To mitigate any kind of risks, it is also important to secure the validator node address using techniques such as changing the payout address and implementing a multi-signature contract.
Payout address:
A payout address, also known as a reward address, is the Ethereum address where a validator node receives its rewards for validating transactions and participating in consensus in the network.
The benefit of changing the payout address for a validator node is to allow the operator to receive rewards at a different address. This can be useful for several reasons, such as:
Better fund management: Node operators can choose to receive rewards at a different address for better management of their funds.
Security: Node operators can reduce the risk of losing funds in case the original address is compromised.
Privacy: Node operators can choose to receive rewards at a different address to maintain privacy and separate their reward earnings from their other transactions.
Changing the payout address does not affect the node's ability to validate transactions and participate in consensus, but it will change the destination of the rewards received for participating in the network.
Change Validator Payout address
EWF recommend that all validators set a separate payout address so that block rewards are issued to another secure wallet (preferably a multi-signature one) instead of the node address itself.
If validator members would like to receive block rewards in an address separate from the validator node, please see instructions for calling the setPayoutAddress function in the Reward Contract for further details.
Please note that it is not possible to reallocate transaction fees to a separate account, so all validator nodes will accrue and maintain a small balance of EWT from transaction fees. Based on historical data, total transaction fee balances are expected to be <1 EWT per month.
Multi-signature contract
A multi-signature contract or multisig contract, is a type of smart contract in the Ethereum network that requires multiple signatures or approvals before certain actions like transferring funds can be taken.
There are several ways to create a multisig contract. One of the example is using Gnosis Safe.
Create Multi Signature contract address using Gnosis Safe
The benefit of using a multi-signature contract for a payout address is that it adds an additional layer of security and control to the management of the rewards. With a multi-sig contract, multiple individuals or entities must be involved in the decision to transfer the rewards, which helps reduce the risk of theft or unauthorized access.
Validator members can have cold storage wallet like hardware wallet, paper wallet for the changed payout address.
See the instruction here - How To Transfer EWT from a Validator Node
Importance to secure validator node and some best practice to secure it
In EnergyWebChain network, validator nodes are typically network's stakeholders and they are usually trusted organizations . These validator nodes are responsible for network consensus, verifying state transitions, validating transactions and adding them to the EWC blockchain.
Thus these validator nodes are responsible for maintaining the integrity of the network by ensuring that all transactions are valid. They also play an important role in preventing malicious actors from manipulating the network or adding fraudulent transactions to the blockchain.
There are several reasons to secure and protect validator node:
Validator nodes hold sensitive information, such as private keys, keystore file, secret etc which must be protected to ensure the security of the network.
Trust is a critical aspect of any blockchain network, and if a validator node is compromised, it can lead to a loss of trust in the network among its users and stakeholders.
If a validator node is compromised, it can potentially allow malicious actors to add fraudulent transactions to the blockchain, which can undermine the integrity of the entire network.
A secure validator node is important for maintaining the performance and scalability of the network, as it ensures that the network can handle a high volume of transactions without any issues.
Securing a validator node is critical to the overall security and integrity of the network, and it is essential to maintaining the trust and confidence of its users, members and stakeholders.
For these the validator members' must have infrastructure to protect the validators from any kind of attacks.
In EnergyWebChain (Proof of Authority) network, the validator nodes are run by recognized enterprises, organizations. These nodes are responsible for validating transactions and blocks. It's important to ensure that access to validator nodes is properly secured and controlled.
Limit access to validator nodes to only those users who need it, as this helps to prevent unauthorized access and reduces the attack surface. This can be achieved by using role-based access control (RBAC) and granting access only to users with specific job functions.
The principle of least privilege states that users should only have the minimum level of access necessary to perform their job function. This helps to prevent unauthorized access and misuse, as users are only able to access the nodes that they need to perform their job.
Monitor and log access to validator nodes, this helps to detect and respond to any suspicious or malicious activity, and to identify potential security breaches. Access logs should be regularly reviewed and analyzed to identify any unusual activity, such as repeated login attempts or attempts to access nodes that the user does not have access to.
Configure firewalls to block unauthorized access to validator nodes and restrict access to specific ports and IP addresses.
It is important to train employees on the importance of security and on the proper procedures for accessing validator nodes. This helps to prevent accidental security breaches and to ensure that employees understand the importance of following security best practices.
Securing validator nodes from an access perspective requires a combination of technical and procedural measures. By limiting access to only necessary users, using RBAC, monitoring and logging access, organizations can ensure that validator nodes are secure.
These are just a few of the many best practices that organizations can use to secure their validator nodes.
It's important to mention that, even following all the steps mentioned above, there's no guarantee that a validator node will never be compromised; it's important to have an incident response plan in place and to be prepared to take action in the event of a security incident.
Securing validator nodes in a on-premise environment or cloud platform is always a complex process. Here are some steps that can be taken to secure validator nodes:
Use virtual machines that have been configured to meet security best practices, such as using secure images, applying security patches, and limiting access to specific ports and IP addresses.
Take advantage of cloud-native security features, such as firewalls, intrusion detection and prevention systems, and encryption services, to protect validator nodes from external threats.
Firewalls can be used to block unauthorized access to validator nodes and to restrict access to specific ports and IP addresses, also control inbound and outbound traffic to validator nodes and to restrict access to specific ports and IP addresses.
It’s worth to note that validator node should listen only p2p port (30303); other than that node should not listen on any other port.
Use a virtual private cloud (VPC) to create a private, isolated network for validator nodes, which can help prevent unauthorized access or eavesdropping.
Use identity and access management (IAM) to control access to validator nodes and to ensure that only authorized users can access them.
Use monitoring and logging tools to track and record activity on validator nodes, which can help detect and respond to any suspicious or malicious activity.
Monitoring network activity can help detect and respond to any suspicious or malicious activity that may be targeting validator nodes.
Regular security audit helps to identify and resolve any security weaknesses or vulnerabilities of validator nodes.
Regularly updating software and applying security patches can help protect validator nodes from known vulnerabilities.
Use a cloud security provider to manage and secure validator nodes, which can help to ensure that they are configured and maintained in accordance with security best practices.
Follow Linux best practices like
Disable root login and password authentication for SSH
Disable non-essential SSH subsystems
Disable unwanted services and daemons
By following these practices, organizations can help prevent unauthorized access, reduce the attack surface, data breaches, and other security incidents and maintain the trustworthiness of the blockchain and ensure the security of their validator nodes.
It's important to mention that security in on-premise environment or cloud platforms is an ongoing process; it's worth to stay up-to-date with the latest security best practices and to continuously monitor and update the security of validator nodes.
EWF strongly recommends that your organization implements a robust internal governance process and security policy for managing the validator node private keys, accessing the node, and managing its EWT balance.