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Optimism Finally Gets Its Mission-Critical 'Fault Proofs'

Optimism, a leading layer-2 blockchain, aims to help Ethereum users transact quickly and for lower fees. Its tech serves as the foundation for some of the biggest names in blockchain, including the COINBASE exchange's popular Base blockchain and Worldcoin's World Chain–from OpenAI founder Sam Altman.

But for years, Optimism had a problem. All of the blockchains that used Optimism's technology were built according to a core underlying premise: They "borrowed" Ethereum's security apparatus. In reality, however, that wasn't the case.

Until now, Optimism has been missing a core feature at the heart of its security design: "Fault proofs." On Monday, that long-promised tech is finally coming to Optimism's mainnet.

Fault-proofs are meant to keep Optimism-based layer-2 chains honest. They help prevent operators of a layer-2 chain from passing inaccurate transaction data down to Ethereum's layer-1 transaction ledger, and they power the layer-2 chain's "decentralized" withdrawal mechanism.

Similar "proof" technology is used by all layer-2 rollup networks, including Optimism competitors like Arbitrum. It's meant to ensure that a rollup's users–be they NFT traders, retail investors, or big-name financial institutions–can trust Ethereum's sprawling operator network, rather than the rollup's own internal systems, to record their transactions and withdrawals accurately.

As layer-2 chains like Arbitrum baked proofs their systems, Optimism lagged behind. For years, this made Optimism the butt of criticism from peers who claimed their own technology was safer and more advanced.

Now that fault proofs are finally coming to Optimism's mainnet, the network's developers–and the growing ecosystem of other teams that use its technology–hope to put their past behind them.

How do ‘Fault Proofs’ work?

Over the past two years, layer-2 rollup networks like Optimism have become the go-to method for operating on the notoriously expensive Ethereum blockchain.

When a user submits a transaction to a rollup network, it is bundled with transactions from other users before it is passed down to Ethereum. Those bundles are written to Ethereum's transaction LEDGER all at once, a setup that lets users transact faster and for just a fraction of the fees.

In theory, rollup transactions are secured by "proofs," which are cryptographic methods that allow observers on Ethereum to check whether transaction details have been recorded accurately. This is most relevant in the context of withdrawals, allowing users to trust Ethereum–rather than the rollup network–to pull their funds out of the layer-2 chain.

Without fault proofs, users who deposited their funds into Optimism needed to trust the rollup's "security council" to return their funds–a system that exposed the rollup to potential human error or bias. With fault proofs, those users should only need to trust Ethereum.

Optimism derives name from its "optimistic" proof system, and it launched a version of the tech when it first released in 2021 before quickly scrapping it after finding issues.

“We literally deleted the entire system essentially, re-architected it, and rewrote the entire thing,” Karl Floersch, the CEO of OP Labs, said in an interview with CoinDesk. “That was brutal, but absolutely the correct decision.”

The Optimism team previously shared in March that it was testing its fault proofs system on their Sepolia testnet. Since then, they had an audit conducted by blockchain security firm Sherlock, and found a few bugs that they were able to patch out.

“So we fixed everything that we did find, and we got a lot of confidence in the actual implementation being ready for prime time,” Floersch said.

Starting this week, the network will again rely on a fault-proof system to power withdrawals, but it will still retain "training wheels" meant to ensure that things run smoothly. The Security Council will remain intact and can intervene in the event that the fault-proof system goes down. This combination of the two entities is what Optimism is calling “Stage 1 decentralization.”

The goal is to eventually reach Stage 2 decentralization, where the network will not have to rely on the Security Council at all.

“Stage 2 is a multiple fault proof system, sufficient such that it is possible to run the system in some ways, like on autopilot. There's no ability for the Security Council to intervene at the last moment,” Floersch said.

Floersch added that the team is hard at work to reach its Stage 2 goals, but he didn't give a timeline for when that ultimate vision would be reached.

With fault proofs finally shipping to Optimism's mainnet, other chains that use Optimism's OP Stack will gain access to the tech as well. (According to DefiLlama, Two blockchains that use Optimism's OP Stack, Blast and Base, currently surpass Optimism's mainnet in terms of total value locked.)

“We're going to start with OP mainnet for this upgrade, it's a decently large upgrade,” Floersch told CoinDesk. “However, it should not be too long” for Coinbase's Base chain to implement the fault proof system, too, Floersch added.

Edited by Sam Kessler.

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 6/10/2024

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