Researchers Propose to Implement ERC-20R/721R for Reversible Transactions
As an affiliate, we may earn from qualifying purchases. We get commissions for purchases made through links on this website.
Receive $10 in Bitcoin when you buy or sell $100 or more on Coinbase! https://mathisenmarketing.com/coinbase
Stanford researchers have come up with a solution to the problem of crypto theft. They have presented an implementation proposal for ERC-20R/721R to support reversible transactions.
Their research has shown that most thefts happen with strong evidence to prove the case. However, the transaction is rarely corrected because trades can be cancelled. Users end up on the losing side with their funds stolen by bad actors.
ERC-20R/721R brings balance and gives them a taste of justice by recovering their stolen funds. The operation is quite simple and requires the participation of a decentralized court of judges. The victim first makes a request after discovering that their funds have gone without their approval.
Requesting the freezing of funds means prohibiting the transfer of funds from the victim’s account to the bad actor’s account. Once the request is sent, it is entirely up to the decentralized court to receive the request to freeze the transfer.
Based on the vote, the judges will decide if the transfer should be suspended. If a larger amount agrees to a freeze, it will be enforced if there is strong evidence that the funds have been stolen.
ERC-20R/721R differs from ERC-20R, which requires members to apply a paper algorithm to track assets. Funds will be released if the judges vote in favor of this option.
The proposal has been put forward to spark debate in the blockchain community, which deserves a better mechanism to ensure the safety of its members. Improvements, changes and disagreements can be made to the proposal. Researchers will represent ERC-20R/721R at UC Berkeley on October 31, 2022 and November 1, 2022 at CESC.
It should be noted that the ERC-20R/721R proposal does not completely replace non-refundable tokens. It seeks to strike a balance between the two.
A user processing a transfer from their refundable account is subject to ERC-20R/721R, and a user processing a transfer from their irrevocable account is subject to a different process. In addition, researchers have thought that it may take a little time for the transfer to become irreversible.
For example, a transfer can be canceled for 3 days, after which it is irreversible. Users have 3 days to report the problem and have the transfer frozen by the decentralized court. In other words, the funds remain in the returnable account before transferring to the permanent account.
A similar idea was presented in 2018 when Vitalik Buterin, a talented programmer and founder of Ethereum, asked someone to develop Reversible Ether, which is backed by 1:1 ether. Vitalik Buterin also said that the DAO could return the transfer within a certain day.
Developed by researchers at Stanford, the ERC-20R/721R model takes his idea forward to improve the blockchain community.