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Cardano, one of the leading proof-of-stake blockchains, has he announced a major security-enhancing upgrade called “Ouroboros Phalanx”.
The upgrade, which is in the final stages of testing, is supposed to solve grinding attacks.
How grinding attacks work
The network randomly selects who can get the best block. However, if someone controls a large amount of ADA tokens (for example, more than 20%), they can end up manipulating the randomness. This can be done by quickly testing different “random seeds” to ensure the greatest number of winning slots possible. Criminal actors could end up delaying transactions, censoring blocks, or double-spending.
A new cryptographic puzzle
Phalanx makes these grinding attacks, which are considered the most dangerous class of PoS attacks, significantly harder to perform by adding a Verifiable Delay Feature (VDF).
Solving a cryptographic puzzle requires real time and computational effort, which means there will be no shortcuts.
So, bad actors will no longer be able to instantly “bite through” random options: each attempt now requires real hard calculations. With the new upgrade, attackers cannot cheaply manipulate the randomness of leader selection.
Notably, the randomness that decides who produces blocks now evolves over two epochs (around 10 days).
In addition to a higher level of security, the upgrade will also ensure faster transactions and much better decentralization.
Phalanx will be launched via a hard fork, as changes to the underlying protocol cannot be implemented through simple parameter tuning.
