Optimism Foundation disables permissionless fraud proofs, plans hard fork following security audits
2024-08-18

Optimism's rollout of permissionless fraud proofs, a mechanism also known as fault proofs that allows users to contest potentially fraudulent or incorrect transactions on layer-2 networks, was a significant achievement for the Ethereum-based ecosystem. Unlike with permissioned fraud proofs, where trusted proposers are the only ones with the ability to contest transactions, permissionless fraud proofs open up that mechanism to all users.
With the development, Optimism could claim to reach Stage 1 decentralization, as outlined by Ethereum co-founder Vitalik Buterin. Stage 1, or "limited training wheels," requires that a layer-2 network has a functioning fraud proof system, though a multisig of trusted parties could reserve the ability to override the system should any bugs be identified or exploited. 
However, just over two months after the permissionless fraud proofs went live on June 10, the Optimism Foundation has reverted the network back to a permissioned state after "community-driven audits" identified a number of bugs at varying levels of severity, Optimism announced on X. 
A representative of Optimism contributor OP Labs submitted a proposal to Optimism's governance forum outlining the reasons for activating the fallback system and detailing the security vulnerabilities that were identified.
"None of the vulnerabilities have been exploited, and user assets are not and were never at risk. However, out of an abundance of caution, the permissioned fallback mechanism has been activated in order to avoid any potential instability while the vulnerabilities are patched," protocol engineer Mofi Taiwo wrote. 
Of the identified vulnerabilities, two high-severity issues were discovered, according to Optimism's ImmuneFi bounty scale. "While the auditors did discover some high severity issues, no user assets were ever at risk. All of the audit issues listed below can be detected by our monitoring tooling," Taiwo's post reads. 
While the fallback mechanisms had been audited, certain contracts related to the fraud proof system fell outside Optimism's audit scope. "...The dispute game and MIPS contracts fall into the liveness/reputational risk category which do not require audits. The fallback mechanisms make any bugs simple to recover from and pose no risk to user funds. Therefore, we have opted not to pursue a fix review for the changes made in this proposal," the proposal reads. 
Taiwo's proposal would schedule the upgrade for September 10 at 16:00:01 UTC. The upgrade, dubbed "Granite," requires several updates to the network, including an L2 hard fork. While Taiwo's post notes that the hard fork has not been audited, the post notes that OP Labs performed a security review of the changes and found them low-risk. Optimism could not be immediately reached for comment by The Block. 
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