Bessie Liu

Ethereum scaling startup Optimism has published the first release of “fault-proof system alpha.”



Now available on the OP Goerli testnet, the system has three components: a fault-proof program (FFP), the code that executes the EVM; a fault-proof virtual machine (FPVM); and a dispute game protocol.&nbsp;



The goal of these different systems is to work in tandem in an effort to challenge malicious activity on the Optimism network. Fault proofs are designed to prevent fraudulent activities or errors from being processed in rollup transactions.&nbsp;



Optimistic rollups are “optimistic” in nature, as they assume transactions are accurate until proven otherwise. Fault proofs form an important security measure to ensure that false activities aren’t accepted on the network.



OP Labs CEO Karl Floersch told Blockworks in an interview that the fault-proof system builds off the <a href="https://blockworks.co/news/optimism-bedrock-upgrade-superchain">Bedrock upgrade</a> and is designed to set the stage for <a href="https://medium.com/l2beat/introducing-stages-a-framework-to-evaluate-rollups-maturity-d290bb22befe">the project’s second stage of decentralization</a>.



Upon launch, users will be able to participate in the dispute game <a href="https://disputify.optimism.io/">protocol</a>, but they are not incentivized to do so, Floersch explains. This is because the bonding design will not be added during the protocol’s testnet release but will be included ahead of the OP mainnet launch.&nbsp;



A bond refers to the amount of money a sequencer must post on Ethereum in order to participate in network activities. If fraud is proven, the sequencer’s bond will be slashed and redistributed to verifiers.&nbsp;



“The dispute game is indeed permissionless so that there can be multiple clients and multiple fault proofs that are all running in parallel,” Floersch said. “This does not mean that the system is bulletproof at the moment; we’re launching this testnet to get a bunch of eyes on the design. It is critical we get the community to understand how it works.”



Multiple players can participate in the dispute game, which will not be limited to 1v1. This design was to mitigate the potential of denial-of-service vectors in 1v1 games, where malicious actors could potentially challenge themselves and lead to deadlock or inaccurate resolutions.&nbsp;



<h2 class="wp-block-heading">Path to decentralization</h2>



Fault proofs are a step in achieving a permissionless transition of information between a layer-1 and a layer-2. This means that an end user should be able to deposit their tokens into a layer-2 from a layer-1, and then withdraw their tokens from a layer-1 —&nbsp;without anyone being able to stop the process.&nbsp;



It’s important to note that tokens directly deployed to a layer-2 do not have any dependencies on the fault-proof system, as there is no bridge back to the first network layer for those tokens.&nbsp;



“This is critically important because [layer-1s] have the highest security and decentralization properties,” Floersch told Blockworks. “It also allows users to opt out of upgrades to the [layer-2].”



As it currently stands, every major layer-2 project has trusted parties who hold upgrade keys that can execute protocol upgrades, making it a primary point of centralization. This is because if upgrade keys were to be compromised, all deposited assets in the layer-2 protocol would be at risk.



“The goal of what we’re doing is that we’re drawing the fastest path to decentralization,”&nbsp; Floersch explained. “And the prerequisite for that is multiple fault-proof implementations.”



OP Lab’s fault-proof system will be entirely open-source, and a bug bounty will be put in place, according to Floersch.



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Optimism devs tackle bad actors with fault-proof system testnet launch

Macauley Peterson

<div id="highlights-block_626c24657504e" class="highlights">
 <ul>
 <li>Governance will eventually be split between two co-equal branches, according to a constitution</li>
 <li>An initial retroactive airdrop will be the first of many seeking to coordinate network participants</li>
 </ul>
 
</div>



Optimism — an Ethereum layer-2 solution featuring optimistic <a href="https://ethereum.org/en/developers/docs/scaling/layer-2-rollups/" target="_blank" rel="noreferrer noopener">rollups</a> — is planning to decentralize its governance through the release of a token.



The network detailed the token launch, OP, in <a href="https://optimism.mirror.xyz/gQWKlrDqHzdKPsB1iUnI-cVN3v0NvsWnazK7ajlt1fI" target="_blank" rel="noreferrer noopener">a blog post</a> this week. While not the first layer-2 to launch a token, the mechanism of distributing it and the overall governance structure is novel in that it envisions a bicameral system of co-equal “houses”: a “Citizens’ House” and a “Token House.”



“If we just had tokens, then governance rights would be buyable on the open market,” Karl Floersch, chief technology officer, said on the <a href="https://youtu.be/bKVIfJIhS1o" target="_blank" rel="noreferrer noopener">Bankless podcast</a>.



