Polygon Hermez

Funds can be stolen if

1. the cryptography is broken or implemented incorrectly,
2. the operators trigger a false alarm during withdrawal (CRITICAL),
3. a contract receives a malicious code upgrade. There is a 7 days delay on code upgrades.

Users can be censored if

4. the operator refuses to include their transactions and users lack resources to propose blocks themselves.

Validity proofs ensure state correctness

Each update to the system state must be accompanied by a ZK Proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. Once the proof is processed on the Ethereum blockchain the L2 block is instantly finalized.

1. ZK-Proofs - Hermez documentation

Zero knowledge SNARK cryptography is used

Despite their production use ZK-SNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition ZK-SNARKs require a trusted setup to operate.

• Funds can be stolen if the cryptography is broken or implemented incorrectly.

1. ZK-Proofs - Hermez documentation
2. Multi-party Computation for the Trusted Setup - Hermez documentation

All data required for proofs is published on chain

All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.

1. Data Availability - Hermez documentation

There is no central operator

The system runs an auction in which anyone can bid to become the operator for a set number of blocks. The operator will be able to propose blocks and collect fees during this window. Hermez will also run a operator known as boot coordinator that will propose blocks in case no one bids in the auction. This operator can be removed by the governance.

1. Forging Consensus Protocol - Hermez documentation
2. Boot Coordinator - Hermez documentation

Users can force any transaction

Because the block production is open to anyone if users experience censorship from the operator they can propose their own blocks which would include their transactions.

• Users can be censored if the operator refuses to include their transactions and users lack resources to propose blocks themselves.

1. Can coordinators censor transactions? - Hermez documentation

Regular exit

The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is proven the funds become available for withdrawal on L1. Finally the user submits an L1 transaction to claim the funds. This transaction requires a merkle proof. This operation cannot be performed if the withdrawal exceeds certain threshold.

1. Withdrawing Funds from Hermez - Hermez documentation

Forced withdraw

The user submits the withdrawal request on L1. This forces the operators to pick up the request before other L2 transactions. A block still needs to be proved, the user still submits a merkle proof, and the funds threshold still cannot be exceeded.

1. Force Exit - Hermez documentation

Delayed withdraw

When the user does a regular or forced withdraw and their funds exceed a certain threshold a timer activates. After a specified time has passed and the emergency mode has not been activated the funds can be withdrawn.

1. Withdrawal Delayer Mechanism - Hermez documentation

Emergency mode

When the user does a regular or forced withdraw and their funds exceed a certain threshold a timer activates. The operators can now trigger emergency mode and transfer the user's funds to the governance.

• Funds can be stolen if the operators trigger a false alarm during withdrawal (CRITICAL).

1. Withdrawal Delayer Mechanism - Hermez documentation