Optimism’s Rollout of Permissionless Fraud Proofs

Optimism OP +4.28% has successfully rolled out permissionless fraud proofs, also referred to as fault proofs. This mechanism enables users to contest potentially fraudulent or incorrect transactions on layer-2 networks, which is a noteworthy milestone for the Ethereum-based ecosystem.

Key Differences

Unlike permissioned fraud proofs, where only trusted proposers can contest transactions, permissionless fraud proofs expand this capability to all users.

Decentralization Milestone

With this development, Optimism can assert it has achieved Stage 1 decentralization, as described by Ethereum co-founder Vitalik Buterin. Stage 1, termed “limited training wheels,” mandates that a layer-2 network must have a functional fraud proof system, although a multisig of trusted parties can override it to mitigate any bugs.

Reversion to Permissioned State

However, just over two months post-launch of permissionless fraud proofs on June 10, the Optimism Foundation reverted the network to a permissioned state. This decision followed community-driven audits that uncovered several bugs of varying severity, as announced on X (formerly Twitter).

Governance Forum Proposal

A representative from OP Labs, a contributor to Optimism, proposed the reactivation of the fallback mechanism in the governance forum, detailing the identified security vulnerabilities. The representative noted:

“None of the vulnerabilities have been exploited, and user assets are not and were never at risk. However, out of an abundance of caution, the permissioned fallback mechanism has been activated to prevent potential instability while the vulnerabilities are patched.”

Vulnerability Insights

Among the discovered vulnerabilities, two were classified as high-severity issues. According to the ImmuneFi bounty scale, while certain high severity issues were found, user assets remained secure. The post stated:

“All of the audit issues listed below can be detected by our monitoring tooling.”

While fallback mechanisms underwent audits, some contracts linked to the fraud proof system were beyond the audit’s scope.

Normal Functionality The dispute game and MIPS contracts are categorized under liveness/reputational risk, which do not necessitate audits. The fallback mechanisms ensure that any potential bugs are easy to recover from, posing no risk to user funds. The proposal explains:

“Therefore, we have opted not to pursue a fix review for the changes made in this proposal.”

Upcoming Upgrades

Taiwo’s proposal is set to implement network upgrades on September 10 at 16:00:01 UTC, which has been dubbed Granite. The upgrade will necessitate several network modifications, including an L2 hard fork. While not audited, a security review conducted by OP Labs indicated that the changes are low-risk. As of now, Optimism has not responded to The Block for comments.