Security

Date: December 6, 2024

Overview

ParaFi Technologies maintains a comprehensive security framework designed to protect the confidentiality, integrity, and availability of our systems and information. We implement defense-in-depth across physical facilities, identity and devices, networks and platforms, cryptography and key management, and on-chain operations. Controls are aligned to recognized standards and applicable regulatory expectations, and are overseen jointly by ParaFi Technologies operations and ParaFi’s dedicated cybersecurity and compliance teams.

Facilities & Physical Security

Validator and supporting infrastructure are hosted exclusively in audited colocation facilities that hold SOC 2 Type II and ISO/IEC 27001 certifications. These sites enforce layered physical controls including staffed 24/7 security operations, badge plus biometric access, mantraps, visitor escort and logging. Critical components are distributed across multiple facilities and power domains with redundant networking and out-of-band management.

Cryptography & Key Management

Sensitive signing operations are isolated behind remote signers running in trusted execution environments, with threshold or quorum-based approval for high-risk actions where applicable. Validator hot keys are never present on validator hosts. Key generation, backup, and recovery procedures follow documented best practices and utilize air-gapped computers.

On-Chain Controls & Transaction Risk

On-chain interactions use well-audited contracts and client configurations. Transactions and validator operations are subject to policy checks and simulation where appropriate. We monitor chain-level health, peer connectivity, finality, and reward effectiveness in real time, with 24/7 alerting and documented incident response. Where networks expose exit or unstake operations, we track user-initiated requests live and keep a tightly scoped, access-controlled set of pre-signed exits to facilitate safe, timely handling without expanding signing surface.

Identity, Devices, and Access

All workforce access is gated by single sign-on with phishing-resistant multi-factor authentication, such as FIDO2, where available. Device posture is enforced through MDM with full-disk encryption, endpoint detection and response, secure boot, and remote-wipe capability. We operate a zero-trust network architecture with default-deny policies, service-level allowlists, and segmentation between roles such as validators, telemetry, and build systems. ParaFi’s cybersecurity team administers identity lifecycle management, periodic access reviews, and mandatory security awareness training.

Governance, Assurance, and Continuous Improvement

Security governance is integrated with ParaFi’s enterprise functions. The cybersecurity and compliance teams provide policy management, regulatory mapping, vendor due diligence, third-party risk reviews, and incident coordination. Controls are re-evaluated as threats and best practices evolve to sustain a resilient, measurable security posture over time.

Non-Custodial Staking & User Control

ParaFi Technologies operates strictly non-custodial staking. Delegations are made through native protocol mechanisms or audited contracts where applicable, and assets remain under your control at all times. Unstaking and withdrawals are executed according to each network’s rules and timelines, such as exit queues, epoch boundaries, or validation windows. Our validators cannot move client funds; our mandate is to run reliable, secure infrastructure that maximizes rewards within those protocol constraints.

Ethereum

Ethereum carries slashing risk for double proposals and conflicting attestations, so our controls are built to prevent slashable conditions. Validators utilize Web3Signer with a single, authoritative slashing-protection database across all keys. This enforces one-signer-of-record semantics across regions and ensures that automated or manual failovers do not create duplicate duty execution. Access to signers is restricted behind zero-trust network policies and hardened identity; validator hosts never hold hot keys.

Operations deliberately prefer safety over speed. Health-gated promotions and conservative failover logic ensure we would rather accept short, controlled downtime than risk a slashable event. We maintain client diversity across the fleet with multiple beacon and execution clients online at all times. Distributed Validator Technology is also used for certain validators to split responsibilities across independent nodes with threshold signing.

We keep exit operations tightly scoped. Where possible, a limited number of voluntary exits are pre-signed and stored offline with strict workflows for broadcast; in parallel we monitor for protocol-initiated exits and withdrawals to ensure timely handling without widening the signing surface. This approach has yielded a track record of zero slashing events and performance in the top decile on public dashboards.

Solana

Solana does not implement slashing today; the primary performance risk is validator downtime, which directly reduces vote credits and delegator rewards. Our design targets uninterrupted participation across epochs. The primary validator runs on bare-metal, low-latency colocation optimized for sub-millisecond latency to Jito to minimize propagation delays. A hot-standby instance continuously tracks ledger state and acts as a failover when the primary validator is offline or undergoing maintenance. We enforce single-active identity to prevent conflicting gossip or duplicate voting.

Maintenance and upgrades are planned around leader schedules and epoch boundaries where feasible. Continuous alerting feeds a 24/7 on-call rotation for incidents across vote credit accrual, slot progress, peer connectivity, and more. The result is consistent vote credit accrual across epochs and stable APY for delegators. Live performance metrics are published for verification at parafi.tech/solana/staking.

Avalanche

Avalanche relies on validators remaining online and responsive for the vast majority of their validation window to earn rewards; the protocol requires at least 80% uptime and does not use slashing. We engineer to materially exceed the requirement. Validators are deployed across multiple facilities with continuous monitoring of peer counts and consensus participation. Observed uptime regularly exceeds 99%, providing ample margin above the reward threshold and minimizing risk that transient incidents jeopardize rewards.