Optimistic Challenge Process (OCP)
The Optimistic Challenge Process (OCP) is a critical component of the GOAT Network, designed to ensure the security and integrity of off-chain computations. By leveraging cryptographic proofs and decentralized protocols, OCP maintains trustlessness and decentralization, providing Bitcoin-level security for Layer 2 (L2) transactions. The GOAT-OCP enhances the security of the network’s consensus layer and finality layer, making it one of the most decentralized Bitcoin scaling solutions.
Key Features
- Trustlessness: Ensures that no single party can manipulate transactions.
- Decentralization: Distributes the verification process across multiple participants.
- Economic Incentives: Provides incentives for participants to act honestly and challenge fraudulent activities.
The GOAT-OCP Mechanism
Initial setup
- The Operator must deposit a bond as a license to operate on the network. This bond acts as a financial stake that can be forfeited in case of dishonest behavior.
Peg-In Process
- A user deposits Bitcoin into a pool managed by the GOAT Federation.
- The deposited asset is locked into a pre-signed n-of-n Multisig script, ensuring that only trustworthy third parties can unlock the asset.
Peg-Out Process
- The user initiates a withdrawal request.
- The Operator advances the equivalent amount of Bitcoin to the user.
- Using the proof-of-advance, the Operator requests the transfer of Bitcoin from the pool to their account.
Challenge Phase
- Any user can challenge the Operator’s actions by invoking the challenge script and paying a bond to start the challenge.
- The Operator must provide intermediate computation traces to prove the validity of their actions.
- If the challenge is successful, the Operator’s bond is forfeited to the challenger. If the challenge fails, the challenger’s bond is forfeited to the Operator.
Reimbursement
- If no challenge is raised within the challenge period (typically 2 weeks), the Operator is reimbursed.
- The redemption script activates after the challenge period expires, finalizing the transaction and releasing the assets.
Security Components
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One-Time Signature Scheme:
- Utilizes the Winternitz signature scheme for efficient signature and public key size.
- Each leaf of the TapTree represents an intermediate value, calculated using a one-time signature, ensuring the security and integrity of the transactions.
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Trustless Design:
- The GOAT-OCP relies on a 1-of-n honesty assumption, meaning that at least one participant must act honestly to ensure the security of the process.
- Even if all operators are dishonest, they cannot steal deposits; the worst they can do is burn them.
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Economic Incentives:
- The protocol ensures that honest participants are rewarded for challenging dishonest behavior.
- Dishonest participants lose their financial stake, providing a strong deterrent against fraudulent actions.
Decentralized Verification
The GOAT-OCP allows any participant to serve as a verifier, enhancing the network’s decentralization. During runtime, anyone can challenge an invalid assertion without being part of the initial group of verifiers, ensuring continuous and robust security for the network.
Finality and Settlement
The finality of off-chain computations is achieved through the fairness, liveness, and scalability of the Rollup network. The network consists of the consensus layer, execution layer, and settlement layer. The finality layer ensures the final settlement of Rollup transaction batches on Bitcoin, leveraging cryptographic proofs to maintain security and integrity.
By incorporating the Optimistic Challenge Process, the GOAT Network achieves a high level of security, decentralization, and trustlessness, making it a robust platform for decentralized applications and transactions on Bitcoin.