Zero Trust Protocols (ZTPs): How They Work and Why They Matter

Zero Trust Protocols (ZTPs): How They Work and Why They Matter

June 16, 2024

Zero Trust vs. Castle-and-Moat

Zero Trust architecture is a modern approach to network security that emphasizes verifying everything and trusting nothing. This model ensures that every action, access request, and interaction is thoroughly authenticated and authorized, eliminating inherent trust.

The Castle-and-Moat model is an older approach to network security. In this model, a secure perimeter (the moat) is established around a trusted internal network (the castle). Once inside this perimeter, entities are granted extensive access without further scrutiny. While this model was effective in simpler network environments, it struggles to handle today's complex and interconnected digital landscape. The primary weaknesses of this approach are relying on the impenetrability of the "moat", and the assumption that threats are always external, overlooking the possibility of internal breaches or compromised credentials.

Zero Trust was developed to address the vulnerabilities of the Castle-and-Moat model. In Zero Trust, every entity, whether inside or outside the network, is considered untrustworthy until proven otherwise. This means that every action, access request, and interaction is subject to rigorous authentication and authorization processes.

Zero Trust in Web3: A Natural Fit

Zero Trust isn't new to Web3. Since Bitcoin’s inception, blockchain technology has used a Zero Trust approach. In blockchain networks, no entity is trusted. Instead, every user can independently verify every transaction, going back to the very beginning, ensuring the protocol has been followed correctly. This verification process eliminates the need to trust any authority, including the nodes running the network.

Zero Trust Blockchain Architecture

In a hypothetical scenario, imagine a blockchain named Castleum, designed with a Castle-and-Moat model. Here, validators would process transactions and update the blockchain state without user verification, creating potential vulnerabilities if the consensus mechanism were compromised. In contrast, Ethereum’s Zero Trust architecture requires users to sign transactions, and validators only include them in blocks after verifying their authenticity - which is verified by every user.

Comparing the Castle-and-Moat design of imaginary "Castleum" with Zero Trust of Ethereum

The Sovereignty and Honeypot Problems

As Web3 evolves, many blockchain networks have emerged, each operating within its own domain. While these networks maintain Zero Trust within their boundaries, challenges arise when interoperability between different blockchains is needed. The traditional approach to bridging these networks involves solutions that sacrifice the Zero Trust principle, reverting to a Castle-and-Moat model.

The “Sovereignty Problem” arises from the need to connect independent blockchain networks, necessitating trust in a third party to manage cross-chain interactions. This trusted entity (or entities) becomes a single point of failure, sacrificing the Zero Trust model. Additionally, these solutions create lucrative targets for attackers, known as the “Honeypot Problem.” The more assets controlled by such a solution, the greater the incentive for malicious actors to breach its defenses.

Siloed ZTPs

ZTPs are Web3 protocols that operate using a Zero Trust architecture. They require constant verification of every action, ensuring that no entity is inherently trusted. Within a siloed network, ZTPs are the Web3 standard, maintaining the Zero Trust model by ensuring that only native assets of that network are involved. This means that within a single blockchain like Ethereum, Zero Trust can be preserved for transactions involving assets that are native to that chain, enabling "Siloed ZTPs".

Consider Uniswap, a popular decentralized exchange on Ethereum, as an example of a Siloed ZTP. When a user wants to swap two assets native to Ethereum, such as UNI and ETH, Uniswap operates as a Zero Trust Protocol. The protocol inherits Ethereum's Zero Trust architecture, ensuring that every transaction is verifiable by all users.

A Siloed ZTP (Uniswap) operating as a CMP when interacting with wBTC.
* wBTC/ETH is currently the largest pool on Uniswap.

However, if a user wants to swap ETH and wBTC (Wrapped Bitcoin), the situation changes. wBTC is a derivative of BTC that relies on a centralized custodian (BitGo). In this case, Uniswap loses its Zero Trust nature because the security of wBTC depends on BitGo's Castle-and-Moat architecture, which requires users to trust BitGo rather than independently verifying transactions. This makes Uniswap operate as a Castle-and-Moat Protocol (or CMP).

