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Fast and Furious Withdrawals from Optimistic Rollups

Authors Mahsa Moosavi, Mehdi Salehi, Daniel Goldman, Jeremy Clark

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Author Details

Mahsa Moosavi
  • Concordia University, Montreal, Canada
  • OffchainLabs, Princeton, NJ, USA
Mehdi Salehi
  • OffchainLabs, Princeton, NJ, USA
Daniel Goldman
  • OffchainLabs, Princeton, NJ, USA
Jeremy Clark
  • Concordia University, Montreal, Canada

Funding

  • Clark, Jeremy: acknowledges support for this research project from (i) the National Sciences and Engineering Research Council (NSERC), Raymond Chabot Grant Thornton, and Catallaxy Industrial Research Chair in Blockchain Technologies (IRCPJ/545498-2018), (ii) the Autorité des Marchés Financiers, and (iii) a NSERC Discovery Grant (RGPIN/04019-2021).

Acknowledgements

This paper includes useful comments from the reviewers, discussions with Edward W. Felten and Rachel Bousfield, and feedback from presentations at Devcon 6 and a16z crypto research.

Cite AsGet BibTex

Mahsa Moosavi, Mehdi Salehi, Daniel Goldman, and Jeremy Clark. Fast and Furious Withdrawals from Optimistic Rollups. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 22:1-22:17, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)
https://doi.org/10.4230/LIPIcs.AFT.2023.22

Abstract

Optimistic rollups are in wide use today as an opt-in scalability layer for blockchains like Ethereum. In such systems, Ethereum is referred to as L1 (Layer 1) and the rollup provides an environment called L2, which reduces fees and latency but cannot instantly and trustlessly interact with L1. One practical issue for optimistic rollups is that trustless transfers of tokens and ETH, as well as general messaging, from L2 to L1 is not finalized on L1 until the passing of a dispute period (aka withdrawal window) which is currently 7 days in the two leading optimistic rollups: Arbitrum and Optimism. In this paper, we explore methods for sidestepping the dispute period when withdrawing ETH from L2 (called an exit), even in the case when it is not possible to directly validate L2. We fork the most-used rollup, Arbitrum Nitro, to enable exits to be traded on L1 before they are finalized. We also study the combination of tradeable exits and prediction markets to enable insurance for withdrawals that do not finalize. As a result, anyone (including contracts) on L1 can safely accept withdrawn tokens while the dispute period is open despite having no knowledge of what is happening on L2. Our scheme also allows users to opt-into a fast withdrawal at any time. All fees are set by open market operations.

Subject Classification

ACM Subject Classification
  • Security and privacy
  • Security and privacy → Cryptography
Keywords
  • Ethereum
  • layer 2
  • rollups
  • bridges
  • prediction markets

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References

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