A New Mexico State University professor has received a grant from the National Science Foundation to study ways to improve security in decentralized financial networks, also known as DeFi. Roopa Vishwanathan, an associate professor of computer science at NMSU, will lead research funded by a $600,000 NSF grant awarded in October. The project will span three years.
Vishwanathan and her team are focusing on enhancing the safety of transactions within DeFi platforms. These networks allow users to conduct financial transactions anonymously but face significant security challenges due to their complex technology and lack of regulatory oversight.
“This is basically a project about scaling blockchains in a secure way,” Vishwanathan said. “It’s specifically about a mechanism called a ‘payment channel network’ that is a well-regarded and popular way of scaling blockchains.”
DeFi systems have been identified as vulnerable to cyberattacks and operational errors because much of their technology remains unaudited. Vishwanathan’s group includes two Ph.D. students and one master’s student who are gaining practical experience through this research, which could help them secure positions in the growing DeFi sector.
Matheen Basha Shaik, who will soon complete his master’s degree in computer science at NMSU, described his ongoing work: “My research until now has focused on developing efficient and budget-aware frameworks for verifiable computation in smart grids to ensure trustworthiness and cost efficiency in data analytics tasks. As a next step, I plan to work on developing new cryptographic protocols that can be used across various application domains such as decentralized finance, smartgrids, etc.”
Kartick Kolachala, a Ph.D. student working with Vishwanathan, intends to continue his academic career: “My research focuses on exploring the applications of cryptographic protocols for frameworks and systems that address the scalability challenges of Layer-2 protocols, especially payment channel networks (PCNs),” said Kolachala. “I have developed frameworks that enhance routing efficiency, liquidity utilization and path validation for PCNs. Of late, I have been working on building efficient and verifiable data structures for cloud storage systems. My long-term goal is to join academia and continue pursuing research in the areas of decentralized finance.”
Vishwanathan emphasized the importance of collaboration between academia and industry: “We need to publish in the top-tier conferences and keep up with the latest research on the academic side, but that cannot be done in an isolated way,” she said. “We also have to keep up with what industry is doing, which is why it’s important to talk to industry partners that build payment channel networks. We engage with them to gain their perspective on the research challenges that we have identified.”
She expects outcomes from this project may benefit other sectors beyond finance: “Our goal has been to build cryptographic protocols that are of independent interest and could be used in a lot of applications,” Vishwanathan said. “It may be used for health care applications, maybe secure voting, maybe secure private information retrieval and database security beyond the scope of this project.”
