Ethereum Foundation Releases First Report on “Trillion Dollar Security Initiative”
Yesterday (10th), the Ethereum Foundation officially published the first report of the “Trillion Dollar Security Initiative” through the X platform, titled Security Challenges Overview. The report covers six major aspects: user experience, smart contracts, infrastructure and cloud security, consensus protocols, monitoring, incident response and mitigation, as well as social layers and governance.
(Background: Ethereum’s new proposal: modular architecture + privacy enhancements to comply with EU GDPR data regulations, what are the features?)
(Additional Context: Vitalik’s remarks on the “Ethereum Year of Leap Forward Plan”: After L1 expansion, throughput will increase tenfold.)
The Ethereum Foundation announced last month the launch of the “Trillion Dollar Security (1TS)” initiative, aimed at ensuring that Ethereum can support billions of users securely holding over one trillion dollars of on-chain assets, and allowing businesses, institutions, and governments to confidently store and transact over one trillion dollars of value in a single smart contract or application, promoting Ethereum as a “civilization-level infrastructure” for the global economy.
On the same day (10th), the Ethereum Foundation released the first report of this initiative, Security Challenges Overview. This report outlines six key security challenges in the Ethereum ecosystem and lays the foundation for subsequent solutions to prioritized issues. The release of this report marks an important step for Ethereum in its pursuit of higher security standards.
0. Last month we announced the Trillion Dollar Security (1TS) initiative: an ecosystem-wide effort to upgrade Ethereum’s security. Today we’re releasing the first 1TS report: an overview of the existing security challenges in the Ethereum ecosystem. 
Detailed Analysis of Ethereum’s Six Security Challenges
According to the Security Challenges Overview report, the Ethereum Foundation has identified the following six key areas of challenges based on extensive feedback from users, developers, security experts, and institutions:
1. User Experience (UX)
The interface through which users interact with Ethereum is a core source of security challenges, as the atomicity (irreversibility) of transactions means that a single error can lead to significant losses.
- 1.1 Private Key Management: Users find it difficult to securely manage private keys; software wallet recovery phrases are often stored insecurely, while hardware wallets face risks of loss, damage, or supply chain attacks. Corporate users face even greater challenges due to personnel changes and compliance requirements.
- 1.2 Blind Signing and Transaction Uncertainty: Users often blindly approve transactions due to unclear data displayed by wallets, making them vulnerable to malicious contracts, phishing, scams, or front-end attacks.
- 1.3 Approval and Permission Management: Wallets are set to approve transactions indefinitely and have no expiration date, lacking permission management features, increasing the risk of malicious applications draining funds.
- 1.4 Compromised Web Interfaces: Web interfaces are susceptible to attacks such as DNS hijacking and malicious JavaScript injections, leading users to malicious contracts or signing misleading transactions.
- 1.5 Privacy: Weak privacy protections expose users to phishing, scams, or physical attacks. Institutional users require stronger privacy safeguards due to compliance or business needs.
- 1.6 Fragmentation: Different wallets lack consistency in transaction display and approval processes, increasing the difficulty for users to learn and heightening security risks.
2. Smart Contract Security
Smart contracts have become a major attack surface due to their transparency. Despite advancements in auditing and tools, vulnerabilities and development challenges remain.
- 2.1 Contract Vulnerabilities: Including upgrade risks, reentrancy attacks, unreviewed components, access control failures, complexity of cross-chain protocols, and new risks from AI code generation.
- 2.2 Developer Experience, Tools, and Programming Languages: A lack of security defaults in tools, uneven testing coverage, low adoption rates of formal verification, compiler flaws, and language limitations increase the difficulty of deploying secure contracts.
- 2.3 On-Chain Code Risk Assessment: Existing risk assessment frameworks are difficult to apply to smart contracts, making it challenging for institutional users to manage risks due to assumptions about code being mutable and centralized control.
3. Infrastructure and Cloud Security
The infrastructure that Ethereum relies on (such as L2 chains, RPC, cloud services) constitutes an attack surface, with centralization increasing the risks of disruption and censorship.
- 3.1 Layer Two Chains: The complexity of bridging assets in L2, errors in proof systems, and collusion risks among security councils could lead to loss of funds or freezing of assets.
- 3.2 RPC and Node Infrastructure: Reliance on a few RPC and cloud providers means that if they go offline or implement censorship, it could block user access.
- 3.3 DNS-Level Vulnerabilities: DNS hijacking, domain seizure, and phishing threats from similar domain names jeopardize secure access for users.
- 3.4 Software Supply Chain and Libraries: Open-source libraries are vulnerable to malicious package injections or dependency hijacking, becoming mediums for attacks.
- 3.5 Front-End Delivery Services and Associated Risks: If CDNs and cloud hosting platforms are compromised, they may deliver malicious front ends, affecting user security.
- 3.6 ISP-Level Censorship: ISPs or governments can censor Ethereum access through traffic blocking and DNS filtering.
4. Consensus Protocols
While Ethereum’s consensus protocols are stable, long-term risks need to be improved to enhance resilience.
- 4.1 Consensus Vulnerabilities and Recovery Risks: Edge cases (such as validator disagreements or network partitioning) could lead to consensus stalls or loss of validator funds.
- 4.2 Client Diversity: The diversity of clients protects the network, but low adoption rates of a few clients need to be addressed.
- 4.3 Staking Centralization and Pool Dominance: Liquid staking protocols and concentration among large operators could lead to governance capture or homogenization risks.
- 4.4 Undefined Social Slashing and Coordination Gaps: Lack of clear mechanisms to deal with malicious validators and the immaturity of social slashing processes remain issues.
- 4.5 Economic and Game-Theoretic Attack Vectors: Economic attacks, including wastage attacks, strategic exits, and MEV manipulation, have not been sufficiently studied.
- 4.6 Quantum Risks: Quantum computing could potentially break existing cryptographic techniques, necessitating early design of quantum-resistant solutions.
5. Monitoring, Incident Response, and Mitigation
Effective monitoring and response to security vulnerabilities are necessary, but existing challenges limit efficiency.
- Contacting Affected Teams: Difficulty in contacting attacked teams delays fund recovery.
- Issue Escalation: Cross-organizational coordination is challenging due to a lack of prior contacts.
- Response Coordination: Assistance from multiple teams can lead to confusion and reduce efficiency.
- Insufficient Monitoring Capabilities: Inadequate on-chain and off-chain monitoring complicates early warning efforts.
- Insurance Access: The crypto ecosystem lacks traditional insurance options, complicating loss mitigation.
6. Social Layer and Governance
The community and governance aspects of Ethereum face long-term risks that affect overall security.
- 6.1 Staking Centralization: Concentration of large amounts of staked assets could lead to governance capture, influencing forks or transaction review.
- 6.2 Off-Chain Asset Centralization: Holders of off-chain assets may influence the direction of the protocol, such as choosing to support specific forks.
- 6.3 Regulatory Attacks or Pressure: Governments or regulators may force key entities to review or intervene in protocols.
- 6.4 Organizational Governance Capture: Corporate acquisitions or reliance on funding may alter governance culture, undermining Ethereum’s neutrality.
Next Steps and Community Participation
The Ethereum Foundation stated that the next step for the 1TS initiative is to select the highest priority issues based on the report’s findings and collaborate with the ecosystem to develop solutions. To achieve the goal of “Trillion Dollar Security,” the Ethereum Foundation calls for broad community participation, encouraging users, developers, and institutions to submit feedback through [email protected], sharing uncovered issues, priority suggestions, or solutions.
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