💰 Economic Security: Bonds & Slashing
Discover how financial incentives keep sequencers honest
Understand how optimistic rollups stay secure
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0 / 5 completed💰 Economic Security Model
Fraud proofs rely on economic incentives to secure the network. By making attacks more expensive than they're worth, optimistic rollups create a game-theoretic security model.
🎮 Attack Profitability Calculator
Adjust the parameters to see when fraud becomes economically rational (or irrational). This demonstrates how protocol designers calibrate security.
Net Expected Value: $-8.5M
SECURE: Attack is economically irrational. Expected loss exceeds expected gain.
⚖️ Game Theory of Fraud Proofs
Bond Requirement
Sequencers must post a large bond (typically millions of dollars). This bond can be slashed if fraud is proven, making attacks extremely costly.
Validator Rewards
Validators who successfully challenge fraud earn a portion (50-100%) of the slashed bond. This incentivizes active monitoring and dispute submission.
1-of-N Honest Assumption
Security requires just ONE honest validator monitoring the chain. As long as one validator is honest and active, fraud will be caught and penalized.
Time-Value Tradeoff
Longer challenge periods increase security but delay withdrawals. This creates a UX-security tradeoff that protocols must balance carefully.
🛡️ Security Mechanisms
- •Large Bonds: Make fraud economically irrational
- •Validator Rewards: Incentivize monitoring
- •Slashing: Automatic penalty execution
- •Reputational Cost: Loss of sequencer position
⚠️ Attack Scenarios
- •Invalid State: Steal funds via false transitions
- •Double Spend: Spend same funds twice
- •Censorship: Exclude specific transactions
- •Data Withholding: Prevent validation
📊 Real-World Bond Sizes
Note: Exact bond sizes may vary and are subject to protocol governance decisions. Bonds must be large enough to deter attacks on the entire rollup state.
💡 Key Economic Insight
The beauty of fraud proofs is that they make security economically inevitable rather than cryptographically enforced. As long as validator rewards exceed monitoring costs, and bonds exceed potential attack profits, rational actors will secure the network—even if the sequencer tries to cheat. This is why optimistic rollups can achieve strong security with just the assumption that 1 out of N validators is honest.