AIP: Funds to bootstrap the first BoLD validator - Bond sentiment.

Description

Non-Constitutional Proposal

Abstract

The Arbitrum Foundation is seeking 4,234 ETH, for Assertion and challenge bonds - to allow the Arbitrum Foundation to run a BoLD validator and fulfill the role of being the first, but not necessarily the only, honest and active proposer.

This proposal is contingent on the AIP upgrade the DAO-governed chains to use BoLD being approved by the ArbitrumDAO. If the AIP to upgrade the DAO-governed chains to use BoLD does not pass - then the Arbitrum Foundation will return these funds, to the ArbitrumDAO within 30 days.

Motivation

The AIP to upgrade the DAO-governed chains to use BoLD only proposes the technical upgrade and intentionally does not yet introduce an economic incentive mechanism to grow the validator set (since Arbitrum only needs 1 honest, active proposer at any point in time). Without this incentive, the ArbitrumDAO holds the risk that no entity will fulfill the role of being the first honest party to secure Arbitrum One. By adopting this proposal, the ArbitrumDAO is appointing the Arbitrum Foundation to be the first active proposer for Arbitrum One.

Key Terms

• Active proposer. A proposer who is actively posting assertions and helping advance the chain. Validators are not considered active proposers until they successfully propose an assertion with a bond. In order to become an active proposer for Arbitrum One, post-BoLD, a validator has to propose an L2 state assertion to Ethereum. If they do not have an active bond on L1, they then need to attach a bond to their assertion in order to successfully post the assertion. Subsequent assertions posted by the same address will simply move the already-supplied bond to their latest proposed assertion. Meanwhile, if an entity, say Bob, has posted a successor assertion to one previously made by another entity, Alice, then Bob would be considered by the protocol to be the current active proposer. Alice would no longer be considered by the protocol as the active proposer and once Alice’s assertion is confirmed, then Alice gets her assertion bond refunded. There can only be 1 “active” proposer at any point.
• Assertion. A claim posted to the Arbitrum rollup contracts on Ethereum L1 about the Arbitrum L2 execution state. Each claim consumes messages from the Arbitrum rollup inbox contract that are ordered by the Sequencer.
• Assertion bond. Creating an assertion in the rollup contracts requires the proposer to join the validator set by putting up a bond, in the form of 3,600 ETH. Subsequent assertions posted by the same party do not require more bonds, instead, the protocol always considers validators to be bonded to their latest posted assertion until they withdraw.
• Challenge bond. The challenge process in BoLD requires a proposer to post a bond whenever they want to challenge a malicious (and invalid) assertion from a dishonest proposer. This applies to the block level, big-step sub-challenge, and one-step sub-challenge levels, as part of the interactive dispute game played between challengers.
• One honest party. In BoLD, a single, honest party can protect the integrity and liveness of the system. While only a single party is required to act, it is still an open and permissionless system, allowing anyone to step up at any time.
• Proposer. An agent who looks up the list of ordered transactions, executes them off-chain, and then proposes a claim on the final execution output by posting an assertion on-chain. A proposer must have a bond deposited into the BoLD rollup contracts on Ethereum to be considered eligible, by the protocol, to post assertions.
• Service fee. A fee for proposers who are actively and successfully posting on-chain assertions which should amount to the same income that Ethereum validators receive over the same time period. The fee is paid for every on-chain assertion posted by the proposer once their assertion is confirmed. This fee removes the disincentive to lock up capital and be a proposer for the protocol and should not be viewed as an incentive or reward.

Budget Request

Assertion and Challenge Bonds

The Foundation is requesting 4,234 ETH from the ArbitrumDAO treasury to cover the bonds required to establish a single honest proposer with the capability to defend the system.

The requested ETH is a combination of:

• 3600 ETH required to post an assertion bond, and;
• Subsequent 555 ETH + 79 ETH for challenge bonds for one challenge.

The Arbitrum Foundation will deposit these funds in the [RollupCore.sol] contracts on L1 Ethereum for the validator. If the BoLD AIP passes, then the Arbitrum Foundation’s staked validator will be enabled to immediately act as a proposer for Arbitrum One.

Note: the Arbitrum Foundation is proposing to be the first active proposer, not the ONLY proposer. BoLD removes the reliance on a permissioned set of validators who are eligible to be proposers, and any interested parties and/or teams can permissionlessly run validators to become proposers for Arbitrum One upon a successful upgrade of the dispute protocol.

Steps to implement & timeline

1. Publication of an AIP to the ArbitrumDAO forums for engaged discussion and debate.
2. Temperature checks on Snapshot. a. Bond sentiment. Test whether the ArbitrumDAO may approve the Arbitrum Foundation’s request for 4234 ETH to run the first BoLD validator. b. Operational cost sentiment. Test whether the ArbitrumDAO may approve the additional service fee for active proposers (excluding the Arbitrum Foundation) and the reimbursement of L1 gas costs for running an active proposer, totalling 900 ETH.
3. Depending on the temperature check result: a. Continue to Tally. If there is strong consensus on both temperature checks, then the AIP will be published as one on-chain AIP on Tally for an on-chain vote. b. Re-iterate on numbers. If either temperature check is rejected by the DAO, then it will be iterated on and re-submitted for a temperature check again, until there is consensus.
4. Assuming a successful vote on-chain, the funds will be transferred to a multi-sig wallet controlled by the Arbitrum Foundation.
5. The Arbitrum Foundation will then deposit the funds in a validator that will be used to secure Arbitrum One, if the AIP to upgrade the DAO-governed chains to use BoLD is passed.

Payment facilitation, final costs & restrictions

The Arbitrum Foundation is requesting 4,234 ETH from the ArbitrumDAO to cover the following costs:

• 3600 ETH to run the first BoLD-enabled proposer for Arbitrum One, and
• 634 (555 + 79) ETH budget to counter one BoLD challenge.

All requested funds will be sent to a multi-sig controlled by the Arbitrum Foundation and the funds will be returned if the BoLD proposal is not approved by the ArbitrumDAO.

The ArbitrumDAO will have the authority to single-handedly return the funds to the ArbitrumDAO treasury by revoking the Arbitrum Foundation’s proposer at any time and returning the bonds back to the treasury. This will be implemented and enforced via the BoLD smart contracts:

• Withdrawal Address. The funds will be deposited into BoLD from the Arbitrum Foundation-controlled multi-sig address but the withdrawal address will be set to the ‘UpgradeExecutor’ contract on L1.
• Triggering Withdrawal. The ArbitrumDAO (via governance) or the Arbitrum Foundation will have the authority to trigger a withdrawal and the funds can only be sent to the pre-established withdrawal address (i.e. the ArbitrumDAO’s treasury).