VDFs are a relatively new cryptographic primitive that can protect systems relying on the generation of (pseudo) random values from manipulation strategies or attack.
Examples of everyday use cases include picking a lottery winner on the blockchain, as VDFs could help stop miners from intervening with a block hash to win the jackpot. Dan Boneh, one of the researchers who introduced the concept in a paper last June, explained that VDFs are a way to “slow things down verifiably.”
Protocol Labs says additional research is required to make them more robust, as it is still possible for malicious actors with custom hardware to break the security of the protocols that depend on VDFs. The team explained:
“This is an investment towards building publicly-verifiable randomness and VDFs as novel tools in the arsenals of cryptographers and decentralization projects.”
The blog post added that a successful outcome would be a big development in applied cryptography and distributed systems, noting that its use would apply beyond blockchain.
Protocol Labs and the Ethereum Foundation are planning to evaluate and co-fund grants to research the feasibility of developing optimized hardware for running a VDF. The blog post notes that this aims to help eliminate the “knowable uncertainty around the length of the verifiable delay based on the speed and quality of the hardware being used to generate it.”
A new website has been created to mark the partnership, and both organizations say they are open to hearing from academic institutions and manufacturers who want to get involved. A competition to research the fastest VDF construction is also in the pipeline.
In February, the Ethereum Foundation had denied that it was planning to spend $15 million on the development of VDFs for use in its transition to a proof-of-stake network. The amount of money to be spent in the development of VDFs with this new partnership is not disclosed.