According to researchers at Stanford University, canceling Ethereum transactions may be a useful tool for blockchain technology. The reversibility of transactions makes it easy to track and reverse the theft in the blockchain network. They designed alternative token standards at the same level as ERC-20 and ERC-721, called these token standards ERC-20R and ERC-721R respectively, and supported reverse transactions. So, what does it mean to cancel the Ethereum transaction? What are ERC-20R and ERC-721R? First, let's understand what reversibility is.
1、 What is the reversibility of an exchange?
In an exchange, the exchange between two reversible tokens is instantaneous. If one party requests freezing, the funds can be withdrawn from the other party regardless of whether the revocable period has expired. However, the exchange of reversible tokens into irreversible tokens may only complete the exchange after the reversible time window has passed in order to protect itself from reversals. This means that the reversible → irreversible swap will be delayed until the funds are irreversible. Therefore, once several major tokens have added their own reversible versions, other tokens also have the pressure of reversible versions.
Depending on the implementation, you can immediately liquidate assets that have passed a reversible period of time (such as liquidating assets you received 3 days ago). In this case, there is no delay between your reversible and irreversible tokens.
2、 What are the reversible transactions ERC-20R and ERC-721R of Ethereum?
ERC-20R and ERC-721R mean the reversible transaction of traditional ERC-20 and ERC-721 tokens on the Ethereum network. These transactions are partially reversible, forming a somewhat mixed Ethereum network. The transaction allows a specific small window for error checking and allows contention after the transaction. For example, a three minute window allows the victim to request the freezing of stolen tokens.
The freeze request is made against the governance contract. The victim needs to provide evidence of malicious transactions and submit some tokens as pledge. The judge will then review the request and either accept or reject it.
Judges need to be decentralized and policies in place to ensure that there is no bias. When the freeze request is accepted, stop the disputed transaction by executing the freeze function.
However, ERC-20R and ERC-721R pose different challenges. Since ERC-721R represents an irreplaceable NFT transaction, it allows easy tracking of addresses and easy execution of freezing functions. However, for ERC-20R transactions, attackers can divide tokens into several addresses to avoid being tracked. In order to avoid the manipulation of freezing by criminals, freezing the execution of the entire transaction and the calculations on its chain.
The request for freezing may cause dispute, because if there is a dispute, the judge will ask both parties to provide evidence. The dispersed jury will decide whether to support or lift the freeze. When the rejectReverse function is called, the asset is released and the initial transaction is maintained.
On the other hand, when the victim wins the lawsuit and the funds are returned to the victim with the approval of the judge, the reverse function is called. A typical dispute resolution process takes about three days to complete.
This new proposal of Ethereum transaction cancellation sounds like a good choice for the blockchain ecosystem. Several blockchain and cryptocurrency projects lost funds due to network attacks. The ability to provide Ether holders with another kind of digital assets to counter malicious attacks and recover funds is a major progress in achieving blockchain efficiency.
Although this proposal seems to change the basic advantages of the Ethereum blockchain network, if the algorithm can successfully realize the reversibility of ERC-20R tokens, it may be a revolutionary innovation in the Web 3 ecosystem, which can save billions of dollars.
What is the reversibility of transactions? What are the reversible transactions ERC-20R and ERC-721R of Ethereum? The answer to these two questions. For blockchain projects, irreversible blockchain transactions have always been a double-edged sword. However, encryption theft without the possibility of reversal has been a major disadvantage. As we all know, the inability to change blockchain data has always been the core of its innovation, because it is regarded as a reliable source for obtaining verifiable data. However, making Ethereum transactions reversible may be a good step to curb cryptocurrency theft.