We are continuing our series of articles where we explain our Core Protocol’s essential pieces which make it an efficient tool to prevent hacks. We have covered Report Generation, Staking. Now we’ll introduce you to the Decision-Making Body in detail and only the Refund Process will remain.
In short, the objective of the Lossless Core Protocol is to provide an extra security layer in order to prevent fraudulent token movement and recover fraudulently taken tokens. This functionality is available to all the tokens that follow the LERC20 standard.
There are three main tasks that take part in the Core Protocol and one extra task that while it’s not essential, serves as a booster to provide more visibility and urgency to a certain report.
The three principal tasks can be broken down into:
- Report Generation
- Report Investigation and Solving
- Stolen funds refunding and Reward distribution
The extra step available to the community, while extremely useful, is not necessary for a report to be processed:
- Report Staking
Decision-Making Body
The Decision-Making Body investigates the reports and confirms their validity. Furthermore, it is in charge of returning funds to the rightful owner by verifying that the proposed refund wallet is correct.
The function performed by the Decision-Making Body is essential to the correct functioning of the Core Protocol.
The Decision-Making Body is composed of the following parties with equal voting power.
Security Committee Members
The Security Committee is a group of people from diverse sectors within the blockchain ecosystem. These members have the capability to vote and resolve reports as well as make decisions about where the stolen funds should be returned in case of a verified hack.
Each Committee member has an individual vote that results in a single vote for the whole group. If half plus one of the committee members cast a positive vote the whole committee is considered to have voted in favor of a report being correct.
Committee Members are rewarded for participating in the investigation and resolution of a report.
Token Owners
The Token Owner role is inherited from the LERC20 Token specified on a report. Meaning that only the admin of the reported Token is able to participate in the decision-making for that particular report.
The Token Owner has the capability of casting a single vote (i.e., same voting weight as the Security Committee) over a report as well as closing the report when the necessary number of votes have been reached. The Token Owner also is able to reject a refund wallet in case they do not believe that the refund wallet is correct.
The Token Owners (collectively) also refers to the adopters of the LERC20 standard. By adhering to the LERC20 standard, their Token is able to interact with and be protected by the Lossless Core Protocol.
Lossless Team
The Lossless Team is composed of a group of people with a technical background from the Lossless Protocol. It also has 1/3 of the vote in the Decision-Making Body.
The Lossless Team votes together with the Security Committee and the Token Owners on the outcome of a report being legitimate — if 2/3 of the Decision-Making Body cast a positive vote, the hack report is considered verified.
Report Investigation and Solving
While the report is active the Decision-Making Body will take on the task to investigate a report and vote on it.
In order to resolve a report two out of three parts of this group should agree and cast a vote. Otherwise, there won’t be enough votes to generate a decision. Likewise, if only two of the parties voted, one being positive and one being false, a third vote is needed to untie.
If the resolution fails during its lifetime, it will be solved negatively. Meaning that the reported address will be taken off the blacklist and it’ll be compensated with a percentage of the staked tokens. This is the same scenario as if the report gets solved negatively by having the majority cast a negative vote.
If the report gets solved positively, meaning that two-thirds of the Decision-Making Body cast a positive vote, the stolen tokens get retrieved automatically and the address gets permanently blacklisted.
This closes the report active period and the final steps of the workflow take place.
About Lossless
Lossless is the world’s first DeFi hack mitigation tool for token creators. Apart from Lossless’ known cyber security solutions and renowned professionals, the community also plays a role. With a tangible reward system, community members are also encouraged to explore new ways to detect hacks and fraudulent transactions.
Lossless protocol halts counterfeit transactions through various methods of fraud identification and automatically reverses any stolen tokens back to the original owner. Its solutions to the impending problems of cyber theft within the blockchain space are thorough and applicable within many protocols.
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