Optimism begins trials for fault proofs on Sepolia testnet

Ethereum layer-2 scaling network Optimism has announced that it will begin testing out its fault proof system on Ethereum’s Sepolia testnet, with plans to deploy this on the Ethereum mainnet within the year.

Optimism currently lacks fully operational fault proofs, requiring users to trust the protocol’s programming or the “security council” that oversees the network to keep withdrawals secure. This has, in turn, exposed Optimism to criticism from advocates of rival blockchains.

What are fault proofs?

Fault proofs are a crucial component of rollup networks like Optimism, which bundle user transactions and settle them on Ethereum for lower costs. These proofs provide features that help secure withdrawals from the network and ensure that the data passed from the rollups to Ethereum reflects genuine user activity.

This feature is designed to enhance security and decentralization. The system consists of three main parts: a Fault Proof Program (FPP), a Fault Proof Virtual Machine (FPVM), and a dispute game protocol, which works together to challenge malicious or faulty activity on the network.

The FPP verifies L2 outputs from L1 inputs, allowing for the resolution of disputed outputs on L1 by combining consensus and execution elements in a single process. The FPVM, with Cannon as the default, executes a single instruction step on-chain using a generic VM, facilitating the resolution of disputes.

Another critical component of the fault proof system is what’s called the Dispute Game Protocol, a feature that enables the creation, management, and upgrading of different types of incentivized dispute games, ensuring fair participation and definitively validating or invalidating claims.

Fault proofs are essential for secure bridging without central fallback, promoting decentralization, and enhancing the security of the Optimism ecosystem through a modular and diverse fault proof system.

How fault proofs enhance decentralization

Reliance on the security council runs counter to the ethos of decentralization and risks vulnerabilities that may be prevalent among human-controlled organizations or systems. One must “trust the security council to operate honestly in order to keep your withdrawals secured,” explains Optimism co-founder and OP Labs CEO Karl Floersch.

Contrary to what security councils represent, fault proofs “allow for permissionless, crypto-economically enforced withdrawals,” says Floersch.

When Optimism launched in 2020, it already had an early version of fault proofs. However, the system was later scrapped due to compatibility issues with the Ethereum Virtual Machine (EVM). According to Floersch, the new fault proof system prioritizes modularity in its architecture and is expected to support apps more seamlessly and allow for the use of different components, such as proofs powered by zero-knowledge (ZK) cryptography.

Rollup networks like Optimism and its main competitor, Arbitrum, have been using “training wheels” to safely onboard users while refining their technical elements. These networks are categorized into stages based on their level of decentralization and security, with stage 0 rollups requiring trust from users and stage 2 rollups being nearly identical to Ethereum in terms of permissionlessness and security.

Despite the delayed timeline for re-introducing proofs, Floersch maintains that Optimism’s deliberate pace has put it on a faster track to becoming a fully decentralized system. Data from L2Beat indicates that Optimism now has a total value locked (TVL) of $7.57 billion, 53% of which is canonically bridged from across other EVMs, with 47% in natively minted tokens such as VELO, EXA, and KWENTA.