Research by Northeastern’s Ben Weintraub reveals vulnerabilities in Ethereum rollups, showing potential for $2M in profits from predatory trading tactics.
Ethereum, a decentralized online platform that allows users to conduct financial transactions in Ether cryptocurrency, prides itself on the system’s high security.
But new findings from Northeastern University’s computer scientists and researchers at ETH Zurich, a public research university in Switzerland, show that it might not be so bulletproof, and its users might be susceptible to some market participants’ predatory practices.
“There are direct monetary incentives,” says Ben Weintraub, a Northeastern doctoral student in the Khoury College of Computer Sciences. “So in my view, it’s better if researchers find and publicize it first before people mistakenly lose money.”
Weintraub presented the paper on the findings at the Association for Computing Machinery’s annual Conference on Computer and Communications Security.
He and his co-authors conducted a large-scale analysis of exploitative trading activities on Ethereum itself and across so-called rollups, or off-the-platform services that allow faster processing of higher volumes of transactions.
The researchers found evidence that certain actors can manipulate the market on rollups, which was previously thought to be impossible.
“It was known to be possible on regular Ethereum, but it was thought to be impossible on rollups and we showed that it is not impossible,” Weintraub says.
The paper presents three novel types of attacks in which predatory traders could have made about $2 million in profits in the last three years by manipulating transactions within Ethereum trading networks.
Ethereum is a network of independent computers across the world that follows the Ethereum protocol — a set of rules on how the computers in the global…
Read More: New Research Finds Vulnerabilities in Ethereum Rollups
