CypherSmith is solving wallet address reusability & anonymity problems

Problems

Reduced Privacy: When an address is reused for multiple transactions, it becomes easier for third parties to track and analyze transaction patterns associated with that address. This compromises the privacy of both the sender and receiver, as their transaction history can be inferred from the publicly available blockchain data.

Linkability: Reusing addresses enables outside parties to link multiple transactions to a single user or entity. By analyzing transaction flows and patterns, adversaries can gain insights into the financial activities of individuals or organizations, potentially leading to identity disclosure or targeted attacks.

Security Risks: Address reuse increases the risk of security breaches and unauthorized access to funds. If an address is compromised or associated with a vulnerable system, all subsequent transactions made using that address are susceptible to exploitation, putting users’ funds at risk.

Impact on Fungibility: Fungibility refers to the interchangeability of units within a currency system. Address reusability can impact fungibility by introducing tainted coins-coins associated with undesirable activities or histories. This can lead to discrimination against certain coins and undermine the fungibility of the entire currency system.

Solution

Wallet dApp which automates the process of stealth wallet creation and management. The dApp allows to generate stealth addresses on demand for an asset receiver using elliptic curves and ephemeral keys, referencing the ERC-5564 Proposal.

Stealth addresses are generated by asset sender but the private keys are available only for the asset receiver. It is not possible to tie the stealth address to asset receiver for an outside actor.

The general usage flow of the dApp is the following:

1. Receiver registers to the platform, generates stealth meta-addresses and stores them on-chain.
2. Sender fetches the stealth meta-addresses of the receiver from the chain.
3. Sender uses the meta-addresses to generate a stealth wallet address for the receiver and sends assets to them.
4. Receiver scans the announced transaction events and finds out which stealth wallets belong to them.

Challenges we ran into

Implementing cryptography methods for private data exchange.

Trying to concentrate while also chatting with nice people around the venue :)

MVP

URL: https://cypher-smith-2c2dbbd35078.herokuapp.com/

Smart Contracts

Registry: https://sepolia.etherscan.io/address/0xD3Bef33f23A173a9b3f25f68fdaec476bcD75f75#code

Announcer: https://sepolia.etherscan.io/address/0x75b5Ac7Fee622ebd4368cF97d8F8cAA2cde2A54A#code

Stealth: https://sepolia.etherscan.io/address/0xEb49229fB71F68a03E46f19Ffa7A72b8b312AB5d#code

Technology used

Web: NextJS, React, Chakra, Heroku.

Smart Contracts: Solidity, Hardhat