Road to Decentralization: Optimism Launches a Testnet Version of its Fault-Proofs
Optimism currently lacks a fault-proof system on its mainnet.
The lack of a fault-proof system means that the system permits invalid state roots, which could potentially pose a danger to funds.
As such, all users trust the centralized sequencer to operate correctly.
Furthermore, the more OP Stack integrations, the bigger this issue becomes.
This short piece focuses on how Optimism is launching a fault-proof system on its testnet. It’s also important to mention that at the current state, most Layer 2 designs compromise with some elements that are not totally decentralized (sequencer, upgradeability, and procedures in case of failure of the proposer or the sequencer).
L2Beat provides a comprehensive analysis of Layer 2 risks:
What are Fault-Proofs?
Let’s take a step back and explain why fault-proofs are important.
I have previously written a piece on the Tech/Growth Trade-offs for Layer 2 security:
As an Optimistic Rollup, Optimism assumes that transactions are valid until proven wrong. Optimistic Rollups rely upon a system of fraud-proofs to challenge and detect conflicting and invalid transactions.
Once transactions are submitted, L2s have a time window, called a “challenge period” where anyone can challenge the results of transactions by running a fraud-proof.
If the challenger succeeds with the fraud-proof, then the protocol “re-executes the transaction(s) and updates the rollup's state accordingly”. The sequencer which included the incorrect transaction then will be penalized.
If the transaction batch goes unchallenged (all transactions are valid) until the challenge period it’s over, it’s considered valid and gets accepted on Ethereum.
A fault-proof system is also why Optimistic rollups experience 7-day delays for their withdrawals.
This delay is specifically required to run fault-proofs and make sure there are no invalid transactions.
Why not having Fault-Proofs is a big deal?
In the current configuration, “users need to trust block proposers to submit correct L1 state roots”. The lack of fault proofs in OP effectively means that challenging transaction remains permissioned.
The sequencer could unilaterally stop transactions or appropriate user funds, and users would have no way to counteract such fraudulent or inaccurate submissions.
The choice of introducing fault-proofs after mainnet launch stems from the OP team's vision of “progressive decentralization”, to release Optimism on “training wheels”.
Introducing Fault-Proofs
In the first week of October (3rd October), the OP network successfully launched a testnet version of its modular system of fault-proofs.
Once the system goes live on Mainnet it will make the OP Superchain more decentralized, efficient, and secure.
Furthermore, the fault-proof system will be modular, allowing each network built on the OP Stack to leverage a unique fraud prevention design, fostering diversity:
Fault-proof Program (FPP)
Fault-proof Virtual Machine (FPVM)
Dispute Game Protocol
These elements can be implemented separately according to protocol needs, thus custom-building their fault-proof system.
The distinction between the FPP and the FPVM also lays the foundation for a “multi-proof” future, “unique dispute games, and a variety of different FPVMs”.
Implementing a fully functioning fault-proof system brings Optimism closer to full decentralization.
In addition to this, the system is also instrumental in moving forward several protocol implementations closer to Optimism “technical and social decentralization”.
The modularity of the system (province mechanisms, dispute games) and the diverse contributors also ensure that Optimism will reflect this diversity in its decentralized nature.