The plan calls for an “Optimism Collective,” which explicitly aims to prevent the centralization of governance power in the hands of moneyed interests. “It’s more equal,” Floersch said.



Rather than follow a one-token-one-vote structure, the system’s architects at Optimism PBC, a public-benefit corporation rebranded as <a href="https://www.linkedin.com/company/oplabs-pbc/" target="_blank" rel="noreferrer noopener">OP Labs</a>, sought to create a “balanced, decentralized, bottom-up governance system by the people for the people.”



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/zlPgxN-dVJuNTJVGkWd0KXLuHeXpYPIlIETDCPQxX8MX0rqb2H9VQzrgq0weu_noPb8ZKK_-B5J2Hx5m7rFIe2704-wG50po3a5a0xKkAD4o9kMEdQPKCDea0G2clrf-g_K9R1C8agTq6eZK9w" alt=""/><figcaption>An illustration of the proposed Optimism governance scheme</figcaption></figure>



Layer-2 implementations, built on top of Ethereum’s mainnet, inherit Ethereum’s security but allow transaction throughput to scale, while reducing gas fees — the cost of block space on the network. Optimism is currently the third largest layer-2 by total value locked, at $670 million, behind Arbitrum and dYdX, according to <a href="https://l2beat.com/">L2beat</a>.



Tokens have typically been used to bootstrap liquidity on new protocols, but Optimism received an early boost by being the first layer-2 on which <a href="https://uniswap.org/blog/uniswap-optimism-alpha" target="_blank" rel="noreferrer noopener">Uniswap announced</a> it would deploy its leading dex protocol. Synthetix, another decentralized finance (DeFi) blue chip, <a href="https://blog.synthetix.io/why-optimism/" target="_blank" rel="noreferrer noopener">embraced the network</a> as its rollup solution of choice.



<h3 class="wp-block-heading">A new kind of airdrop</h3>



Jinglan Wang, Optimism’s co-founder and CEO, and Ben Jones, formerly the chief scientist, will move to a new Optimism Foundation, which will fund external teams to build out the OP ecosystem.



The OP token is not yet claimable, let alone tradeable on the secondary market, but the team sought to de-emphasize its role.



<blockquote class="wp-block-quote">“The token is missing the point of this thing. This is about building a new system of governance and funding mechanisms for public goods,” Jones said.</blockquote>



The problem with Web2 is plutocracy, Wang said. The Optimism team are trying to avoid a “sneaky plutocracy,” enabling Optimism network participants to coordinate without falling prey to the “pressures of centralization.”



To do that, governance power will reside with “citizens” — holders of NFTs that will be distributed by projects built on Optimism. But unlike most NFTs (non-fungible tokens) today, these will be “soul bound,” that is, fixed to a specific address — a single person. They will not be able to be transferred or sold.



While the details remain scant, the team envision a grassroots network, seeding a “web of trust” on-chain that will grow over time. Independent projects will decide which of their community members will best represent their community’s interests in Optimism governance.



The idea has been received favorably among the broader Ethereum community, with co-founder Vitalik Buterin calling it “possibly the biggest attempt at non-token-holder-centric DAO governance so far.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Possibly the biggest attempt at non-token-holder-centric DAO governance so far. Excited to see where this goes. 👀 <a href="https://t.co/9vreC7QsXa">https://t.co/9vreC7QsXa</a>&mdash; vitalik.eth (@VitalikButerin) <a href="https://twitter.com/VitalikButerin/status/1519012381581463552?ref_src=twsrc%5Etfw">April 26, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The initial airdrop was aimed to be “super fair,” with a wide distribution and built-in <a href="https://en.wikipedia.org/wiki/Sybil_attack" target="_blank" rel="noreferrer noopener">Sybil-resistance</a>, by rewarding a set of behaviors that would be difficult to game. But it will only be the first of a string of airdrops used to incentivize activity that helps Optimism, and Ethereum more broadly, grow, by distributing public goods funding to recipients from across Ethereum development.



The team see its governance experiment as a test bed for the future evolution of the entire internet.



<blockquote class="wp-block-quote">“Right now we sit at an inflection point…this is a moment where the internet is most sorely in need of human representation, identity, and fixing these problems that we have,” Floersch said.</blockquote>



“Humanity is important, we need to capture and fight for our rights as people and individuals to make sure our networks reflect our values.”



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