Paradex
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About
Paradex is a high-performance crypto-derivatives exchange built on a Starknet Appchain.
Badges
About
Paradex is a high-performance crypto-derivatives exchange built on a Starknet Appchain.
Funds can be stolen if
Funds can be lost if
Funds can be frozen if
Users can be censored if
MEV can be extracted if
Sequencer failure
No mechanismThere is no mechanism to have transactions be included if the sequencer is down or censoring.
State validation
ZK proofs (ST)STARKs are zero knowledge proofs that ensure state correctness.
Data availability
Onchain (SD)All of the data (SD = state diffs) needed for proof construction is published onchain.
Exit window
NoneThere is no window for users to exit in case of an unwanted regular upgrade since contracts are instantly upgradable.
Proposer failure
Cannot withdrawOnly the whitelisted proposers can publish state roots on L1, so in the event of failure the withdrawals are frozen.
Paradex is a 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. These proofs are then verified on Ethereum by a smart contract.
Zero knowledge STARK cryptography is used
Despite their production use zkSTARKs proof systems are still relatively new, complex and they rely on the proper implementation of the polynomial constraints used to check validity of the Execution Trace.
Funds can be lost if the proof system is implemented incorrectly.
All data required to reconstruct rollup state is published on chain
State diffs are publish onchain as blob or calldata on every state update. The state diffs contain information on every contact whose storage was updated, and additional information on contract deployments. From diffs full system state can be recovered. Contracts’ code is not published on L1, but can be trustlessly verified if available elsewhere.
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't force any transaction
There is no general mechanism to force the sequencer to include the transaction.
Users can be censored if the operator refuses to include their transactions.
Regular exit
The user initiates the withdrawal by submitting a regular transaction on this chain. 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 does not require a merkle proof. Note that the withdrawal request can be censored by the Sequencer.
Funds can be frozen if the operator censors withdrawal transaction.
Emergency exit
There is no generic escape hatch mechanism as Starknet cannot be forced by users into a frozen state. Note that a freezing mechanism on L2, to be secure, requires anti-censorship protection.
The system uses the following set of permissioned addresses:
Can upgrade implementation of the system, potentially gaining access to all funds stored in the bridge and potentially allowing fraudulent state to be posted. Currently there is 0s delay before the upgrade.
Can upgrade implementation of SHARP Verifier, potentially with code approving fraudulent state. Currently there is 0s delay before the upgrade.
A Gnosis Safe with 2 / 4 threshold. SHARP Verifier Governor.
Used in:
Those are the participants of the SHARPVerifierGovernorMultisig.
Allowed to post state updates. When the operator is down the state cannot be updated.
Can upgrade implementation of the USDC Escrow, potentially gaining access to all funds stored in the bridge. Currently there is 0s delay before the upgrade.
The system consists of the following smart contracts on the host chain (Ethereum):
CallProxy for GpsStatementVerifier.
Proxy used in:
Starkware SHARP verifier used collectively by Starknet, Sorare, ImmutableX, Apex, Myria, rhino.fi and Canvas Connect. It receives STARK proofs from the Prover attesting to the integrity of the Execution Trace of these Programs including correctly computed state root which is part of the Program Output.
Implementation used in:
MemoryPageFactRegistry is one of the many contracts used by SHARP verifier. This one is important as it registers all necessary onchain data.
Implementation used in:
Same as MemoryPageFactRegistry but stores facts proved by the old SHARP Verifier, used as a fallback.
Implementation used in:
Value Locked is calculated based on these smart contracts and tokens:
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).
