Daemon Protocol

Demo

About

The problem it solves ## 1. The Problem It Solves ### Blockchain Security & Compliance Made Accessible **DAEMON Protocol** addresses critical challenges in the blockchain ecosystem, particularly for users and institutions operating on **Lisk** and other EVM-compatible chains. ### Key Problems Solved **Wallet Risk Assessment** - Users can instantly analyze any wallet address on **Lisk**, Ethereum, and 15+ other chains to detect potential risks before interacting - Identifies connections to sanctioned entities, scam wallets, rug pulls, and phishing addresses - Provides real-time risk scores (0-100) with detailed explanations **Transaction Tracing & Visualization** - Interactive graph-based **Tracer** tool visualizes fund flows and wallet relationships - Helps compliance teams and researchers track suspicious transactions across the **Lisk network** - Makes complex blockchain data understandable through intuitive visualizations **AI-Powered Threat Intelligence** - Multi-agent AI system analyzes behavioral patterns, anomalies, and exploit signatures - Progressive streaming analysis delivers real-time insights as data is processed - Community-driven threat database continuously updated with new scam patterns **Smart Contract Security Auditing** - AI Audit feature analyzes smart contracts deployed on **Lisk Mainnet/Testnet** for vulnerabilities - Detects common exploits, reentrancy attacks, and security flaws before deployment - Helps developers build safer dApps on the Lisk ecosystem ### Who Benefits? | User Type | How DAEMON Helps | |-----------|------------------| | **Lisk Developers** | Audit smart contracts before deployment, verify wallet interactions | | **DeFi Users** | Check counterparty risk before swaps, lending, or staking on Lisk | | **Compliance Teams** | Monitor transactions, generate risk reports, meet regulatory requirements | | **Security Researchers** | Trace fund flows, investigate incidents, contribute threat intelligence | | **Crypto Exchanges** | Screen deposits/withdrawals for sanctioned or high-risk addresses | ### Lisk Integration Highlights - **Native Lisk Support**: Full integration with Lisk Mainnet and Lisk Sepolia Testnet - **Lisk RPC Endpoint**: Direct connection to `https://rpc.api.lisk.com` for real-time data - **Multi-Chain Analysis**: Compare Lisk wallet activity with other EVM chains - **Low-Fee Advantage**: Leverage Lisk's near-zero fees for frequent compliance checks ### Real-World Use Cases 1. **Before a DeFi Transaction**: Check if the liquidity pool contract on Lisk has any red flags 2. **Receiving Funds**: Verify the sender's wallet isn't associated with illicit activities 3. **Compliance Reporting**: Generate audit trails for regulatory submissions 4. **Incident Response**: Trace stolen funds across multiple chains including Lisk 5. **Due Diligence**: Research project wallets before investing in Lisk-based tokens

How it's made

Challenges we ran into ## 2. Challenges I Ran Into ### Multi-Chain RPC Integration **Problem**: Integrating multiple blockchain RPCs (including Lisk) with different response formats and rate limits caused inconsistent data fetching. **Solution**: Implemented a unified RPC abstraction layer with automatic retry logic, fallback endpoints, and response normalization. For Lisk specifically, we configured dedicated RPC connections to `https://rpc.api.lisk.com` with optimized polling intervals. ### Real-Time Streaming Analysis **Problem**: Processing large transaction histories while maintaining responsive UI was challenging. Initial implementation caused browser freezes when analyzing wallets with thousands of transactions. **Solution**: Implemented Server-Sent Events (SSE) for progressive data streaming. The backend now sends analysis results incrementally, allowing the frontend to render partial results immediately while continuing to process remaining data in the background. ### AI Model Token Limits **Problem**: Complex wallet analyses often exceeded LLM context limits, causing incomplete or truncated responses. **Solution**: Developed a two-phase approach: (1) Planning phase using a lightweight model to determine which tools to call, (2) Execution phase that summarizes tool results before sending to the main LLM. This reduced token usage by 60% while maintaining analysis quality. ### Graph Visualization Performance **Problem**: The Tracer tool struggled to render large transaction graphs (500+ nodes) smoothly, especially on mobile devices. **Solution**: Implemented WebGL-based rendering with `react-force-graph-2d`, added node clustering for dense areas, and lazy-loaded edge data. Also added zoom-based level-of-detail rendering to show simplified views when zoomed out. ### Cross-Origin MCP Server Communication **Problem**: Connecting to external MCP (Model Context Protocol) servers from the browser faced CORS restrictions, blocking tool execution. **Solution**: Implemented SSE-based MCP transport with proper session management. The frontend establishes an SSE connection to receive responses while sending requests via POST. Added automatic reconnection and session recovery for reliability. ### Wallet Detection Accuracy **Problem**: Distinguishing between different blockchain address formats (Lisk/EVM 0x addresses vs Solana base58 vs Bitcoin) led to false chain detection. **Solution**: Built a regex-based detection system with priority ordering. Lisk/EVM addresses (0x + 40 hex chars) are checked before Solana (base58, 43-44 chars) to prevent misclassification. Added secondary validation by checking on-chain activity when ambiguous. --- **Build on Lisk. Stay Safe with DAEMON.**