Wrapped Token Recovery in Blockchain Systems
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Solution Overview
Problem
The immutability and irreversibility of transactions on blockchain systems create security risks, such as vulnerability to malicious attacks and the inability to recover tokens lost due to fraudulent activities, which negatively impact transaction security and trust.
Innovation Solution
Implementing recoverable transactions using wrapped tokens that can be in a recoverable, non-recoverable, or frozen state, allowing for reversal of transactions determined to be fraudulent or malicious by freezing and unwrapping tokens within a defined threshold time frame.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If transactions are made immutable and irreversible on blockchain, then trust and security between unknown parties are established, but the ability to recover tokens lost due to malicious attacks is lost
Solution Approach 1:
The patent segments tokens into wrapped tokens (which can be frozen and recovered) and base tokens (which remain immutable). This segmentation allows the system to maintain the immutability of the blockchain while introducing a layer of recoverability for specific token types, thereby resolving the contradiction between trust establishment and protection against malicious attacks.
Solution Approach 2:
The patent introduces wrapped tokens as an intermediary layer between users and the blockchain. These wrapped tokens can be frozen and unwrapped to reverse transactions, acting as a mediator that provides recovery capability while maintaining the underlying blockchain's immutability. This intermediary mechanism allows token recovery without compromising the fundamental trust model of the blockchain.
2Stability of the object's composition
If transactions are immutable on blockchain, then the blockchain serves as a source of truth, but transactions resulting from malicious attacks cannot be reversed
Solution Approach 1:
The patent introduces dynamic states for wrapped tokens (recoverable, frozen, non-recoverable) that allow the system to adapt transaction reversibility based on detected malicious activity. This dynamic approach maintains immutability for legitimate transactions while enabling reversal for fraudulent ones, resolving the contradiction between stability and harm prevention.
Solution Approach 2:
The patent changes the recoverability parameter of tokens based on transaction analysis. Wrapped tokens can transition between recoverable and frozen states depending on whether malicious activity is detected, allowing the system to maintain immutability for normal transactions while enabling reversal for harmful ones through parameter modification.
3Object-affected harmful factors
If wrapped tokens are introduced with recoverable states, then token recovery from malicious attacks is enabled, but transaction processing complexity increases
Solution Approach 1:
The patent extracts the recoverability functionality from the core blockchain transaction processing and places it in a separate wrapped token system. This extraction allows the main blockchain to remain simple and immutable while the wrapped token layer handles the complexity of freezing, unwrapping, and recovery operations, thereby reducing overall system complexity while maintaining recovery capability.
Solution Approach 2:
The wrapped token acts as an intermediary that absorbs the complexity of recovery operations. By placing freezing and unwrapping logic in this intermediary layer rather than in the core transaction processing, the system enables token recovery without significantly complicating the fundamental blockchain transaction mechanism.
4Reliability
If a threshold time period is implemented for transaction freezing, then automatic recovery of legitimate transactions is enabled, but time is lost in determining fraudulent transactions
Solution Approach 1:
The patent implements preliminary freezing of wrapped tokens upon transaction initiation, with the threshold time period serving as a preliminary verification window rather than a mandatory waiting period. This preliminary action approach allows legitimate transactions to be quickly confirmed while still providing time for fraudulent transactions to be detected and reversed, reducing the effective time loss for legitimate users.
Solution Approach 2:
The system implements feedback mechanisms that monitor transactions during the threshold period and can quickly identify fraudulent activity. This feedback allows the system to differentiate between legitimate and malicious transactions, enabling faster processing of legitimate transactions while maintaining the security window for detecting and reversing fraudulent ones, thereby reducing unnecessary time loss.
Data Source
AI summary
Certain aspects of the present disclosure provide techniques and apparatus for processing recoverable transactions on a blockchain. An example method generally includes receiving a request to execute a transaction on a blockchain to transfer a quantity of a wrapped token which encapsulates a base token exchanged in transactions on the blockchain. A running total of tokens in the receiver wallet that are in a recoverable state is incremented by the quantity of the token identified in the request. After a threshold amount of time from a timestamp associated with the received request, it is determined whether the transaction has been frozen. Based on determining that the transaction has not been frozen, the running total of tokens in the receiver wallet that are in the recoverable state is decremented, and a running total of tokens in the receiver wallet that are in a non-recoverable state is incremented.