03 Apr 2025

light mode

Stanford researchers offer reversible tokens

Stanford researchers Kaili Wang, Qinchen Wang, and Dan Boneh have proposed the idea of creating Ethereum-based reversible token standards called ERC-20R and ERC-721R.

On this page

They propose to extend the capabilities of the existing ERC20 and ERC721 standards by adding a reversing fraudulent transactions feature. According to the researchers, it will be possible to return tokens stolen by hackers thanks to the new invention.

A token standard is a set of rules that a smart contract must follow while creating an asset so that it is compatible with other tokens of this format and decentralized applications.

ERC20R and ERC721R combine smart contracts for the token itself and its management.

According to the creators, a managing smart contract should be controlled by “decentralized judges” who will decide whether to block a suspicious transaction. For example, a victim whose funds have been stolen can submit a freeze request to the managing smart contract by providing the relevant evidence.

At the same time, the victim must pay a “lawsuit” fee and provide remuneration to decentralized judges.  It is assumed that for an additional fee it would also be possible to increase the priority of cases. If a majority of the quorum votes in favor of the victim, the funds will be frozen and returned.

“If assets are stolen, they rarely simply sit in one place. Fraudsters move tokens from one wallet to another. They can even monitor the mempool and move the assets in a front-running transaction if they see a freeze request incoming. The algorithm we developed avoids this scenario by conducting the entire freeze (and its calculations) on-chain in one single transaction, so that the attacker can’t “outrun” the freeze,” writes Kaili Wang.

Criticism of the crypto community

The idea was met negatively by the cryptocurrency environment , despite the good intention to help reduce investor losses. In particular, people believe that the so-called “reversible tokens” do not meet the blockchain concept.

“This is an incredibly bad idea that won't work and against the entire point of cryptocurrency.” tweeted Kieran Daniels of the DeFi project Streams. 

Argent, the popular mobile crypto wallet, said that other mechanisms like multi-signature wallets and social recovery can help fix this problem.

Besides clashing crypto’s ethos, token reversibility could make it challenging to integrate with decentralized applications.

No contracts would accept these tokens in the first place due to the complexity of handling chains of reversals,

noted Matthew Di Ferrante, CEO of ZkLabs.

Roman Semenov, co-founder of Tornado Cash, has also raised similar concerns surrounding transaction reversibility and interoperability with decentralized applications.

The crypto community believes that it takes a long time to come up with a really thoughtful tool that protects from the hacking of wallets. And if that appears, then Ethereum reversible tokens will definitely not be such a solution. 

The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Actions based on this content are at your own risk. Always do your own research and consult a professional. See our Terms, Privacy Policy, and Disclaimers for more details.

Articles by this author
Neuralink Launches Human Trials for Brain Implants

Neuralink Launches Human Trials for Brain Implants

Neuralink has begun clinical trials of its brain-computer technology on individuals with disabilities. Participants will receive compensation for all expenses, including transportation.

Vlad Vovk
PayPal Adds Solana (SOL) and Chainlink (LINK) for U.S. Customers

PayPal Adds Solana (SOL) and Chainlink (LINK) for U.S. Customers

PayPal added Solana (SOL) and Chainlink (LINK) support for U.S. customers and U.S. territories, based on the company’s FAQ page.

Anahit Avetisyan
White House Tariffs: Because Two Numbers and a Calculator Are Apparently Enough

White House Tariffs: Because Two Numbers and a Calculator Are Apparently Enough

The latest US tariff policy trades economic complexity for simplicity, using trade imbalance as its sole yardstick—overlooking sectoral depth, existing tariffs, and services.

Anton Kryshtal
FDUSD Stablecoin Depegs Following Justin Sun’s Claims: Here’s What Happened

FDUSD Stablecoin Depegs Following Justin Sun’s Claims: Here’s What Happened

FDUSD lost its dollar peg and dropped 9% following Justin Sun’s claims about First Digital Trust’s insolvency. The company has denied the allegations and is preparing legal action, accusing Sun of defamation.

