OMG Network

Funds can be stolen if

1. there are fraudulent exits which nobody reported. Fraud proofs assume that every exit is checked by at least one honest and able party (CRITICAL),
2. users are unable to withdraw in a mass exit event,
3. the source code of unverified contracts contains malicious code (CRITICAL).

Funds can be lost if

4. the external data becomes unavailable (CRITICAL).

Users can be censored if

5. the operator refuses to include their transactions. They can still exit the system.

MEV can be extracted if

6. the operator exploits their centralized position and frontruns user transactions.

Fraud proofs apply to exits only

The internal system state is not subject to any checks. Only exits from the system can be challenged. This places a much higher burden on potential validators, as they have to monitor all user activity and not only the single state.

• Funds can be stolen if there are fraudulent exits which nobody reported. Fraud proofs assume that every exit is checked by at least one honest and able party (CRITICAL).

Data is not stored on chain

The transaction data is stored on a plasma chain and is not recorded on the Ethereum main chain.

• Funds can be lost if the external data becomes unavailable (CRITICAL).

The system has a centralized operator

The operator is the only entity that can propose blocks. A live and trustworthy operator is vital to the health of the system.

• MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.

Users can independently exit the system

Independent exit allows the users to escape censorship by withdrawing their funds. The system allows users to withdraw their funds by submitting a transaction directly to the contract on-chain.

• Users can be censored if the operator refuses to include their transactions. They can still exit the system.

Regular exit

The user executes the withdrawal by submitting a transaction on L1 that requires a merkle proof of funds.

The mass exit problem is unsolved

In case the operator is malicious all users need to exit within a predetermined time frame. Users that do not manage to do this will lose their funds.

• Funds can be stolen if users are unable to withdraw in a mass exit event.