Open Grant: Transaction Screener for LIT Actions

[Pro-Wolf]

Open Grant Proposal: Transaction Screening Tool

Transaction Screener for LIT Actions:

Proposal Category: “Integration-adoption”

Proposer: Secxena

Do you agree to open source all work you do on behalf of this grant and dual-license under MIT, APACHE2, or GPL licenses?: "Yes"

Project Description

Value

Introduction:

In today's rapidly evolving digital landscape, the widespread adoption of blockchain technology and decentralized systems has revolutionized various industries, particularly in the realm of finance. With the advent of smart contracts, the execution of transactions has become automated, transparent, and immutable. However, alongside the numerous benefits of these advancements, challenges related to security and risk mitigation have also emerged.

Project Description:

This proposal outlines the development of a Transaction Screening Tool that will utilize the decentralized key management capabilities of Lit Protocol to provide a much-needed security measure for smart contract interactions. This tool will allow users to simulate the result of a Lit Action before execution, reducing the risk of scams and ensuring the desired outcome.

Objectives

The proposed tool will enable:

1. Transaction Simulation: Before a Lit Action's execution, users will be able to simulate the transaction. This will allow them to ascertain the transaction's legitimacy and predict its outcome.

2. Phishing Scam Prevention: By previewing the transaction's result, users can identify potential phishing scams, thereby preventing unwarranted loss of funds.

3. Educational Insight: This tool will also serve as an educational tool to help users understand smart contracts and the associated transaction signing process better.

Benefits of the Project:

1. Enhanced Security: By allowing users to simulate transactions before execution, the tool serves as an added layer of security. Users can identify potential scams, unauthorized activities, or malicious behavior, thus minimizing the risk of financial loss and protecting their assets.

2. Improved Trust and Confidence: With the ability to evaluate transaction outcomes beforehand, users gain a higher level of confidence in their interactions with smart contracts. This increased trust fosters broader adoption of decentralized applications and contributes to the growth and maturity of the blockchain ecosystem.

3. Educational Insights: The Transaction Screening Tool also serves as an educational resource for users. By providing simulation capabilities and detailed reports on transaction outcomes, users can deepen their understanding of smart contracts and transaction signing processes. This knowledge empowers users to make informed decisions and navigate the complexities of the decentralized finance landscape.

4. Seamless Integration with Lit Protocol: Leveraging the decentralized key management capabilities of Lit Protocol, the tool integrates seamlessly with existing infrastructure. This compatibility ensures a streamlined user experience, making it easier for users to leverage the tool's benefits while utilizing Lit Protocol's security features.

Risks Involved:

1. False Sense of Security: Although the tool aims to reduce the risk of scams and fraudulent transactions, it cannot eliminate all potential risks. Users should understand that transaction simulations are based on assumptions and may not account for all possible scenarios. Relying solely on the tool's results may create a false sense of security, and users should exercise caution and perform additional due diligence.

2. User Adoption and Understanding: The success of the Transaction Screening Tool relies on user adoption and their understanding of its purpose and limitations. It may require user education and clear communication to ensure users understand the tool's capabilities and potential risks. Failure to address user adoption and comprehension challenges could limit the tool's effectiveness.

3. Evolution of Smart Contracts and Protocols: The dynamic nature of the blockchain ecosystem means that smart contracts and protocols may evolve or undergo updates. This evolution can introduce compatibility issues or require adjustments to the tool to remain effective. Regular maintenance and updates are necessary to address changes in the underlying technologies.

Deliverables

1. Integrate with Lit Protocol: The tool will leverage Lit Protocol’s capabilities to manage distributed cryptographic key-pairs for condition-based encryption and programmatic signing.
2. Develop Simulation Engine: We'll develop a robust simulation engine capable of emulating the smart contract execution environment. It will take the transaction details as input and generate a detailed report outlining the transaction's probable result.
3. User Interface Design: We'll create an intuitive user interface, integrating the simulation engine. This will allow users to input transaction details and simulate outcomes with ease.
4. Security Measures: The tool will incorporate security measures, such as transaction data encryption, to safeguard user data and ensure privacy.
5. Testing and Validation: We'll perform thorough testing to validate the accuracy of the transaction simulations. Additionally, we'll conduct user testing to ensure the tool is user-friendly and meets user requirements.

