ALT Text: Bitcoin tokens on keyboard
Stateless wallet-based authentication is becoming the preferred model for Web3 applications because it removes the need to store passwords, accounts, or long-lived sessions.
Instead of tracking a user in a database, the backend verifies a signed message using the user’s wallet through standards like Sign-In with Ethereum (SIWE). For CyberPanel and OpenLiteSpeed operators, the challenge is less about cryptography and more about integrating nonce generation, caching rules, reverse proxy logic, and token lifecycle management in a way that keeps the server lean and secure.
This approach matters because a VPS running OpenLiteSpeed must handle signature verification at the application layer while offloading static content, rejecting stale nonces, and auditing requests for replay attempts. By designing the flow correctly, the server never stores private keys, never becomes a custodian, and keeps the login process stateless. The result is a modern login architecture that mirrors the wallet-based access patterns already used in real Web3 environments.
How SIWE-style authentication works
A SIWE flow starts with generating a unique nonce server-side. The user’s wallet signs a structured message containing the nonce, domain, address, and expiration. The backend verifies the signature using the public address derived from it. If valid, the server issues a short-lived token—often a JWT—that stores minimal metadata but no personal identifiers. This token acts as proof of wallet ownership for the session window.
Why nonce hygiene matters
Nonce reuse is a common vulnerability in wallet authentication. Servers must:
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● Store each nonce temporarily.
● Mark it as consumed after verification.
● Enforce expiration.
● Reject any replay of the same nonce.
Stateless authentication with wallets still requires a small, ephemeral cache or in-memory store (Redis, Memcached, or an OpenLiteSpeed variable). This prevents attackers from replaying signatures. Each nonce should map to a pending login with strict TTL to reduce the attack surface.
A Wallet-based UX Case Study
Building a wallet login system requires more than just cryptography—it needs a UX that feels seamless and trustworthy. Users expect to connect a wallet, sign a lightweight message, and gain access without completing forms or creating accounts. This mirrors how modern Web3-native platforms handle access using signature-based validation and short-lived sessions. One practical model is enabling access only after a signed message is verified, without storing long-term identifiers or personal data.
PeerGame illustrates this approach in reality. It is a Web3-native crypto casino built on the BSV blockchain, and it supports wallet-based login through WalletConnect and HandCash. There is no traditional account creation, and access is granted by connecting a self-custodial wallet.
Because the platform is non-custodial, PeerGame does not hold user funds; withdrawals go directly to the user’s wallet. This makes it an excellent example of what we are discussing, and if you want to see these practices in action, visit PeerGame.
Its session handling remains lightweight: once a wallet is verified, access persists only while the connection remains active. Game outcomes are backed by blockchain-supported transparency and provably fair logic, reinforcing trust without storing session data. Fast settlement and minimal retention demonstrate why stateless validation is more secure and scalable than database-backed sessions.
Observing how PeerGame verifies signatures and discards sensitive artifacts offers a clear blueprint for designing SIWE-style systems that prioritize privacy and autonomy.
Bringing OpenLiteSpeed into the flow
Once authentication logic is in place, the reverse proxy must route wallet signature requests to the application backend while caching everything else. OpenLiteSpeed allows precise cache exclusions by URL or header, which is critical when processing nonce endpoints.
The official SIWE specification provides the current message structure and validation rules. Combining these guidelines with OpenLiteSpeed’s rewrite engine ensures login routes bypass cache, POST requests are forwarded correctly, and failed verifications are logged for auditing. Proxy rules can also pass X-Forwarded-For headers, giving the backend accurate origin data to detect anomalies or repeated signature attempts.
Practical architecture on CyberPanel
CyberPanel provides direct control over OpenLiteSpeed configurations, environment variables, and containers, making it a strong fit for wallet authentication microservices. A scalable layout includes:
Proxy and routing
● /nonce → backend API, no cache.
● /verify → backend signature verification, no cache.
● /static/* → full cache.
● Websocket or WalletConnect endpoints proxied directly.
Token lifecycle
Generated tokens should:
● Expire quickly (5–15 minutes).
● Contain only the wallet address.
● Avoid storing device or IP metadata.
● Be signed with rotating keys.
Because this is stateless, the token itself is the session. If a user disconnects, the frontend simply discards the token. No logout endpoint is required.
Security enhancements
Platforms may also add rate limiting on nonce requests to prevent abuse. You can use HTTPS termination in OpenLiteSpeed to protect signature payloads. It’s also important to log failed verifications with a timestamp and wallet address, but you should avoid storing raw signatures.
Cache and performance balancing
Stateless design improves scalability, but caching must be deliberate. OpenLiteSpeed’s microcache can accelerate post-login pages, but it should never store nonce endpoints or token responses. Tagging responses with Cache-Control: no-store ensures sensitive payloads are treated accordingly. Reverse proxies can also bypass cache when specific headers (e.g. Authorization) are present.
For replay protection, it is better to maintain a short-lived nonce list in memory, rather than writing to disk. This reduces latency while still preventing signature reuse. Pairing SIWE, short-lived JWTs, and lightweight in-memory caches strikes the balance between performance and safety. All of these things are the mark of a modern platform making the most of today’s anonymous technology, and companies like PeerGame are serving as trailblazers to a very different future.
