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Vitalik Buterin, Ethereum cofounder, has dropped a notable reaction to the recent $9.5 million exploit that zkLend suffered on the Starknet network. Buterin's update also shared insights into the workings of Railgun, a mechanism meant to address concerns about criminal activities in Web3.
Railgun spotlight: Key features
Notably, the activities of malicious actors in cryptocurrency have resulted in huge financial losses. These fraudsters have engaged in illicit transfers and even funded criminal activities using crypto payment channels.
Gamza KhanzadaevButerin says the Railgun is a privacy pool mechanism that would facilitate private transactions on Ethereum. However, it would not allow illicit funds to benefit from its anonymity.
For clarification, Railgun allows users to make confidential transactions using zero-knowledge proofs (ZKPs). This allows users to make fund deposits into Railgun and withdraw privately later.
The Ethereum cofounder explained that after a user makes a deposit, it undergoes an algorithmic check. Usually, this takes about 60 minutes. The essence is to determine if the source of the funds is linked to criminal activities – stolen or illicit funds.
Once the deposit scales the check, the user can withdraw privately.
However, where the Railgun check fails to clear the funds and flags them, the user can only withdraw back to the original address where the payment was made. This is to prevent criminals from benefiting from privacy and avoid asset seizure.
The highlight from Vitalik Buterin came as a response to a post from Threat Researcher Vladimir S. According to Vladimir, the zkLend attackers attempted to launder the proceeds through Railgun. However, the protocol checks returned the funds back, as it flagged the transaction as suspicious.
Ethereum community reacts to Railgun's features
Buterin also provides a fork alternative for developers who disagree with Railgun’s filtering rules. He says such individuals can create a separate privacy pool with different rules.
Godfrey BenjaminHowever, it must gain support for the new pool to perform optimally, or its anonymity benefit could turn out to be weak.
Experts say a key advantage of this Railgun privacy pool mechanism is that it prevents criminals from exploiting its confidentiality. Meanwhile, it ensures that genuine users enjoy private transactions.
The broader community has also expressed excitement and remains eager to explore the offering.
Vladislav Sopov
Denys Serhiichuk
Dan Burgin