The Protocol: How Optimism Filled in Its Missing Tooth

Categories Cryptocurrencies Time Jun 12, 2024

The Ethereum layer-2 project Optimism has been all smiles since its launch in late 2021 – but with a missing tooth. Namely, it lacked the "fault proofs" critical to making the project an "optimistic" rollup; these are critical for challenging malicious transactions. As of this week, the gap has finally been filled in. Read on.

ALSO:

  • Crypto-lending comeback
  • Top picks from the past week's Protocol Village column: Biconomy, Ripple, XRP Ledger, Axelar, Lido, Mellow Finance, Symbiotic, Covalent, Arthur Hayes, Cardano, Charles Hoskinson.
  • Solana takes action against the creeping problem of frontrunning and "sandwich attacks."
  • Polygon's Community Grants Program worth 1B POL tokens.
  • ZKsync, with newly stylized project name, sets criteria for next week's ZK token airdrop.

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The Protocol: How Optimism Filled in Its Missing Tooth

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MISSING TOOTH FILLED IN: Optimism, the Ethereum layer-2 project , provides the technological foundation for some of the biggest names in blockchain, including the Coinbase exchange's popular Base blockchain and Worldcoin's World Chain, from OpenAI founder Sam Altman. But for years, blockchains that used Optimism's technology were built according to a false underlying premise: that they "borrowed" Ethereum's security apparatus. In reality, it wasn't the case, because they lacked a crucial piece of functionality known as "fault proofs" – used to challenge actors suspected of malicious behavior. On Monday, that long-promised tech finally came to Optimism's mainnet, CoinDesk's Margaux Nijkerk reported Tuesday . “We literally deleted the entire system essentially, re-architected it, and rewrote the entire thing,” Karl Floersch, CEO of OP Labs, said in an interview with CoinDesk. “That was brutal, but absolutely the correct decision.” The achievement might blunt some of the project's most truculent criticism; similar "proof" technology is used by all layer-2 rollup networks, including Optimism competitors like Arbitrum. Without fault proofs, users who deposited funds into Optimism needed to trust the rollup's "security council" to return their funds – a system vulnerable to potential human error or bias. With fault proofs, users should only need to trust Ethereum's security. For now, though, the Security Council will remain intact and could still intervene in the event that the fault-proof system goes down.

BACK FOR MORE? The crypto lending sector is recovering from the crypto winter, which blew up several large players, thanks to spot bitcoin (BTC) exchange-traded funds (ETFs) and creditors getting some of their assets back from bankrupt companies, CoinDesk's Aoyon Ashraf reports . The sector spectacularly imploded in 2022 as crypto prices dove, with firms including Celsius, BlockFi and Genesis filing for bankruptcy. Since then, digital-asset prices have soared, with the CoinDesk 20 Index up more than 200% since the end of 2022. "What I'm seeing is that this market has come back roaring," Mauricio Di Bartolomeo, co-founder of crypto lending firm Ledn, told CoinDesk during a recent interview at the Consensus 2024 conference in Austin, Texas.

ALSO:

  • After a UK court ruled in March that Craig Wright was not the creator of Bitcoin and didn't author the original blockchain's whitepaper , as he had claimed, he's now being asked to cover costs of the legal proceedings . The Crypto Open Patent Alliance's (COPA) legal representatives last week asked Judge James Mellor to grant that Wright pay 85% of the costs the group incurred in the legal proceedings.
  • Almost $19 billion worth of cryptocurrency has been stolen in thefts dating back to 2011 and the industry continues to grapple with rising blockchain-related crime, according to a report from Crystal Intelligence .
  • Artificial intelligence (AI) and crypto could add a combined $20 trillion to the global economy by 2030, asset manager Bitwise said in a report on Wednesday.

Protocol Village

Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

The Protocol: How Optimism Filled in Its Missing Tooth

Schematic of Biconomy's 'Delegated Authorization Network' (Biconomy)

1. Biconomy , a Web3 infrastructure company, launched a new "Delegated Authorization Network," or DAN, "enabling the safe delegation of on-chain activities to AI agents," according to the team. A press release added: "Biconomy DAN operates by granting AI projects approved access to user's 'Delegated Auth' keys stored on an EigenLayer AVS (Actively Validated Services), ensuring true autonomy without compromising on security." A blog post is here .

2. Ripple Labs , the primary developer behind the XRP Ledger, announced Wednesday that its previously announced XRPL EVM Sidechain has launched, including an integration with the interoperability project Axelar. According to the team: "The XRPL EVM Sidechain brings Ethereum compatibility to XRP Ledger, unlocking DeFi and RWA tokenization opportunities. The Axelar Bridge will ensure seamless asset transfers between XRPL and EVM Sidechain, with wXRP as the native asset."

