Security infrastructure firm Firewall raises $3.7 million in pre-seed funding

Firewall, a blockchain security infrastructure firm, announced on Wednesday that it raised $3.7 million in a pre-seed round co-led by North Island Ventures, Breyer Capital and Hack VC.

As Firewall's first funding round, the money raised will be used to grow its current team of six full-time employees, develop its tech and bolster community building and marketing endeavors.

Firewall is developing a firewall solution for blockchain networks to prevent smart contract exploits. Unlike traditional network firewalls, which monitor incoming and outgoing transactions to identify threats using predefined security criteria, Firewall employs rollups — aggregating multiple transactions into a single batch — and "programmable transaction finalization rules" to intercept exploits before they are recorded on the blockchain. The "proof-of-exploit" consensus mechanism it is creating classifies smart contract exploits as “invalid state transitions” to be reversed.

"Blockchain consensus is meant to formalize social consensus into programmatic rules. We know it's already a social consensus that smart contract exploits shouldn't be accepted as valid state transitions, you see this clearly after every exploit," the firm's co-founder Devan Purhar told The Block. "Do people refer to the Kyber 'transactions' that netted $50 million? No, instead it's the 'Kyber exploit,' synonymous with theft. That's why we're updating blockchain consensus to correctly reflect this mechanically."