Transaction Simulations: Enhancing Blockchain Security
written by: Tiago Assumpcao
Have you ever approved a blockchain transaction without fully understanding its outcome? Whether you're an individual user, a DeFi protocol, or an exchange, you're not alone—many participants operate without full visibility, trusting the process and hoping for the best. Transaction simulations aim to change that by predicting outcomes before they're submitted to the network.
The Preview Layer for Blockchain
Transaction simulations function as preview environments for blockchain interactions. They show you transaction results without executing them on-chain – no gas fees spent, no permanent changes made.
This technology isn't just a convenience feature. It's becoming an essential security layer in our blockchain ecosystem.
Why Transaction Simulations Matter
For users, simulations reveal hidden behaviors before irreversible transactions are included in the blockchain. I've seen how this predictive capability can prevent significant losses.
The benefits extend throughout the ecosystem:
Wallet providers can display risk assessments before you approve anything
Exchanges can validate transaction intent and transaction parameters prior to signing
DeFi protocols can test complex operations for unexpected outcomes
Transaction simulation infrastructure providers can offer robust models to support the ecosystem
In blockchain's irreversible environment, this preview capability provides critical protection.
The Challenges We Face
Despite their value, transaction simulations have limitations I've encountered firsthand:
Simulation engines sometimes produce inaccurate results
Different blockchain environments create inconsistent outcomes
Some contracts can detect when they're being simulated and alter behavior
Over-reliance without fallbacks introduces new vulnerabilities
Who is Impacted: A Cross-Section of Our Community
What makes transaction simulations particularly interesting is how they affect the same diverse stakeholders that make up Crypto ISAC's membership:
Exchanges and custodians The Bybit Safe{Wallet} incident demonstrated how front-end manipulation attacks can occur—risks that proper simulation integration might help detect or prevent
DeFi protocol teams navigate time-of-check versus time-of-use scenarios where conditions change between simulation and execution
Wallet providers balance enhanced user experience protection with new dependencies on simulation services
Tokens and Stablecoins can simulate transfer, approval, or supply change behaviors before signing—particularly for stablecoin operations run by automated agents or scheduled systems
Security researchers continuously identify edge cases before they can be exploited
This cross-functional representation within Crypto ISAC creates an ideal environment for evaluating simulation technology from multiple perspectives.
Why I Joined Crypto ISAC
I joined Crypto ISAC after recognizing that blockchain security challenges require collaborative solutions. No single organization can address these complex problems alone.
At Crypto ISAC, I found a community where industry participants share insights and work toward common security goals. The collective expertise here enables us to tackle vulnerabilities that would be impossible to address in isolation.
What I value most is how Crypto ISAC bridges traditional security approaches with blockchain-specific challenges. Transaction simulations are just one example of how we're developing new security paradigms for this evolving landscape.
Our upcoming research on simulation failure scenarios will bring together diverse perspectives to build a more secure ecosystem for everyone.
Tiago Assumpcao is Technical Director at Crypto ISAC, where he leads efforts in threat intelligence engineering and collaborative defense to strengthen trust and security across the crypto ecosystem.
About Crypto ISAC
The Crypto ISAC is a member-driven, not-for-profit organization that works together to curb malicious actors, address vulnerabilities, share intelligence, and move security forward to protect the crypto ecosystem. We are founded by leading crypto organizations and designed for cryptosecurity experts to address the security and trust challenges that face crypto today and shape the crypto ecosystem of tomorrow.