Offchain Labs introduces BOLD (Bounded Liquidity Delay), a dispute protocol that allows permissionless authentication for Arbitrum chains, along with providing a guarantee of longevity of the chain and minimum latency, and obstructs doubtful entities from increasing costs for entities with integrity.
Currently, Optimistic Rollup chains backing fraud proofs like Arbitrum One and Nova make settlements of state to Thereum. Authenticators upload claims regarding L2 that they feel are correct for a smart contract. Seven days are provided to contest the claims. On confirmation, L2 is accepted as right on Ethereum. In the case of a challenge protocol, it brings in entities forwarding fraud proofs to Ethereum to verify the right result of L2 implementation.
In the case of authentication on Arbitrum One and Nova, through fraud proofs, it is permission due to the fact that the dispute protocols are susceptible to denial of service threats. It is possible for a hostile authenticator to blow up funds to stop claims from being verified. Withdrawals from L2 to L1 get delayed in that case.
In this regard, Offchain Labs has come up with a fresh way of authenticating that provides a set upper limit of seven days delay once verified. No delay threats occur. Their protocol, BOLD, makes it possible for the authentication of Arbitrum chains to be permissionless, shifting them closer to decentralization. The requirement is for a sole authenticator to decide disputes on Ethereum.
All Layer 2 systems have to deal with delay issues when the need is to settle their state to Ethereum. BOLD has evolved from Arbitrum’s dispute mechanism creating a better approach. Disputes occurring in BOLD are connected to the determined implementation of an L2 state and not any special staker.
Offchain Labs is going public with its execution of BOLD. The code base consists of the execution of a challenge manager that is responsible for posting opinions on L2’s state and taking part in challenges against multiple hostile entities, and providing the right state. The execution is modular and is able to be incorporated into Arbitrum Orbit chains.
The auditing for BOLD has been conducted by Trail of Bits. The code base license is similar to Arbitrum Nitro. There is a requirement for further tooling to comprehend a complicated mechanism like this. To address this, Offchain Labs is creating a challenge visualizer and API.
Before the BOLD production commences, the need of the hour is to share suggestions for operating an Arbitrum Nitro devnet with BOLD challenges active. Formal proofs code for BOLD needs to be published, and a public testnet atmosphere needs to be created for the community to take part in challenge games. Depending on feedback, an AIP needs to be prepared.