How We’re Putting Security at the Heart of Energi
With the launch of Gen 3 finally complete, we want to share one of our latest innovations: our new governance-based security feature. This gives Energi powerful new capabilities against hackers and scammers. But before we get into how it works, let’s consider why security is so important not just for Energi, but the entire crypto space.
Why We’re Focusing On Security
Mt. Gox, The DAO, and countless other catastrophes. Large-scale hacks and scams have become defining events in crypto history, each leading to insurmountable losses for the individuals involved. In some cases, the life savings of entire families have been stolen. And this is still happening every day through smaller hacks and scams.
Massive hacks not only harm the user but the broader blockchain too — which leads to a dilemma: if a blockchain forks, this may return lost funds and stop the hacker, but what about the legitimate transactions that are rolled back too? If there is no fork, the hacker wins, and the victims lose.
There’s also a bigger question here: can a blockchain even endure multiple catastrophes like the DAO event and survive?
With Gen 3, we wanted to evolve the crypto space in the direction of user protection, which we feel is a critical aspect of mass adoption. Energi is thus evolving to give Masternodes governance power to propose and vote on freezing a malicious account and returning ill-gotten NRG to their rightful owners. This advanced feature will ensure hackers never have the upper hand while discouraging their attacks — since they’re much less likely to succeed. Ultimately, this feature makes Energi safer for users and precarious for bad actors.
How It Works
While anyone can submit a proposal to ‘blacklist’ an account involved in a hack or scam, ultimate decision-making power resides with our decentralized network of Masternodes. They, more than anyone, want a fair, stable, and secure system — and to avoid a boatload of NRG being dumped by a bad actor to crash the price. This would hurt everyone; not just the Masternode owners, but contributors and investors too.
When a blacklist proposal is submitted, the account in question is temporarily frozen. It’s then up to the Masternodes to vote on it. To make sure only valid proposals succeed, there are numerous checks and balances in place, such as a mandatory voting ratio. And by the end of the two-week voting period, a minimum of 10% of all active nodes must vote for the proposal to pass.
Once the voting deadline passes, there’s a final vote to decide what to do with the frozen funds. There are a few options:
A) Freeze for a more extended period.
B) Drain the wallet and return the NRG to their rightful owner(s), i.e. a victim in a case of a hack or to an exchange.
C) Revoke, which lifts the blacklist and unfreezes the coins.
In the case of a malicious event, the EBI and Energi Defense will confirm that a crime really has occurred and advise the best course of action. They will look into the validity of cases and determine the ownership of accounts and assets, acting as a ‘police department’ for the Energi ecosystem. All of their investigations will be funded by the Treasury — and the ultimate decision is still up to our decentralized network of Masternodes.
It makes sense that Masternodes should be the ones with this power; they have the greatest interest in the long-term success of the entire Energi project.
Security In Action
This model is already working. During the migration to Gen 3, we successfully prevented numerous thefts amounting to over 200,000 NRG. One such infamous scammer, known as “Bashful,” was involved. Bashful has previously defrauded our users by imitating Energi Core team members. He is also guilty of thefts from many other users from other cryptocurrency projects. After scamming a user, he would go on to dump his stolen assets for BTC. This amount of enormous dumping could have majorly dampened the excitement around this crucial milestone, not to mention, destroy the lives of the victims. With credit to our skilled team, we were able to prevent the scammers from selling their stolen NRG, and are now all in the recovery process.
Currently, this feature is only designed to handle large crimes — that is, more than 5,000 NRG — but eventually we aim to expand this functionality for smaller-scale incidents as well.
For us, this is all part of good governance, and it’s another way we’re leading the entire crypto space forward. If you want to follow the Energi journey, get involved below.👇
Until next time!
The Energi Team