3. A new initiative from Lido DAO will see Lido's partnering with Mellow Finance , a platform that lets users generate yield by depositing into restaking "vaults," and Symbiotic , a permissionless restaking protocol. Mellow curators Steakhouse, P2P Validator, Re7 Labs and MEV Capital are each introducing vaults that accept stETH in tandem with Tuesday's announcement.

4. Covalent , provider of a decentralized network for indexing blockchain data , announced that BitMEX founder Arthur Hayes has been named as a new strategic advisor . Hayes, who currently serves as chief investment officer of Maelstrom, "will be leading the development of the Ethereum Wayback Machine, ensuring that all Ethereum and EVM rollup data will shape AI with a preformat and verifiably secure pipeline," according to the team.

5. The Cardano network is set to move into the final phase of a multiyear program to become a wholly decentralized blockchain ecosystem later this month, co-founder Charles Hoskinson said in an X post Monday .

Solana Heavyweights Wage War Against Private Mempool Operators

The Protocol: How Optimism Filled in Its Missing Tooth
(Danny Nelson)

(Danny Nelson)

A group of Solana (SOL) validators are facing financial penalties for allegedly facilitating economic attacks against crypto traders.

Over 30 validator operators were kicked off the Solana Foundation Delegation Program over the weekend, a source familiar with the matter said. While they remain validators on the network, they're no longer eligible to receive what amounted to payout boosters for validating transactions on the Solana blockchain. Many of the operators were Russians, another source said.

The purge escalates a months-long shadow war between heavyweights of the Solana validator ecosystem and an underground economy of validators believed to be exploiting traders for profit through what's known as a "sandwich attack," whereby bots frontrun and backfill trades that haven't yet been executed.

"Enforcement actions are on going as we detect operators participating in mempools which allow sandwich attacks," a representative for the Solana Foundation said Sunday.

Read the full story by CoinDesk's Danny Nelson

Money Center

Fundraisings

  • Ava Protocol , formerly OAK Network, secured $10 million in seed funding ($5.5 million initial and $4.5M seed+ rounds) to develop its Eigenlayer AVS for private autonomous transactions on Ethereum.
  • Squads Labs Raises $10M Series A, Unveils Smart Wallet for Public Testing on iOS
  • Polygon Creates New Grants Program, 1B POL Unlocked Over 10 Years
  • How to Fund Open-Source Generative AI? With Crypto

Deals and grants

  • Robinhood to Buy Crypto Exchange Bitstamp, in $200M All-Cash Deal
  • Tether Expects to Invest Over $1B in Deals in the Next Year: Bloomberg
  • Core , an Ethereum-compatible layer-1 blockchain project that relies on Bitcoin for its security setup, "is launching the BTCfi Summer Hackathon , a 12-week event designed to ignite innovation in the Bitcoin economy," according to the team.
  • Layer-2 network Polygon is starting a Community Grants Program to encourage builders to build in its ecosystem, Polygon Labs said on Tuesday . The program aims to place 1 billion POL, Polygon’s soon-to-rebrand MATIC token, into the hands of developers over the next 10 years. The program went live Tuesday with 35 million tokens, worth $23 million at current prices, eligible for distribution.

Data and Tokens

  • ZKsync’s ZK Airdrop is Coming ‘Next Week,’ Here's What to Expect
  • Rune Christensen Explains Why He Wants to Remake Maker and Kill DAI
  • Defi Protocol UwU Lend Suffers $19.3M Expolit: Arkham
  • AI-Linked Crypto Tokens Underperform as Apple's Event Fails to Impress Traders
  • Iggy Azalea Says MOTHER Tokens Can Soon Be Used to Buy Phones
  • Meme Sector Sees Sharp Selloff as GameStop Losses Extend to 60%

Calendar

  • June 11-13: Apex , the XRP Ledger Developer Summit, Amsterdam.
  • July 8-11: EthCC , Brussels.
  • July 25-27: Bitcoin 2024 , Nashville.
  • Aug. 19-21: Web3 Summit , Berlin.
  • Sept. 19-21: Solana Breakpoint , Singapore.
  • Sept. 1-7: Korea Blockchain Week , Seoul.
  • Sept. 30-Oct. 2: Messari Mainnet , New York.
  • Oct. 9-11: Permissionless , Salt Lake City.
  • Oct. 21-22: Cosmoverse , Dubai.
  • Oct. 23-24: Cardano Summit , Dubai.
  • Oct. 30-31: Chainlink SmartCon , Hong Kong
  • Nov 12-14: Devcon 7 , Bangkok.
  • Nov. 20-21: North American Blockchain Summit , Dallas.
  • Feb. 19-20, 2025: ConsensusHK , Hong Kong.
  • May 14-16: Consensus , Toronto.