What Is a Fraud Proof?
In blockchain technology, the term “fraud proof” refers to a technical method that plays a crucial role in enabling the on-chain scalability of blockchains, such as through sharding or larger blocks, while ensuring the availability and correctness of on-chain data.
Fraud proofs are employed in Optimistic Rollups (ORs), which serve two main functions: reducing costs and lowering latency levels for decentralized applications on a blockchain network.
Sequencer Incentives
For a sequencer responsible for processing ORs, providing a fraud proof alongside their work is necessary to incentivize good performance.
Sequencers are financially compensated for executing rollups according to the consensus rules, and they face monetary penalties, such as forfeiting their fraud proof, for breaking the rules.
Challenges and Solutions
Fraud proofs related to state transitions are effective but rely on an important assumption that all block data is accessible.
If a block miner only publishes the block header without the correct contents, it becomes impossible to establish whether the miner is incorrect.
Even if 99% of the data is available, the remaining 1% may be required to validate a block’s correctness, as complete data availability is necessary.
Ensuring data availability is a crucial aspect of block validation, as data unavailability can occur due to various reasons, not only malicious nodes.
Preventing data unavailability by rogue nodes is the appropriate solution.
Scaling public blockchains necessitates the use of fraud proofs and erasure codes. These mechanisms allow lightweight nodes to make independent decisions on which blocks to reject without relying solely on a majority of trusted full nodes.
Scaling Public Blockchains
Even if brief zero-knowledge proofs could be used to verify correctness, the problem of an attacker publishing inaccessible blocks and having them included in the chain remains significant.
This issue prevents other validators from fully computing the state or creating blocks that interact with the inaccessible part of the state.
Balancing Efficiency and Interaction Challenges
Fraud proofs demonstrate instances where state transitions were executed incorrectly.
The main advantage of fraud proofs is that they are not required for every state transition but rather when issues arise.
This approach reduces the computational resources needed and is better suited for scalability-constrained environments.
However, the main drawback of these protocols lies in their interaction model, as they involve a “dialogue” among multiple participants.
Dialogue or communication requires the presence of the involved parties, especially the party alleging fraud, and allows other parties to disrupt the conversation in various ways.