Since users cannot interact directly with tokens from other networks (like BTC or SOL) within Uniswap, they must resort to derivative wrapped assets that rely on Castle-and-Moat architecture, making Uniswap a Siloed ZTP. That generally includes traditional cross-chain solutions such as bridges, cross-chain messaging, federated MPC.

A Castle-and-Moat architecture of cross-chain messaging solutions (e.g. Wormhole, LayerZero etc.)

2PC-MPC: The Future of ZTPs

To create ZTPs that aren't siloed to the network they're deployed on, the dWallet Network uses advanced cryptographic methods to maintain Zero Trust across different networks. The dWallet Network’s 2PC-MPC cryptographic protocol enables ZTPs that operate across various blockchain ecosystems without compromising their Zero Trust principles. By cryptographically requiring user participation, dWallet ensures that every action is verifiable and one is trusted.

2PC-MPC is a cryptographic scheme that allows two parties (in this case, the user and the dWallet Network) to jointly generate a signature to any network, and involves hundreds to thousands of decentralized nodes, making it a non-collusive and massively decentralized system. The participation of the user ensures Zero Trust, and the participation of the dWallet Network enables enforcing logic by a protocol, creating the infrastructure for ZTPs.

2PC-MPC Zero Trust Architecture

How ZTPs Work

  1. User and Network Participation: For any transaction or action to be validated, both the user and the dWallet Network must participate. The user's involvement is crucial for generating the necessary cryptographic signatures.
  2. Decentralized Verification: The dWallet Network comprises a large number of nodes that work together to verify the user's input and the transaction details. This decentralized verification process ensures that no single entity can control or manipulate the transaction.
  3. Cross-Chain Interactions: ZTPs allow for secure interactions across different blockchain networks. For example, a user can interact with assets on Ethereum and Bitcoin without compromising the Zero Trust model. The dWallet Network ensures that all actions are verified and authenticated across these networks.
ZTPs powered by dWallets can enforce logic and control native assets on any chain by generating signatures in a Zero Trust architecture

Real-World Applications of ZTPs

Vitalik Buterin has already expressed skepticism about cross-chain applications, primarily due to the inherent security limitations of bridges between blockchains, highlighting the risks associated with the Castle-and-Moat architecture of these connections, especially in the face of 51% attacks on a chain with weaker security, which can compromise native assets on chains with stronger security.

ZTPs are necessary for a multi-chain world that isn't reliant on Castle-and-Moat architecture, and projects utilizing dWallet technology showcase the practical applications of ZTPs, providing decentralized custody, multi-chain DeFi, and non-custodial wallet solutions.

This is especially meaningful when it comes to Bitcoin. With dWallets, builders on L1s and L2s can program native BTC as part of their ZTPs. No bridging, no wrapping. Any protocol - custody, DeFi, staking, gaming - can now be implemented using native BTC, without sacrificing Bitcoin’s Zero Trust architecture.

In this video from the “Bitcoin and Beyond” series, Omer Sadika discusses Zero Trust architecture, ZTPs, and how that connects to the Bitcoin ecosystem.

Conclusion

Zero Trust Protocols (ZTPs) are essential for maintaining security and integrity in a multi-chain Web3. By requiring continuous verification and eliminating inherent trust, ZTPs ensure that interactions across different blockchain networks are secure and resilient. The dWallet Network, with its 2PC-MPC cryptographic protocol, provides a robust foundation for implementing ZTPs, enabling secure interactions across any blockchain, and paving the way for innovative decentralized applications.

As we continue to explore the potential of blockchain technology, embracing Zero Trust principles through ZTPs will be crucial in building a secure and interoperable Web3 ecosystem. The dWallet Network stands at the forefront of this innovation, offering the tools and infrastructure necessary for a Zero Trust future.

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