Bonsai: A Recovery Approach for Ethereum ERC-20 Transactions

Abstract

Blockchain technology offers a mechanism for storing data with cryptographic links between blocks, creating a tamper-resistant ledger. Although this immutability ensures data integrity, it complicates recovery in cases of errors or intrusions. This work proposes Bonsai, an error and intrusion recovery system designed for token exchanges on Ethereum based applications. The system includes a custom ERC-20 token (BON) that maintains a one to one peg with ETH tokens while enabling transaction reversals through arbitration trials and an insurance mechanism to protect users against losses. Our experimental evaluation on Ethereum Sepolia and ZKsync Sepolia demonstrates that Bonsai can successfully trace and reverse token flows through up to five wallets in under 20 seconds, at an average cost of approximately ${\$}$0.30 on ZKsync. Existing blockchain recovery approaches are slow and costly, with reversal operations taking up to 126 seconds, and some may not be able to complete the reversal. The system provides a practical solution for blockchain applications requiring error and intrusion correction capabilities while preserving the authentication, integrity, immutability, and non-repudiation properties of Blockchain.