Arbitrum Nova logoArbitrum Nova

TVL: $4.03 M

-10.93% / 7 days

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Tokens:

News

Description

Arbitrum Nova is an AnyTrust chain that aims for ultra low transaction fees. Nova differs from Arbitrum One by not posting transaction data on chain, but to Data Availability Committee.

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Risk summary

Technology

Fraud proofs ensure state correctness

After some period of time, the published state root is assumed to be correct. For a certain time period, usually one week one of the whitelisted actors can submit a fraud proof that shows that the state was incorrect.

  • Funds can be stolen if none of the whitelisted verifiers checks the published state. Fraud proofs assume at least one honest and able validator (CRITICAL).
  1. Executing and Securing the Chain - Arbitrum documentation
  2. RollupUserFacet.sol#L281 - Etherscan source code, onlyValidator modifier

Data is not stored on chain

Users transactions are not published on-chain, but rather sent to several well known and trusted parties, also known as committee members (DAC). New transaction batch needs a BLS signature with the required DAC quorum, for example 9/10. This signature is not verified by L1, however external Validators will skip the batch if BLS signature is not valid resulting. This will reslt in a fraud proof challenge if this batch is included in a consequitive state update. It is assumed that at least one honest DAC member that signed the batch will reveal tx data to the Validators if Sequencer decides to act maliciously and withhold the data.

  • Funds can be lost if the external data becomes unavailable (CRITICAL).
  • Users can be censored if the committee restricts their access to the external data.
  1. AnyTrust Chains - Arbitrum documentation

Operator

The system has a centralized sequencer

While proposing blocks is open to anyone the system employs a privileged sequencer that has priority for submitting transaction batches and ordering transactions.

  • MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.
  1. Validators - Arbitrum documentation
  2. If the sequencer is malicious - Arbitrum documentation

Users can force any transaction

Because the state of the system is based on transactions submitted on-chain and anyone can submit their transactions there it allows the users to circumvent censorship by interacting with the smart contract directly.

    1. Submitting Transactions - Arbitrum documentation

    Withdrawals

    Regular exit

    The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is finalized the funds become available for withdrawal on L1. The process of block finalization usually takes several days to complete. Finally the user submits an L1 transaction to claim the funds. This transaction requires a merkle proof.

    • Funds can be frozen if the centralized validator goes down. Users cannot produce blocks themselves and exiting the system requires new block production (CRITICAL).
    1. L2 to L1 Messages Lifecycle - Arbitrum documentation
    2. Rules for Confirming or Rejecting Rollup Blocks - Arbitrum documentation
    3. Mainnet for everyone - Arbitrum Blog

    Tradeable Bridge Exit

    When a user initiates a regular withdrawal a third party verifying the chain can offer to buy this withdrawal by paying the user on L1. The user will get the funds immediately, however the third party has to wait for the block to be finalized. This is implemented as a first party functionality inside Arbitrum's token bridge.

      1. Tradeable Bridge Exits - Arbitrum documentation

      Other considerations

      EVM compatible smart contracts are supported

      Arbitrum Nova uses Nitro technology that allows running fraud proofs by executing EVM code on top of WASM.

      • Funds can be lost if there are mistakes in the highly complex Nitro and WASM one-step prover implementation.
      1. Arbitrum Nitro Sneak Preview

      Smart Contracts

      A diagram of the smart contract architecture
      A diagram of the smart contract architecture

      The system consists of the following smart contracts:

      The current deployment carries some associated risks:

      • Funds can be stolen if a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).