Nethermind

A protocol can pass a clean audit and still get drained months later. That's not the audit failing. It's the point where secure by design stops and runtime has to take over. An audit reasons about the code as written. Most of what breaks a live protocol shows up later: a governance vote that moves a parameter, a manipulated oracle, liquidity deep enough to fund an attack, a contract someone composes on top of yours next year. None of it is visible at rest. It only exists once the thing is running. So designing for security and watching it in production aren't the same job, and neither covers for the other. That's what we're getting into at Secure by Design, a roundtable lunch we're co-hosting with Hypernative during Blockchain Rio. Security leaders, protocol teams, and institutional builders at one table. Nethermind on audits and formal verification, Hypernative on real-time monitoring and response. Off the record, no panels, no pitches. Just people who own these calls comparing notes on where the design ends and the watching begins. Cristiano Silva will be there for Nethermind, alongside the Hypernative team. RSVP:

Positive update from Ethereum Institutional. This points to a broader alignment around a shared goal: institutional adoption of Ethereum. Nethermind has worked at the foundation of Ethereum since our founding, engineering the client software and core infrastructure the network runs on, and securing it through audits and formal verification. As EI focuses on bringing financial institutions to Ethereum, we focus on building the infrastructure they need to operate safely onchain.

Formalisation is becoming increasingly practical with advances in automated tooling, but correctness still depends on rigorous expert review. Nethermind recently contributed to refining the Ethereum Foundation's formalisation for the Grand MCA Challenge. During our review, we identified that an error in the original paper had also been carried over into the initial formalisation. Resolving it required careful analysis of the underlying definitions and propositions. The result reinforces an important lesson: formalisation is most effective when automated tooling is combined with human expertise. This work contributes to the broader goal of making formal methods more applicable to real-world systems and improving the trustworthiness of Ethereum's research ecosystem. We'll share a short technical blog with more details soon. Thank you to the Ethereum Foundation for supporting this work.

Nethermind has joined the ERC3643 Association, the standard that builds identity and compliance directly into the token lifecycle for regulated assets. Our work with it has focused on privacy: letting institutions prove regulatory requirements are met without unnecessarily exposing identities, balances, transaction histories, or commercially sensitive information. That focus carries into the rest of our work. Bringing FIX messaging onchain to tie tokenised securities into existing trading and settlement systems. And putting verifiable legal-entity identifiers onchain, so eligibility checks can read cryptographic identity rather than a whitelist maintained by hand. Across these initiatives, Nethermind is keen to support standards that help integrate tokenised assets with the identity, compliance, privacy, and market infrastructure institutions rely on.

Two proofs of concept, built by Nethermind and designed with UBS: a regulated institution can run its own compliance controls on Ethereum, tested end to end on Sepolia, without changing the network. One control, the Transaction Control Gate, checks every transaction against the institution's own rules before it broadcasts. The other, the Inclusion Control Gate, governs how approved transactions reach the chain and who processes them. Use one, the other, or both. The carousel walks through how each works.

AuditAgent flagged the inconsistency in a recent Nethermind Security audit. Figuring out why it mattered, and what it would have broken, took one of our auditors. That's where AI stops and judgment starts.

Privacy alone isn’t enough for regulated financial markets. Fully anonymous systems leave no way to enforce the controls institutions and regulators require. Financial institutions need to know that only authorized participants can transact, sanctioned users can be prevented from moving funds, and auditors can verify activity when required, all without sacrificing confidentiality. With Stellar Private Payments (SPP), we bridge that gap. We built a shielded pool on Stellar with compliance embedded directly into the protocol. Using Association Sets, only KYC-verified users can transact, frozen participants cannot spend their notes without revealing which notes they own, and selective disclosure allows users to prove a transaction, proof of funds, or tax-relevant information without exposing the rest of their financial history. In this second article of our privacy series we show that privacy and compliance are not opposing goals. By embedding compliance into the protocol itself, public blockchains can deliver both the confidentiality institutions expect and the regulatory controls they require. We built this in collaboration with the Stellar Development Foundation, who commissioned the work and entrusted us with developing SPP. The implementation is live on Stellar Testnet, fully open source, and featured on the PSE Private Transfers Dashboard.

Confidentiality is a real gap for institutions building on Ethereum, and it's good to see a dedicated team going after it with specs and security properties instead of a deck. We've been doing our own engineering work on the institutional side this past years - privacy is one piece of a larger set of open problems: compliance tooling, custody integration, settlement finality. No single team closes all of that. We're building in this space as well, and where there's overlap on specific technical problems, we're open to that conversation.

Teams are building their own security agents on AgentArena and testing them on real smart contract tasks. Nextrope's is running now. Independent agents on the same codebase surface issues a single tool can miss. That's the point of adversarial testing, and it's one layer of what full-lifecycle security takes. Nethermind Security: comprehensive audits, adversarial testing at milestones, AI baseline scanning in development.