Israeli crypto firm Ironblocks is leading a new security layer called Venn, which will vet blockchain transactions before they are executed, potentially preventing multimillion-dollar attacks and hacks.
Venn is a security product: its customers – lending protocols and more – will pay a small fee in exchange for what is essentially an extra set of eyes ensuring nothing suspicious happens on their books. But instead of one pair, many operators will look for fraud, says Or Dadosh, CEO of Ironblocks.
That’s because Venn will be a decentralized network, much like the blockchains that all DeFi protocols live on top of. It will consist of a series of node operators working together to reach consensus. While such operators on Ethereum and other blockchains add transactions to the chain’s economic history (the ledger), those on Venn will act as a gatekeeper and determine whether proposed transactions are too suspicious to get there.
Venn is the latest attempt to tackle crypto’s ever-present crime problem. Every week, projects large and small lose six figures or more to fraud, theft, economic attacks and other costly shenanigans that drain their customers’ crypto. All these transactions take place on the blockchain, where they are irreversible; there is no rewind button to return stolen money to a victim account.
Venn isn’t so much adding a ‘rewind’ button to the blockchain, but rather a ‘review and revoke’ feature. Transactions entered into it have not actually taken place yet, Dadosh told CoinDesk. They are on their way to finality – at least as long as they can get past Venn’s vetors.
Although Venn is not yet live, Dadosh explained in an interview how it will work. Real crypto users won’t necessarily be aware of Venn, as they don’t have to do anything special to be included in the network. However, if they use a protocol that is a Venn customer, a portion of their gas costs will be paid for monitoring their transaction for malicious activity through Venn.
Most transactions will (presumably) get through Venn just fine in about 100-200 milliseconds, much faster than the transactor would probably notice. This all happens in the background and privately, meaning there is no opportunity for bots to prepare trades or employ other controversial MEV strategies. Cleared transactions go to the main chain for execution.
But if Venn’s operators spot something suspicious about a transaction, they freeze it before it can be executed. Security teams are alerted and investigate the matter. In the meantime, normal transactions can continue unhindered.
“It’s about making sure that the assets themselves are protected from malicious transactions,” Dadosh said, “and making sure that no kind of malicious transactions are being done.”
Decentralized network
Venn will go to testnet in the coming weeks. The security of the network itself will come from the resumption; Venn is a so-called ‘actively validated service’ that receives the shared economic security of the EigenLayer ecosystem. Dadosh said Venn established well-known credit protocols as early customers, but demurred when asked which ones.
The customers, whoever they are, will have a high degree of autonomy in deciding which transactions to enter into Venn. They don’t necessarily drive every user-initiated action through the security layer, but they could.
Ultimately, customers will have the option to add additional security checks on top of the basic oversight that Venn will apply to all transactions passing through it, Dadosh said. These will be managed and offered by individual operators – the security companies that manage the nodes.
Within all of this is Ironblocks, the security company that Venn first conceived and organized, built and maintains. That said, Venn won’t be an Ironblocks product in the same way as his others are security products. The fees that Venn collects go to all its operators, of which Ironblocks is one.
Read more: Crypto security company Ironblocks is building ‘Firewall’ for DeFi protocols
Ultimately, Venn will be managed by a security council that will take charge of its operations, Dadosh said. When asked if Venn would issue a token – a common (and valuable) tool for crypto networks to distribute power among users – Dadosh said he couldn’t talk about it right now. But he said Venn will run a points program that will recognize network usage. Many crypto protocols use points as a precursor to token releases.
“The original idea was to create a prevention layer for malicious exploits and ensure it is in line with Web3,” said Dadosh.