. Modular shielding
This is an emerging technology aimed at safeguarding user’s privacy by ensuring transactions can be processed without revealing any of the details. It provides users with a way to mask the amount and type of funds they’re sending to any wallet address, while ensuring that the transaction is still recorded on the blockchain and verified in a way that’s provable.
Leading the field in this area is Namada, creator of a Shielded Asset Hub that’s distinguished by its ability to protect any kind of asset transfer, including any cryptocurrency or NFT, across the Ethereum blockchain, EVM chains and also IBC chains.
3. Private staking
Private staking refers to a decentralized staking method that paves the way for the distributed operation of Ethereum validators across multiple nodes without any need for trust. It provides a more robust, private and secure way for DeFi users to stake ETH to secure the network while maximizing the rewards they can earn through “liquid restaking” protocols.
One of the problems with Ethereum’s proof-of-stake model is that validators must remain online at all times to perform their duty by proposing or adding new blocks to the relay chain, which it does by signing the new data at every epoch. Failing to remain online can result in slashing penalties, which can result in stakers losing the funds they have locked into a smart contract. Unfortunately, under the existing model, validators are forced to host themselves on a single server such as a cloud server, which introduces the risk of a single point of failure.
SSV Network has developed the concept of Distributed Native Restaking, which overcomes these risks by making it possible for anyone to create and distribute a validator across multiple nodes, rather than just one. In this way, it achieves active-active redundancy without violating the Ethereum protocol’s rules. It’s a fault-tolerant decentralized security layer that eliminates the risk of slashing.
4. Layer-2 networks
L2s, as they’re called, are secondary networks built atop of blockchains (Layer-1s) that are designed to address challenges around scalability. Blockchains struggle to get the balance right between transaction volume, decentralization and security, and L2s are the main solution to this challenge. Essentially, what they do is offload transactions to the L2, where they can be processed in batches, vastly increasing performance for blockchain networks, which can simply focus on remaining decentralized and secure.
One of the most intriguing L2 projects is Coti, which adds an extra layer of privacy to each transaction it processes. Coti’s confidential transactions can enhance the security of Web3 protocols in many ways. For instance, they enable DEX platforms to keep their transaction history private and encrypt transaction data to minimize slippage and losses from MEV attacks. They also help real-world asset protocols to trade assets such as real estate, art and fine wine while remaining anonymous, and can maintain the anonymity of decentralized social media users.
Coti’s capabilities to operate such things are due to their Garbled Circuits technology, which offers a lightweight, secure, and fast means of carrying out confidential transactions of all kinds.
5. Zero-Knowledge proofs
The last major blockchain security trend we’re seeing is ZK-proofs, which are a technique used by L2s and sidechains to maintain transaction privacy. ZK-proofs use cryptography to enable one party in a transaction to prove they have knowledge of a specific piece of information, without revealing what that information is.
One of the most advanced ZK-proof techniques is Space and Time’s ZK coprocessor, which has been optimized for real-time Structured Query Language or SQL, enabling smart contract-powered decentralized applications to process and verify data at lightning speed.
Space and Time’s ZK coprocessor uses an algorithm known as “proof-of-SQL” to prove that computations were done accurately, and ensure that both the query and the underlying data used to process that query is accurate and truthful. It provides a way for smart contracts to check that data hasn’t been manipulated or tampered with, without revealing any of that information.
The road to trustworthy Web3
As the above trends mature, they will bring big benefits to every blockchain user. For Web3 to become mainstream, decentralized applications and protocols will need a way to implement robust security, auditing capabilities, real-time transaction monitoring and identity verification and more, to ensure no one is being cheated or conned.
The above security measures all have one thing in common. That is, they’ll help to improve the security of Web3 and create a blockchain ecosystem that’s much more secure, resilient and trustworthy than the one we have now.
Featured image credit: Shubham Dhage/Unsplash
