ERC-20R and ERC-721R – crypto.news
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Stanford has launched two Ethereum project solutions to prevent theft and money laundering in the crypto space.
Inside something TweetKaili.eth, a member of Stanford, announced that the institution came up with the idea of reversible transactions on the blockchain network as a result of the recent increase in cryptocurrency thefts.
Kaili.eth also published a detailed account of how the team came up with a solution to prevent theft at an early stage and reverse adverse events for owners. The message indicated that the response would also transport the stolen funds before starting the reverse trade. This means that the owners of the addresses can potentially be found as well.
The Stanford team included Dan Boneh, Qinchen Wang and Kaili.eth. The team designed prototype tokens ERC-20R and ERC-721R to support the reversal of blockchain transactions. The team is also aware that reverse transactions on the network would undermine user trust in the blockchain, as this is one of the features that made the technology successful. The team emphasized via message that a reversal event is only triggered when the alleged victim provides sufficient evidence to show that the funds have been stolen or misused.
According to the Stanford team, the introduction of reversible tokens will not replace ERC-20 tokens or make Ethereum transactions fully reversible. That won’t happen because the entire purpose of the blockchain would be at stake. The project enables the reporting, investigation and cancellation of thefts in a short period of time. Stanford’s post explained:
“Now you might be thinking: Reversible tokens? Doesn’t that just defeat the purpose of the blockchain? Actually, no. It’s not meant to replace ERC-20 tokens or make Ethereum reversible – it simply allows for a short time after the event to deny theft and possibly restore it.”
Blockchain network transactions involving two prototype tokens (ERC-20R and ERC-721R) can only be frozen for three days before the transaction is sealed and the funds become irrevocable.
The turning process takes place in five different stages. First, the alleged victim requests the freezing of funds suspected of being stolen. The victims are asking for a management agreement with evidence attached and some accompanying stake funds.
Once a complaint is filed, the ruling judges may approve or deny the request depending on the nature of the transaction and the evidence provided by the victim. The judges approve or reject the freezing of funds by voting. This voting process may take no more than two days. The victim loses the bet if the evidence is assumed to be false. If the judges approve the request, the management token calls the ERC 20R and ERC-721R contracts “freeze”.
The third stage is the implementation stage. At this point, the contract tracks the stolen funds and prevents the processing of the funds.
The fourth stage involves a trial where both sides present their case to a jury for validation and decision. The end of the fourth phase begins the fifth phase, which is the reverse phase. The management contract initiates an event that directs funds to the victim’s wallet address, and the perpetrator suffers the consequences.