A recent suggestion could result in the return of monies to cryptocurrency theft victims. A “reversible” Ethereum token is still controversial in the business world.
Have thieves recently stolen your priceless Bored Ape NFT? For such, a new token standard may exist.
Two new Ethereum token standards, ERC20R and ERC721R, have just been proposed by Standford researchers Kaili Wang, Qinchen Wang, and Dan Boneh.
To be interoperable with many decentralized apps, a smart contract must adhere to a token standard, which is an interface (or set of guidelines).
The newly suggested token standards, which are extensions of the current ERC20 and ERC721, would now allow for the reversal of harmful transactions.
The most significant attacks we’ve encountered have unquestionably been thefts, according to Wang.
If only there were a method to undo the thefts in those situations.
ERC20R and ERC721R, in essence, combine a governance contract with a token contract.
The idea claims that a “decentralized court system,” in which a decentralized quorum of judges votes to freeze and undo harmful transactions, controls the governance smart contract.
For example, a victim whose funds were lost or compromised might request a freeze from the governance smart contract with the necessary supporting documentation.
The victim is required to pay for the judicial proceedings in order to compensate the dispersed judges when requesting such a freeze. According to the idea, priority fees, which may be added to a case to hasten its assessment, can also be contributed by the victim.
The assets may be stopped and a trial may begin if the victim receives the support of the majority of the dispersed judges.
The decentralized judges will once again vote on the verdict after hearing testimony from both the victim and the hacker. The money is then either refunded to the victim or denied based on the results of the final vote.
Many professionals in the sector have harshly attacked the plan on Twitter, arguing that such coins violate the fundamental tenets of blockchain technology.
According to Kieran Daniels of DeFi project Streams, “This is a bad concept that won’t work and is against the fundamental premise of cryptocurrencies.”
Popular mobile-first cryptocurrency wallet Argent also claimed that social recovery and multi-signature wallets can assist solve this issue while staying “truly permissionless.”
Reversibility in ERC20 token contracts might make it difficult to connect with decentralized apps, in addition to going against the spirit of cryptocurrency.
According to ZKLabs CEO Matthew Di Ferrante, “the ‘pressure’ you suggest would work against you; no contracts would take these tokens in the first place owing to the complexity of processing chains of reversals.”
Similar worries about transaction reversibility and interoperability with decentralized apps have also been voiced by Roman Semenov, the creator of the approved privacy product Tornado Cash.
