Blockchain
Ironblocks’ “Venn” Network Aims to Prevent Malicious Transactions from Reaching Blockchains
Israeli cryptocurrency firm Ironblocks is pioneering a new layer of security called Venn that will carefully examine blockchain transactions before they are executed, potentially preventing multi-million dollar attacks and hacks.
Venn is a security product: Its customers, lending protocols and otherwise, will pay a small fee in exchange for what is essentially an extra pair of eyes making sure nothing suspicious happens on their books. But instead of one pair, they’ll have many operators looking for fraud, says Ironblocks CEO Or Dadosh.
That’s because Venn is intended to be a decentralized network much like the blockchains that all DeFi protocols live on. It will be made up of a series of node operators working together to reach consensus. While those operators on Ethereum and other blockchains add transactions to the chain’s economic history (the ledger), those on Venn will act as gatekeepers and determine whether proposed transactions are too suspicious to get there.
Venn is the latest attempt to tackle cryptocurrency’s ubiquitous crime problem. On any given week, projects large and small lose six figures or more to fraud, theft, economic attacks, and other costly scams that drain their customers’ cryptocurrencies. All of these transactions happen on the blockchain, where they are irreversible; there is no rewind button to move the stolen money into a victim’s account.
Venn doesn’t add a “rewind” button to the blockchain, but rather a “review and revoke” functionality. Transactions entered into it haven’t happened yet, Dadosh told CoinDesk. They’re on their way, assuming they pass Venn’s vectors, of course.
While Venn isn’t live yet, Dadosh explained in an interview how it will work. Actual cryptocurrency users won’t necessarily be aware of Venn, as they won’t have to do anything special to be included in the network. If, however, they are using a protocol that is a Venn client, part of their gas fee will pay for their transaction to be checked for malicious activity through Venn.
Most transactions will (allegedly) pass through Venn without a hitch in about 100-200 milliseconds, much faster than the transactor would likely notice. This all happens in the background and privately, meaning there is no opportunity for bots to pre-empt trades or employ other controversial MEV strategies. Deleted transactions go to the main chain for execution.
But if Venn operators detect anything suspicious in a transaction, they will block it before it has a chance to execute. Security teams will be alerted and investigate the matter. In the meantime, normal transactions will proceed to execute unimpeded.
“It’s about ensuring that the assets themselves are protected from malicious transactions,” Dadosh said, “ensuring that no malicious transactions whatsoever are executed.”
Venn is expected to go on testnet in the coming weeks. The security of the network itself will come from restacking; Venn is a so-called “actively validated service” that gets the shared economic security of the EigenLayer ecosystem. Dadosh said Venn has lined up well-known lending protocols as early customers, but demurred when asked which ones.
Customers, whoever they are, will have a high degree of autonomy in deciding which transactions to enter into Venn. They won’t necessarily send every user-initiated action through the security layer, but they could.
Eventually, customers will have the option to add extra security checks beyond the basic oversight that Venn will apply to all transactions that pass through it, Dadosh said. These will be managed and offered by individual operators, the security firms that run the nodes.
In all of this is Ironblocks, the security company that first conceived of Venn and organized, built, and maintained it. That said, Venn will not be an Ironblocks product in the same way that others are. Security products areThe commissions collected by Venn go to all of its operators, including Ironblocks.
Ultimately, Venn will be governed by a security council that will make decisions about its operations, Dadosh said. Asked whether Venn would issue a token, a common (and valuable) way for crypto networks to distribute power among users, Dadosh said he couldn’t talk about that at this time. But he did say Venn will run a points program that will recognize usage of the network. Many crypto protocols use points as a precursor to token issuances.
“The original idea was to create a prevention layer for malicious exploits and make sure it was aligned with Web3,” Dadosh said.