KYVE: A Layer1 for decentralized data validation, driving trusted data
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KYVE: A Layer1 for decentralized data validation, driving trusted data
Data manipulation has always been an attack vector for countless exploits on Web3 protocols, and it appears that this vulnerability cannot be eliminated in the short term.
Navigating Web3 tides with focused insights
Author: FarmerTuHao
Translation: TechFlow
Data manipulation has long been an attack vector behind countless exploits on Web3 protocols, and it appears that this vulnerability cannot be eliminated in the short term.
To address this, KYVE offers its own technical solution—here’s what I’ve learned.
KYVE is a Layer 1 blockchain within the Cosmos ecosystem built to solve data-related challenges. It enables developers to standardize, validate, and permanently store blockchain data streams.
Most importantly, data processed through KYVE becomes trustless, valid, and reliable—achieved through decentralized data validation.
Why do we need reliable data?
A prime example is the recent exploit of Mango Markets, where manipulated data was fed into the protocol via its price oracle:
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The attacker opened large perpetual long positions in $MNGO on Mango Markets.
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Then purchased substantial amounts of $MNGO on centralized exchanges (CEXs).
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The price oracle relayed the surge in $MNGO's price to Mango Markets.
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The price of $MNGO on Mango Markets spiked 4-5x almost instantly.
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The attacker's long position became highly profitable—allowing them to borrow assets worth $100 million from the platform.
If the data from the price oracle had been validated by KYVE before reaching Mango, this exploit could have been prevented.
To understand how KYVE works, you first need to know its components. This diagram provides an excellent overview:
In KYVE, there are two types of validator nodes: chain-specific and protocol-specific.
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Chain-specific nodes are common across all blockchains—they maintain blockchain operations, such as Orbital Command’s node on Terra or LUNCDAO’s node on Cosmos.
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Protocol-specific nodes are KYVE’s killer feature!
Unlike chain validators, these nodes specialize exclusively in data validation. Protocol-specific nodes exist within KYVE pools. Data pulled from sources enters a KYVE pool, where protocol nodes upload and validate it.
Once validated, the data is sent to Arweave for permanent storage.
Similar to how blockchain validators earn rewards, KYVE’s protocol nodes also receive rewards paid in $KYVE for validating data.
These rewards are funded directly by sponsors.
Because KYVE can leverage various storage solutions like Arweave, the validated data becomes permanent, immutable, and retrievable.
Sei Network recently announced a collaboration with KYVE. What does this mean for projects building on Sei and retail users like you and me?
For projects:
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Seamless and efficient access to always-available data.
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Enhanced security layer by leveraging valid and reliable data—on top of existing audits—reducing the risk of exploits.
For retail users, especially data analysts:
- Easier access to accurate and trustworthy data.
Conducting security audits for Web3 protocols has become standard practice and a baseline requirement.
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