Development Roadmap

Phase 1: Design and Prototyping (4 Weeks, $3k)

• Understanding LIT SDK and thorough investigation protocol built upon LIT
• Design the architecture of the system and create a prototype
• Develop core simulation engine backend to detect asset change
• At the end of this phase we will have core engine ready and unit tested

Phase 2: Development and Integration (6 Weeks, $3.5k)

• Define the user interface (UI) and user experience (UX) for the tool
• Code the tool's functionalities and integrate with Lit Protocol
• Develop the user interface and integrate it with the simulation engine
• At the end of this phase we will have UI ready and integrated with simulation engine

Phase 3: Testing (4 Weeks, $2k)

• Conduct rigorous testing of the tool to validate its performance
• Perform user acceptance testing and gather feedback for improvements
• This phase will focus on rigorously testing tool and covering all edge and corner cases

Phase 4: Deployment and Documentation (2 Weeks, $1.5k)

• Deploy the tool for use by the public
• Provide document and resources to help users understand how to use the tool effectively
• Provide post-deployment support and maintenance
• At the end of this phase we will have a tool production ready with education content

Please note, the timeline is an estimate and might change based on specific project requirements or unforeseen technical challenges.

Total Budget Requested

Budget Requested - $10,000 (Breakdown mentioned above as per milestone)

Maintenance and Upgrade Plans - $5K Annually

1. Regular Maintenance:
   • Bug Fixes
   • Security Updates
   • Performance Optimization
   • Protocol Updates
2. Feature Enhancements:
   • User Feedback Integration
   • Compatibility with New Smart Contracts
3. Upgrades and Scaling:
   • Scalability Considerations
   • Blockchain Network Upgrades
4. Education and Support:
   • Documentation Updates
   • User Support
5. Periodic Assessments:
   • Security Audits
   • Performance Evaluation

Team

WolfEdge Labs

Team Members

1. Mohak Agarwal
2. Apoorv Raj Saxena
3. Prosenjit Mukherjee

Team Member LinkedIn Profiles

1. https://www.linkedin.com/in/mohakagr
2. https://www.linkedin.com/in/apoorv-raj-saxena/
3. https://www.linkedin.com/in/prosenjit-mukherjee-54b2247a/

Team Website

1. https://www.wolfedgelabs.com/
2. https://wolfedge.capital/

Relevant Experience

In terms of prioir work, Mohak Agarwal has built ClayStack, which is a liquid staking protocol and has 3 public audits(without even any medium severity bugs). However, the team at WolfEdge is completely separate than ClayStack, but both are under his leadership with a combined experience of more than 20 years in the sector.

At WolfEdge labs, we have built a lot of stuff internally and have helped various L1s but now we want to build open source products. This would be our first open source grant and hence in the proposal we haven’t put any upfront payment, rather the first payment after a substantial milestone.

Additional Information

We learnt about this Grant Program from Blockworks. For any questions or queries you can drop a mail to "prosenjit.mukherjee@wolfedgelabs.com." We would love to get on a call and discuss any queries that you might have

[debbly]

Hey @Pro-Wolf, please read the guidelines for the open grant - we cap our grant amounts at 10K USDC.

Please update your proposal to fit into the guidelines!

[Pro-Wolf]

Hey @debbly , we have updated the milestones.

[debbly]

Hey @Pro-Wolf, at the moment we haven't seen a need for a tool like this. Appreciate the grant and write up - let's plan to revisit this in the future!

[Pro-Wolf]

Hi @debbly : Sure. However, this was one of the Ecosystem Proposal that your team had requested here. Let me know if you need any changes in the specification. Can work around the same.