Kaili Wang, Qinchen Wang, and Dan Boneh of Stanford University have recently proposed Ethereum token specifications termed ERC-20R and ERC-721R. They were created as prototype opt-in token standards that allow for transaction reversal when the circumstances and evidence warrant it.
The paper, which was published on September 9 and detailed on September 24, calls for a blockchain "back button" or "undo button" in the event of a cyberattack or robbery. It cites the latest BAYC phishing scams, Poly Network attacks, Harmony Bridge compromise, and Ronin fraud as reasons for requiring a reversible transaction.
Back button for blockchain
There is a debate that reversible transactions conquer the purpose of a blockchain, but Wang clarified that the suggested standards are not designed to replace ERC-20 tokens or make Ethereum exchanges reversible. She confirmed that they "simply allow limited time windows post-transaction for thefts to be disputed and potentially restored."
Reversible tokens could be swapped, but only after the time window for transaction reversal closed, making them irreversible again.
In the hypothetical case of an opposite request, the victim of the hack or theft will first request that the governance contract on the stolen funds be frozen. The assets would then be frozen or not by a decentralized quorum of judges. If accepted, the freeze would be imposed, and evidence would be required to be presented to the judges in a 'trial' to begin the reversal.
If a hacker predicts a freeze on the exchanges, the research suggested performing the entire freeze on-chain in a single transaction "so that the attacker cannot "outrun" the freeze."
They did admit that deciding the panel of experts charged with making decisions on the suggested ERC-20R and ERC-721R tokens would be the most confusing part of the system.
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