Arbitrum’s Built-in Security Feature Goes Unused in Two Years Since Launch

Arbitrum, the Ethereum layer-2 solution developed by Offchain Labs, has yet to witness a single fraud proof submission since its mainnet launch in August 2021, according to Ed Felten, the co-founder and chief scientist of Offchain Labs. Fraud proofs, a core security feature of Arbitrum, allow validators to challenge the fraudulent assembly of incoming transaction batches by other validators.

The Functionality of Arbitrum’s Fraud Proofs

To understand how fraud proofs work, it’s important to note that Arbitrum functions as a layer-2 solution on the Ethereum network. When a challenger submits a fraud-proof, a layer-1 verifier contract evaluates the validity of the submission. If confirmed, the stake of the fraudulent validator is slashed.

However, despite the security measures in place, no fraud-proof attempts or successful challenges have taken place on Arbitrum’s mainnet. As Felten revealed during Korean Blockchain Week, there were a couple of fraud-proof attempts on the Ethereum proof-of-work (PoW) version of Arbitrum, which was running prior to the merger:

“Not on mainnet. We did have one or two on Ethereum proof-of-work (PoW). After the Merge, […] there was a version of Arbitrum running on the Ethereum PoW fork, and somebody did try to steal all the data, and there was a successful challenge which defeated that.”

One reason for the lack of fraud-proof attempts on Arbitrum’s mainnet is the risk associated with malicious validators losing their entire stake. Validators who engage in fraudulent behavior face the possibility of their actions being noticed and disputed by others in the network, resulting in significant financial loss.

The Future of Arbitrum’s Fraud Proofs

While the current set of validators on Arbitrum is permissioned and limited to approximately 12 participants, Felten shared plans to introduce a new iteration of fraud proofs called the “BOLD” protocol (Bounded Liquidity Delay). This protocol aims to provide faster guarantees for challenges on Arbitrum:

“In the current version […] an adversary who’s willing to sacrifice multiple stakes can arrange to cause ‘N’ weeks of delay if they’re willing to sacrifice ‘N’ stakes […] But the BOLD protocol says no matter how many stakes they sacrifice, they’ll be defeated in about eight days.”

The BOLD protocol was launched on August 4th by Offchain Labs, bringing improved decentralization and potentially removing the need for permissioned validation.

Looking ahead, Felten indicated that Arbitrum’s fraud proof feature will transition to a permissionless model, allowing anyone to participate in ensuring the correctness of the chain when challenges arise.

Editor’s Notes

Arbitrum’s lack of fraud proofs since its launch raises questions about the effectiveness and adoption of this security measure. It remains to be seen whether the introduction of the BOLD protocol and the shift towards permissionless validation will enhance the usage and success of fraud proofs on Arbitrum’s network. Stay updated on the latest developments in the crypto space by visiting Uber Crypto News.