New Ethereum Tech Brings Security to Scalable State Channels

The Slavic god of lightning, Perun, is entering the ethereum ecosystem.

Inspired by bitcoin's lightning network, a group of researchers hailing from Warsaw have unveiled a new white paper entitled "Foundations of State Channel Networks," which outlines a protocol designed to help ethereum scale to support higher volumes of more complex smart contracts.

While a number of ethereum projects are building solutions for this problem, Perun's approach to its protocol is unique - namely in its focus on security, as it provides formal security definitions and security proofs for its protocol.

The difference here is that parties involved can register the current state of the contract at any time on the blockchain, enabling smart contracts to rewind channels to the last state at which parties agreed on terms.

"In case when two parties send conflicting states to the channel contract, the logic of the contract will select the latest state on which both users have agreed on," the paper reads.

"We are convinced that in the context of cryptocurrencies, a sound security analysis is of particular importance because security flaws have a direct monetary value and hence, unlike in many other settings, are guaranteed to be exploited."

Dziembowski told CoinDesk he and the team originally wanted to build a "Fair" file-sharing app on top of ethereum but were tripped up by critical issues soon into the process of developing that app.

A handful of scaling solutions have been put forth to the ethereum community since then, but the team at Perun actually found their inspiration from a different network altogether.

Luckily others had already started building on that idea through a technology known as "State channels" - whereby lightning is extended to ethereum's complex smart contracts.

Perun's paper merely continues this research by formulating a specification that outlines a bunch of requirements that any actual state channel implementation needs to secure itself against "Powerful adversaries."