Example of Attack on CEX and the Framework of MinerGate Protocol

For the sake of imparting the clearest and the most visually understandable workflow of the protocol, it’s reasonable to sequentially order the theoretical process of adversarial attack on CEX and DEX.

  1. CEX 1 detects fraudulent transactions, resulting in a rapid outflow of funds to an unknown wallet.

  2. CEX 1 reports this incident to the MinerGate Protocol, which records it in MinerGate SC WalletID_1, the destination of the transferred funds.

  3. The MinerGate Protocol analyzes the transaction, using specified metrics to categorize it as either an approved address (WalletID_1) on the MinerGate SC or a rejected inquiry.

  4. If the address is on the MinerGate SC, the MinerGate Protocol sends WalletID_1 to the DATA provider to track and monitor future transactions from this wallet.

  5. The DATA provider, through Oracles, conveys information to the MinerGate Protocol about any new wallets receiving transactions from the source wallet, WalletID_1.

  6. The MinerGate Protocol, once again using metrics, analyzes these wallet addresses, categorizing them as approved or rejected on the MinerGate SC.

  7. Subsequently, the MinerGate Protocol shares wallet identifiers from the MinerGate SC with CEX_2 and DEX.

In a separate scenario, an illicit actor attempts to transfer fraudulent funds on CEX 2. Recognizing the threat posed by the wallet in question, CEX 2 takes precautionary measures by blocking the transfer. The unlawful actor also tries to engage with the address on DEX, but DEX rejects this attempt and may even block the wallet from conducting any transactions within its platform.

MinerGate empowers CEX to promptly notify its users about detected fraudulent activities through the Write Public Interface. With access to this information, CEX can not only proactively halt the flow of funds but also issue reactive alerts to users, advising them to temporarily refrain from using CEX services. This straightforward yet effective approach not only enhances CEX's credibility but also safeguards its users from potential exploitation.

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