Forta Network: Real-Time Threat Prevention and Compliance Middleware

Forta Network is a non-profit, community-owned protocol building essential infrastructure for a safer and more compliant cryptocurrency industry. It aims to provide real-time threat prevention and modular compliance middleware that can integrate directly into the transaction flow of any protocol or rollup.

Key Highlights:

* Forta is developing a decentralized and modular threat detection and prevention network.

* It introduces a novel cooperative economic model with pay-for-use gas and a flexible joint-liability scheme for efficient collective action against threats.

* The protocol will be governed by a DAO, ensuring transparent and community-driven decision-making.

Deep Dive:

As billions of dollars are transferred across decentralized protocols and applications, security and compliance remain some of crypto’s most pressing and unresolved challenges. High-profile hacks, exploits, scams, and rug pulls have plagued the ecosystem, resulting in almost $2.7 billion in losses over the past year.

From smart contract vulnerabilities and governance manipulation to compromised private keys, the range and sophistication of these incidents continue to grow alongside the industry itself. Despite ongoing advancements in protocol design and auditing standards, most security solutions are designed to be reactive rather than preventative, detecting issues only after funds have already been drained.

Enter Forta Network.

Forta is a non-profit, community-owned protocol building essential infrastructure for a safer and more compliant cryptocurrency industry. It aims to provide real-time threat prevention and modular compliance middleware that can integrate directly into the transaction flow of any protocol or rollup.

Forta's core product is the Forta Firewall, a dual-purpose system designed to both elevate security and help enforce compliance standards onchain—both critical features for institutional adoption. Forta Firewall is powered by a custom neural network (FORTRESS) that's trained on past, real transaction data and can simulate transactions in less than 50 milliseconds to assign them a risk score.

This model constantly evolves and learns as it trains off new transaction data. In testing, FORTRESS was able to detect over 99% of past hacks/exploits and had a false positive rate of less than 0.002%.

Each transaction is assigned a score from 0 to 1, with 0 being completely safe and 1 being highly likely malicious. The protocol that uses the Forta Firewall can set a threshold for the transactions it wishes to receive. For example, if a rollup sets the threshold at 0.5, all transactions that score 0.5 or higher will be blocked by the Forta Firewall and not executed.

Forta Firewall can be integrated in three ways:

1) As a network's RPC

An RPC endpoint serves as the gateway between users or applications and a blockchain network. It allows developers to read blockchain data or submit transactions without needing to run their own full node.

Forta can be integrated directly into a network's RPC to serve as an intermediary layer between the user and the network. Through this, it can screen transactions before they are sent to the sequencer and prevent malicious transactions from being executed.

2) Directly into a rollup's sequencer

A sequencer is a component in a rollup that orders and batches user transactions before submitting them to the underlying Layer-1 (L1) blockchain. Forta Firewall can be directly integrated into a rollup's sequencer, enabling it to filter out malicious transactions before they are executed on the network.

3) Using a proxy contract

Forta Firewall can also be implemented on smart contract-based applications. It is implemented using smart contracts by placing a proxy contract in front of a protocol's core contracts. This proxy intercepts incoming transactions, queries the Firewall for a risk assessment, and only provides an onchain attestation if it passes the predefined risk threshold.

It's worth noting that the transactions flagged by Forta Firewall are not permanently censored. Instead, they are delayed, and the user of the Forta Firewall (i.e., protocol) can then decide if the transaction should be executed or not. This allows for the possibility of overriding the Forta Firewall's decision in cases where it may have made a mistake or if the transaction is deemed important enough to warrant manual approval.

Furthermore, the transaction data is encrypted and only accessible to the relevant protocol. This ensures privacy and prevents third parties from being able to view the transactions.

For rollups aiming to serve enterprises or tokenize real-world assets, built-in compliance tooling is not just a nice-to-have; it's a prerequisite. Forta Firewall allows these networks to enforce compliance without relying on centralized intermediaries, creating secure and regulation-aligned onchain environments.

Forta Chain is a Layer-3 (L3) rollup launched in partnership with Conduit that will be used to support the Forta Firewall. It is powered by the Arbitrum Orbit tech stack, which allows developers to deploy customizable rollups leveraging Arbitrum's core technologies like Nitro while offering flexibility over