Stanford University blockchain researchers Kaili Wang, Qinchen Wang, and Dan Boneh, have come up with a new proposal for transactions on Ethereum (ETH) – reversibility. The team argues that reversibility is necessary to combat thefts and exploits that have plagued the crypto industry.
The researchers have proposed two new Ethereum token standards, ERC-20R and ERC-721R. Both are prototype opt-on token standards and support reversing transactions when warranted. This means that it would not change the Ethereum token, but rather would be an optional feature in transactions. Nonetheless, the idea is not a finished concept, but is more inclined towards provoking discussions and debates. Kaili Wang took to Twitter and shared the idea.
If a user loses their funds, the new proposal will allow them to submit a freeze request to a governance contract. A decentralized court of judges will then hear the case and rapidly decide whether to grant or deny the request. In order for the judges to have adequate knowledge to render a just decision, both parties to the transaction would be able to present evidence. However, the process for freezing NFTs is relatively straightforward. Judges only need to see the account where the NFT is kept and freeze it.
Will Reversibility on Ethereum render the project useless?
Immutability is one of the core principles of crypto. Even the paper of the Stanford researchers admits so. Immutability means something that cannot be changed. It is impossible for any entity to alter, change, or falsify anything stored on the network thanks to immutable transactions. Immutability allows for a high level of data integrity because every past transaction may be audited at any point in time. Public blockchains’ immutability can improve the current system of trust and auditing. Due to how much easier or redundant it is to check information, it can cut down on the time and expense of audits.
Thus the new Ethereum proposal could most likely be a blow to the user base if reversibility becomes a thing of the norm. Although the feature is optional, the sender could enable the option, while the receiving end might not want that. Furthermore, such attempts at customer protection can be on exchanges and companies, and not on base layer blockchains, as said by Anthony Sassano.
However, the argument regarding thefts and exploits has to be taken seriously. But, there are other ways projects can tackle this problem. One way to do so is to have more code audits. Many times hackers exploit the system by looking for cracks in the open source code. Being open source, the code is visible to people outside the project team.