Israeli crypto firm Ironblocks is spearheading a new security layer called Venn that will vet blockchain transactions before they’re executed, potentially averting multimillion-dollar attacks and hacks.
Venn is a security product: its customers – lending protocols and beyond – will pay a small fee in exchange for what’s essentially an extra set of eyes making sure nothing suspicious is happening on their books. But instead of one pair, they’ll get many operators on the lookout for fraud, says Ironblocks CEO Or Dadosh.
That’s because Venn is set to 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 that work together to reach a consensus. While such operators on Ethereum and other blockchains add transactions to the chain’s economic history (the ledger), the ones on Venn will act as a gatekeeper and determine whether proposed transactions are too suspect to get there.
Venn is the latest attempt to address crypto’s ever-present crime problem. In any given week, projects big and small lose six-figure sums or more to fraud, theft, economic attacks and other costly capers that drain their customers’ crypto. All these transactions happen on the blockchain, where they’re irreversible; there’s no rewind button to move stolen money back into a victim account.
Venn doesn’t add a “rewind” button to the blockchain so much as a “review and revoke” feature. Transactions being fed into it haven’t actually happened yet, Dadosh told CoinDesk. They’re on their way to finality – as long as they make it past Venn’s vettors, that is.
Though Venn isn’t yet live, Dadosh explained in an interview how it will work. Actual crypto 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’re using a protocol that’s a customer of Venn, part of their gas fee will pay for their transaction to be checked for malicious activity through Venn.
Most transactions will (presumably) make it through Venn just fine in around 100-200 milliseconds, much faster than the transactor would likely notice. All of this happens in the background and privately, meaning there’s no opportunity for bots to front-run trades or employ other controversial MEV strategies. Cleared transactions move on to the main chain for execution.
But if Venn’s operators detect something suspicious about a transaction, they’ll freeze it before it has a chance to execute. Security teams will be alerted and investigate the matter. Meanwhile, normal transactions will proceed to execution unimpeded.
“It’s about making sure that the assets themselves are protected against malicious transactions,” Dadosh said, “ensuring there is no kind of malicious transactions being executed.”
Decentralized network
Venn is scheduled to go to testnet in the coming weeks. The security of the network itself will come from restaking; 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.
The customers, whoever they are, will have a high degree of autonomy in deciding what transactions to feed 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 on top of the baseline oversight that Venn will apply to all transactions passing through it, Dadosh said. These will be managed and offered by individual operators – the security firms running the nodes.
Within all of this is Ironblocks, the security firm that first conceived of Venn and organized, built and maintains it. That said, Venn won’t be an Ironblocks product in the same way that its other security products are. The fees Venn collects go to all of its operators, of which Ironblocks is one.
Read more: Crypto Security Firm Ironblocks Builds ‘Firewall’ for DeFi Protocols
Eventually, Venn will be managed by a security council that will call the shots on 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 make sure it is aligned with Web3,” Dadosh said.
