The Bait on the Chain: Honeypots for Ethereum Security

Abstract

Blockchain technology is one of the most significant innovations of the 21st century, providing security and decentralization for many sectors such as finance, healthcare, and supply chain. One of its most famous applications is the Ethereum blockchain, which introduced smart con- tracts, self-executing code that allow the application of the terms of an agreement without the need for intermediaries. However, the growth of Decentralized Finance (DeFi) has also brought security challenges, as smart contracts are immutable once deployed and potentially vulnerable. The objective of this thesis is to evaluate the effectiveness of Ethereum smart contract hon- eypots. These contracts are designed to attract malicious users and collect information about their behavior. This thesis aims to compare different honeypot designs, analyze attacker behav- ior, and analyze the potential links between honeypot attackers and other malicious activities. To achieve these objectives, an innovative smart contract honeypot was designed and de- ployed along with other existing ones on the Ethereum blockchain. Additionally, a custom fund flow analysis tool was developed to track the flow of assets starting from attacker addresses, providing insights for analysis. The results of this study revealed an address that accumulated approximately 400 ETH through Freeway token transactions, which are accused of being a Ponzi scheme scam. In conclusion, this thesis shows that honeypots can be an effective tool for studying attacker behavior and contributing to the improvement of smart contract security.