How is the Chia Network pre-farm secured?

Fortunately, Chia has taken matters into its own hands. The new solution is based on custom hardware and the innovative Chialisp programming language. This combination has allowed the creation of the most secure wallet in the entire industry. Let's examine both of these aspects to explain how the pre-farm has been secured and how each of us can use a similar method to protect our own XCH.

Four secure wallets

The Chia pre-farm has been divided into four wallets. Two of them are located in Europe, and two in North America. The same pattern is used in all locations: 1/8 XCH goes to hot wallets, and 7/8 XCH goes to cold wallets. The wallets use the same tools but - crucially - different settings.

Chia Network's HSM computers are strategically distributed in North America and Europe. They are enclosed in Faraday cages, have no internet access, and no antennas. They are protected by private keys, which are used to authorize actions related to the pre-farm, including XCH withdrawals. Importantly, authorization requires multiple signatures. Remote signing is not possible (due to the offline mode of the HSM computers) - the person approving the transaction must scan the QR code from the "vault". This generates a digital signature for the transaction. Any modification automatically invalidates it. Even if someone stole the QR code or the signing device, they would not be able to steal the pre-farm itself. As long as at least one secure HSM computer remains, the pre-farm XCH can still be recovered. This is an excellent and reliable solution.

Cold and hot cryptocurrency wallets allow several different actions: XCH withdrawal, data re-encryption, and an increase in the so-called lock level. First, we will describe the settings for cold wallets, and then we will address the hot ones.

Cold wallets: withdrawals, re-encryption, lock level increase

For withdrawals from cold wallets, three out of five private keys are required to sign. Additionally, one overriding requirement must be met: at least 30 days must pass since the last operation. Only when these two conditions are fulfilled, the designated amount will be locked in the form of a "drop coin". For the next 90 days, these funds can be returned to the pre-farm if three keys sign such a transaction. If the coins are not retrieved during this time, the withdrawal will be finalized. The coins must be withdrawn to the originally specified address, which the hacker cannot modify in any way, and therefore, anyone can finalize the transaction without the involvement of third parties.

Regarding re-keying - a completely new set of private keys is created to control the pre-farm as a response to such a command. The range of modifications is wide: the total number of keys can be changed or the number of keys required for withdrawal. Re-keying will be useful when any of the original keys are stolen, copied, or simply lost. To initiate such an action, a meticulously defined protocol must be followed.

In the standard situation, re-keying requires a signature using three of the original keys, and at least 15 days must elapse since the last pre-farm-related action. If fewer than three keys were used for the signature, re-keying is still possible, but a time penalty is applied. The length of the penalty depends on how many keys were used - for example, in the case of a single signature, at least 90 days must pass since the last activity on the pre-farm. After enough time has passed, a new drop coin with zero value and a 30-day time lock on its withdrawal will be created. Cancelling it requires the same number of signatures as the keys used at the beginning. After 30 days, re-keying is finalized. The keys specified a month ago automatically become the new securing keys. Anyone can complete this action, just like in the already described withdrawal case.

By default, three signatures are required for withdrawals from cold wallets. How to increase the current lock level? Simply obtain four signatures, and from that moment on, all subsequent withdrawals will require exactly that number. In this way, the security of the pre-farm will be increased. It can be further increased by requiring signatures using all five keys, raising the requirements for future transactions.

Settings for hot wallets

As mentioned before, one-eighth of the pre-farm is secured using hot wallets. When it comes to security, they are similar to cold wallets - the only difference is the settings. Each wallet has three keys stored in HSM computers - two of them are needed for withdrawals. The period for potential withdrawal is 24 hours (similarly to the lock period for re-keying), the withdrawal lock applies only for an hour, and the time penalty for re-keying is 48 hours.

Best proof of security

Chia Network is deeply convinced that its solutions are the most secure in the industry. The network has proven this by placing its entire pre-farm on four custodial wallets. In the event of any security breaches, a complete crisis action plan has been prepared. If a criminal were to obtain copies of four out of the five keys to the cold wallet, the payment could still be recovered by increasing the lock level to five signatures. Re-keying would be enough to neutralize the thief. The entire pre-farm would remain safe even in the face of such a massive breach. Additionally, there are time locks, which would give Chia Network enough time to develop a new action strategy and avoid any harm.

Tool available to all farmers

At the same time, Chia Network has decided to release a tool for farmers to store their XCH in a secure location. For now, it only works in the command line, but it still seems to be a very good option for anyone who has been looking for a way to lock their funds.