Serai is a decentralized exchange which uses threshold signatures to sign transactions on external networks such as Bitcoin, Ethereum, and Monero. In order to create the keys signed with, Serai designed a one-round robust Distributed Key Generation protocol. This was a novel work which allows the necessary threshold of validators to create a new key while ensuring several critical properties.
Commonly, Distributed Key Generation protocols require all validators to be online to perform the protocol, enabling a offline single validator to halt all progress. Serai's Distributed Key Generation protocol is robust, ensuring any threshold of validators can generate a new key, even if some are offline or misbehaving. This is critical for Serai's ability to tolerate faults, as may occur within its decentralized set of validators.
The Distributed Key Generation protocol is premised on a novel form of Publicly-Verifiable Encryption, inspired by the recent work on exponent-Verifiable Random Functions. Publicly-Verifiable Encryption allows each validator to encrypt a share of the resulting private key to another validator and for anyone to then efficiently verify the encrypted message is as intended, without revealing anything else about it. This ensures that even if a validator is offline, and cannot decrypt their received shares of the private key to proactively confirm their correctness, that when the validator comes back online, they will be able to decrypt their shares and participate in signing sessions with the new key.
This work on Publicly-Verifiable Encryption was extremely notable as historical works made use of bit decomposition, splitting each share of the key into individual bits, before encrypting just one (or a few) bits at a time. This caused an encryption of a single share to require several ciphertexts to represent it. In contrast, our work only requires a single ciphertext, without introducing any new cryptographic assumptions other than the Decisional Diffie-Hellman assumption over an elliptic curve. Prior works which only required a single ciphertext used distinct cryptosystems and required much stronger assumptions for their security.
In our prior blog post about this, we noted how security proofs for our design had been written. Today, we're happy to announce our implementation has been audited by Least Authority, experts in cryptography and an ideal candidate for this work. The audit was facilitated by MAGIC Grants, an American 501(c)(3) which funds research and development of noteworthy projects in the cryptocurrency and privacy space.
We invite those curious to read the audit itself, but as a brief summary, two low-severity issues were found and resolved. Additionally, we would like to note Least Authority complimented our code's quality, a goal we strive for. Quality does not exist for quality's sake, but instead reduces the risk of bugs and unintended behavior, while enabling review, promoting the project's security and integrity. These properties are of the utmost importance to Serai.
Our implementation is positioned as a public good, eligible for use by anyone who needs an Distributed Key Generation protocol within their application. We hope others may find value in it and it can benefit the space as a whole, now that it's had the necessary external review to suggest such usage. It's built in Rust upon the generalized-bulletproofs library, as hosted by the monero-oxide project and originally intended for use within Monero's upcoming FCMP++ protocol upgrade. Accordingly, the generalized-bulletproofs library has itself been reviewed and audited, providing a strong base for us to rely on.
Serai will continue to have its code reviewed and tested, leading up to its next testnet which we hope is soon. If you would like to keep an eye, we welcome you to follow Serai on Twitter, or join our community via Discord or Matrix.