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Fraud Protection

Njord makes fraud economically irrational. Every participant stakes value, catching fraud is rewarded, and bad actors lose more than they could ever gain.

Design Principles

Principle How
Skin in the Game All participants stake value, creating accountability
Profitable Detection Catching fraud is financially rewarded
Decentralized Validation Multiple parties can challenge, not just the network
Economic Deterrence Fraud costs more than potential gains
Speed vs Security Higher trust = faster settlement

Attribution Lifecycle

Every conversion goes through this state machine before commission is released:

stateDiagram-v2
    [*] --> Submitted: Bridge submits event
    Submitted --> AutoCheck: Validation
    AutoCheck --> Rejected: Auto-fail<br/>(duplicate, self-referral)
    AutoCheck --> Pending: Passes checks
    AutoCheck --> Flagged: Suspicious<br/>(extended review)
    Pending --> Settled: Hold period expires<br/>Commission paid
    Pending --> Challenged: Dispute filed
    Flagged --> Challenged: Dispute filed
    Flagged --> Settled: Review cleared
    Challenged --> FraudConfirmed: Evidence proves fraud
    Challenged --> Validated: Challenge rejected
    FraudConfirmed --> [*]: Affiliate slashed
    Validated --> Settled: Commission released
    Settled --> [*]
    Rejected --> [*]

Affiliate Tiers & Hold Periods

Affiliates build trust through staking and track record:

Tier Stake History Required Hold Period Campaign Access
New 0 < 30 days 7 days Open campaigns
Verified 100 NJORD 30+ days, 10+ conversions 3 days Standard campaigns
Trusted 1,000 NJORD 90+ days, 100+ conversions, < 1% dispute 24 hours Premium campaigns
Elite 10,000 NJORD 180+ days, 1000+ conversions, < 0.5% dispute Real-time All campaigns

Challenge System

Who Can Challenge?

Challenger Can Challenge Bond Required
Company Their own campaign attributions 5% of commission (min $5)
Bridge Operator Any attribution they processed 10% of commission (min $10)
Other Affiliate Same-campaign attributions 15% of commission (min $15)
Protocol (auto) Any attribution No bond required

Challenge Flow

sequenceDiagram
    participant Challenger
    participant Protocol as Njord Protocol
    participant Affiliate

    Challenger->>Protocol: 1. File challenge + post bond
    Note over Protocol: Attribution status → CHALLENGED<br/>Settlement paused

    Protocol->>Challenger: 2. Evidence window (48 hours)
    Challenger->>Protocol: Upload evidence to IPFS
    Protocol->>Affiliate: Notified, can submit counter-evidence

    Protocol->>Protocol: 3. Resolution (72 hours)
    Note over Protocol: Auto-resolve, DAO vote,<br/>or oracle resolution

    alt Fraud Confirmed
        Protocol->>Challenger: Bond returned + 50% of commission
        Protocol->>Affiliate: Commission revoked + stake slashed
    else Challenge Rejected
        Protocol->>Affiliate: Commission released + challenger's bond
        Protocol->>Challenger: Bond forfeited
    else Inconclusive
        Protocol->>Affiliate: 50% commission released
        Protocol->>Challenger: Bond returned (no reward)
    end

Outcomes

Outcome Affiliate Challenger Company
Fraud Confirmed Loses commission + stake slash Bond back + 50% of commission 50% refunded to escrow
Challenge Rejected Gets commission + challenger's bond Loses bond No change
Inconclusive Gets 50% commission Bond returned 50% refunded

False accusations are penalized

Filing frivolous challenges costs you your bond. The system incentivizes only legitimate disputes.

Fraud Scoring

Every attribution receives a score from 0–100 based on multiple signals:

Score Range Classification Action
0–20 Clean Auto-approve, fast settlement
20–50 Normal Standard hold period
50–80 Suspicious Extended hold + manual review
80–100 High Risk Auto-reject or require verification

Scoring factors include: velocity patterns, duplicate detection, affiliate history, bridge reputation, and behavioral analysis.

Common Fraud Scenarios

Cookie Stuffing

Attack: Hidden iframes dropping cookies on unsuspecting users.

Detection: Low click-to-conversion time (< 1 second), high volume with low engagement, IP/session mismatches.

Response: Auto-flagged by bridge, challenged by company, affiliate stake slashed.

Fake Signups

Attack: Creating fake accounts to earn per-signup commissions.

Detection: Disposable email domains, phone verification failure, no subsequent engagement.

Response: Require verified email/phone for signup campaigns, pay on activation not signup.

Bot Traffic

Attack: Using bots to generate fake clicks or signups.

Detection: Device fingerprint anomalies, inhuman behavioral patterns, data center IP clustering.

Response: Bridge rejects submission. If submitted, both affiliate and bridge slashed.

Collusion (Affiliate + Bridge)

Attack: Bridge operator and affiliate collude to submit fake attributions.

Detection: Cross-bridge comparison, unusual volume spikes, company transaction record mismatch.

Response: Both affiliate and bridge slashed under strict liability. Bridge permanently banned.

Affiliate Slashing Schedule

Offense First Second Third
Lost challenge 10% stake 25% stake 100% + ban
Proven malicious fraud 50% stake 100% + ban —
Self-referral 25% stake 50% stake 100% + ban
Bot/fake traffic 30% stake 60% stake 100% + ban