Arbitrum

Arbitrum, a leading Ethereum Layer 2 scaling solution, has taken a significant step toward a more decentralized future with the launch of its <a href="https://tradedog.io/arbitrums-bold-live-on-testnet/" rel="noopener noreferrer nofollow">Bounded Liquidity Delay</a> (BOLD) protocol on a public testnet. BOLD represents a next-generation dispute resolution mechanism that leverages interactive fraud proofs, fundamentally transforming how Arbitrum secures its network.Understanding BOLDBOLD stands for Bounded Liquidity Delay. It’s a dispute resolution protocol designed to enable permissionless validation on Arbitrum chains. In simpler terms, BOLD allows anyone to participate in securing the network by validating transactions and withdrawals. This replaces the current system where a select group of permissioned validators performs these tasks.Why is BOLD Important?The current dispute resolution on Arbitrum relies on fraud proofs submitted by validators. However, this system is susceptible to “delay attacks.” In such an attack, malicious actors might attempt to delay the confirmation of valid withdrawals intentionally. This can lead to resource exhaustion attacks, where honest parties&#39; resources are drained.BOLD addresses delay attacks by introducing two mechanisms:<ul><li>A fixed upper time limit of 7 days for resolving disputes. If the challenger fails to respond timely, the honest party’s claims are automatically confirmed.</li><li>Challenges between the honest party and multiple malicious adversaries can happen in parallel.</li></ul>Permissionless ValidationBOLD introduces permissionless validation, allowing anyone to become a validator and contribute to securing the network. This ensures timely confirmations and mitigates the effectiveness of delay attacks.Simplified Steps on How BOLD Works<ol><li>Assertion Creation: Validators propose a new state of the blockchain by claiming a series of transactions result in a specific state. They bond their funds to this claim.</li><li>Challenge Period: During a set time, anyone can dispute the proposed state by submitting a challenge and bonding their own funds.</li><li>Opening a Challenge: If a validator disagrees with the proposed state, they open a challenge by asserting an alternative state, leading to two competing states.</li><li>Dispute Resolution: Validators bisect their respective state histories to pinpoint the exact disagreement, breaking it down to a single computation step.</li><li>One-Step Proof: Validators submit proofs for the single disputed step to a smart contract on Ethereum. The contract verifies the proof and determines the correct state.</li><li>Confirmation: The correct state is confirmed, and the validator who proposed it can withdraw their bond. The dishonest validator&#39;s bond is forfeited.</li><li>Time-Limited Challenges: Each dispute stage has a fixed time limit. If a party fails to respond in time, the other party’s claim is accepted.</li><li>Economic Incentives and Spam Protection: High bonds discourage malicious behavior, and no special permissions are needed for honest participation.</li><li>Reimbursements and Penalties: The Arbitrum DAO decides how to handle funds from malicious actors, including reimbursing honest parties for their costs. All steps can happen simultaneously, ensuring timely dispute resolution.</li></ol>Key Features of BOLD for Arbitrum<ul><li>Permissionless Validation: Anyone can participate in securing the network and validating transactions.</li><li>Enhanced Security: Fixed time limits and the “single vs. many” dynamic reduce the impact of delay attacks.</li><li>Pooled Challenge Funding: Individuals with limited resources can contribute to network security.</li><li>Strong Mathematical Foundations: Formal safety proofs and ongoing audits ensure robustness.</li></ul>BOLD on TestnetThe launch of BOLD on a public testnet allows the Arbitrum team to gather valuable feedback from the community. This feedback is essential for identifying and addressing any potential issues before deploying BOLD to the mainnet. The testnet phase also plays a key role in refining validator tools and fostering active community participation around the protocol.Road Ahead for BOLDBOLD is currently undergoing rigorous testing on the public testnet. This phase is crucial for gathering feedback, strengthening the protocol’s design, and ensuring a smooth transition to the mainnet. The testnet serves as a valuable platform for refining validator tools and fostering community involvement. By successfully navigating the testnet phase, the Arbitrum team positions BOLD for a robust and secure future.

Arbitrum’s BOLD Live on Testnet

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