Cardano Announces Major Security-Boosting Upgrade: Details

Input Output, the developer behind Cardano, has announced a major security-boosting upgrade called “Ouroboros Phalanx.”

The upgrade, which is in the final stages of testing, is meant to solve grinding attacks.

One of the leading proof-of-stake blockchains will also see an increase in efficiency following the implementation of the upgrade.

How grinding attacks work

The network randomly chooses who can get the best block. However, if someone controls a large amount of ADA tokens (more than 20%, for instance), they could end up rigging randomness.

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This could be achieved by rapidly testing different “random seeds” to secure the biggest number of winning slots. Nefarious actors could end up delaying transactions, censoring blocks, or double-spending.

New cryptographic puzzle

Phalanx makes it substantially harder to perform those grinding attacks, which are considered to be the most dangerous class of PoS attacks, by adding a verifiable delay function (VDF).

The cryptographic puzzle takes real time and computational effort to solve, meaning that there will be no shortcuts.
Hence, bad actors will no longer be able to “grind” through random possibilities instantly anymore: every attempt now requires doing actual heavy computation. With the new upgrade, attackers cannot cheaply manipulate the leader-selection randomness.

Notably, the randomness that decides who produces blocks now evolves over two epochs (around 10 days).

Apart from providing a higher level of security, the upgrade will also ensure faster transactions and much better decentralization.

Phalanx will be rolled out via a hard fork since core protocol changes cannot be rolled out with a simple parameter tweak.