Base Ships Fault Proofs In Bid For Stage 1 Decentralization

Base, Coinbase’s booming Layer 2 network, is on the cusp of achieving the coveted status of Stage 1 decentralization.

On Oct. 30, Base announced that fault proofs are now on Base mainnet, following more than three months of testnet vetting.

Fault proofs allow anyone to participate in validating or contesting transactions, unlocking permissionless state validation. Previously, only Base’s centralized proposer could submit the network’s state root to the Ethereum mainnet — a mechanism described by Vitalik Buterin, Ethereum’s chief scientist, as Stage 0 decentralization.

“Today, we’re taking the next important step in decentralizing the network: fault proofs are now live on Base Mainnet,” Base said. “This enables a decentralized approach to proposing and validating L2 state, and paves the way towards more community participation.”

Permissionless fault proofs

Base is an optimistic rollup built on Base’s OP Stack. Optimistic rollups maintain a seven-day delay on withdrawing assets to the Ethereum mainnet, allowing a substantial amount of time for fraudulent state roots to be identified and challenged.

Entities that successfully challenge state roots will receive financial compensation in the form of a bond submitted by the fraudulent proposer, but must provide their own bond that can be slashed if the challenge is proven to be malicious and unsubstantiated.

Under Stage 1 decentralization, any network participant can use fault proofs to propose changes to the network’s state root. Base describes state roots as making “claims about the overall state of the chain and the legitimacy of the transactions on it.”

Users can also run open-source challenger software to challenge state roots within 3.5 days of its submission.

“With the Fault Proof System, the presence of even a single honest challenger ensures the network will remain secure,” Base said. “This fosters community-driven accountability and control, reducing the need to trust a centralized entity for state verification.

Base said it will continuously operate a challenger to help ensure that dishonest state roots are weeded out.

The recent sunsetting of the dYdX v3 chain provided an example of the benefits of maintaining a permissionless proof system for users. More than $100 million worth of assets were still held on dYdX v3 when its sunsetting began on Oct. 28, however, users can still withdraw assets moving forward owing to the network maintaining validity proofs.

Stage 1 decentralization

In order to achieve Stage 1 decentralization, Buterin calls on Layer 2 networks to establish a “security council” of external stakeholders, such as prominent members of the Ethereum ecosystem. With consensus from a chain’s operator, security councils have the ability to override fault proofs in the event of a bug.

Base said it expects to launch a security council in the coming months.

According to L2beat, only Arbitrum One, OP Mainnet, ZKsync Lite, and dYdX v3 have reached Stage 1 decentralization, while DeGate v1 and Fuel v1 are at Stage 2 decentralization.

Stage 2 decentralization is achieved when all smart contract upgrades are subject to a 30-day delay, and a network's security council can only intervene in the event that multiple conflicting state roots pass through the contestation process.

Base’s L2 dominance

Based on a seven-day moving average, Base is currently the top Layer 2 network by active users with 1.24 million and transaction count with 6.93M daily transactions, beating out Arbitrum with 193,000 transactions and 1.62 million users, according to GrowThe Pie.

Base is also the top Layer 2 by total value locked (TVL) in DeFi protocol with $2.72 billion, beating out Arbitrum by 10%, according to DeFi Llama. However, Arbitrum leads by network TVL with $13.9 billion — $2.2 billion of which is the project’s ARB token — compared to Base’s $8.11 billion, according to L2beat.