Dmytro Psevdonimenko
Sam Altman, ChatGPT, and the AI Spark That Lit Up Crypto

Sam Altman, ChatGPT, and the AI Spark That Lit Up Crypto

At the end of 2022, a public beta of an AI-powered product quietly launched. It looked like nothing more than a simple chat window. However, it turned out to be a global sensation.

Elina Moskovchuk
Hot Crypto Discussions on X Today: VPN Use, Trump Tariffs, and More

Hot Crypto Discussions on X Today: VPN Use, Trump Tariffs, and More

The crypto market faces a blow as Trump announces 10% tariffs on all countries, fueling economic uncertainty that impacts the financial sector.

Anahit Avetisyan
Hot on X (Twitter) Today: Binance Boycott, McCormack vs. Wright Case, & More

Hot on X (Twitter) Today: Binance Boycott, McCormack vs. Wright Case, & More

A “Boycott Binance” movement is trending on X/Twitter after multiple altcoins plunged on the exchange within minutes on April 1.

Anahit Avetisyan
What Are Assets? Differences Between Coins and Tokens

What Are Assets? Differences Between Coins and Tokens

Discover the meaning of assets in finance and crypto, and learn the key differences between coins and tokens to make informed investment decisions.

The Coinomist
What Is a Margin Call? An Essential Guide

What Is a Margin Call? An Essential Guide

A comprehensive guide to understanding margin calls in trading. Learn what triggers them, how they work, their risks, and strategies to manage or avoid them

The Coinomist
What Happens When Bitcoin Runs Out? Predictions and Strategies

What Happens When Bitcoin Runs Out? Predictions and Strategies

Explore what happens when Bitcoin reaches its 21 million supply cap. Learn how the shift from block rewards to transaction fees could impact miners, investors, and the entire ecosystem.

The Coinomist
What Does HODL Mean? Lessons for New Traders

What Does HODL Mean? Lessons for New Traders

Learn the meaning behind HODL and its significance in crypto trading. Understand its origins, the psychology behind holding on, and how HODLing can shape your long-term investment strategy.

The Coinomist
How to Scale a Crypto Exchange and Attract More Users Globally

How to Scale a Crypto Exchange and Attract More Users Globally

Imagine you’ve built your own crypto exchange, and now it’s time to scale. You’ll need high-speed infrastructure, deep liquidity, and compliance.

Vlad Vovk
The Top Cryptocurrency Scams to Watch Out for in 2025

The Top Cryptocurrency Scams to Watch Out for in 2025

AI, fake exchanges, celebrity deepfakes, and old tricks repackaged in new forms. Here’s a look at the cryptocurrency scams gaining traction in 2025 and how to avoid losing everything to fraudsters.

Vlad Vovk
Arthur Hayes Challenges Fed Independence in His New Essay “The BBC”

Arthur Hayes Challenges Fed Independence in His New Essay “The BBC”

In his latest essay “The BBC,” Arthur Hayes examines the emotional pressures on the Federal Reserve and the monetary policy challenges that could lead to increased liquidity in the crypto market.

Dmytro Psevdonimenko
Trump’s “US Crypto Reserve” Plan: A Game Changer or Just Talk?

Trump’s “US Crypto Reserve” Plan: A Game Changer or Just Talk?

It takes just one post from Trump to stir the crypto market. Recently, he announced on Truth Social that the evaluation of a strategic crypto reserve is in progress as part of his broader Trump crypto policy.

Anahit Avetisyan
MORE
Dubai Lets You Rent Homes and Cars With Bitcoin. Here’s What to Know

Dubai Lets You Rent Homes and Cars With Bitcoin. Here’s What to Know

Now, you can rent in Dubai with crypto, signing rental agreements using BTC, altcoins, or USDT for both short-term vacations and long-term stays as an expat.

Yara Zornell
Why Lisbon is Now Emerging as The Newest World’s Crypto Capital

Why Lisbon is Now Emerging as The Newest World’s Crypto Capital

Imagine a city of hills, narrow cobblestone streets, and fado music drifting from cozy bars. This is Lisbon, the capital of Portugal, now rapidly transforming into a modern crypto city.

Iaroslava Kramarenko
MORE