Optimistic rollups, a technology similar to our Subspace domains, are widely used today, with Arbitrum, Optimism, and Base being the top three Layer 2 (L2) projects, accounting for 52%, 29%, and 4% of all L2 value, respectively. This totals to $13.6B in locked value as of Dec 12, 2023, according to L2 Beat.
However, current optimistic rollups face two key technical challenges. First, the waiting time for withdrawals, also known as the dispute or challenge period, is often lengthy—currently at 7 days for the top three rollups. Second, implementation complexities exist, with fraud proofs not being enabled for Optimism and Base, and Arbitrum restricting fraud proof submissions to a few “whitelisted” parties.
Subspace addresses these challenges using two key techniques. First, we make fraud proofs easy to generate and submit through our unique Execution-Receipt structure. And we allow any domain operator to submit fraud proofs. Additionally, we give higher priority to fraud proofs for processing. Second, we don’t require smart contracts for processing fraud proofs, reducing complexity related to smart-contract security and upgradability. These techniques allow us to consider a much shorter dispute period (say, one day or less) and implement fraud proofs more efficiently.
For users and applications that find a one-day dispute period too long, we can leverage existing techniques for fast withdrawals and cross-domain transfers through (trustless) third-party service providers, like tradeable exits.
On a separate note, the economic security of optimistic rollups is still not well understood. In the coming weeks, we will explore this topic to provide insights into the economic security of Subspace domains.