StarkNet

Funds can be stolen if

1. a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).

Funds can be lost if

2. the proof system is implemented incorrectly.

Funds can be frozen if

3. the operator censors withdrawal transaction.

Users can be censored if

4. the operator refuses to include their transactions.

MEV can be extracted if

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

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. What is StarkNet

Zero knowledge STARK cryptography is used

Despite their production use ZK-STARKs 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.

1. STARK Core Engine Deep Dive

All data required to reconstruct rollup state is published on chain

State diffs are publish on-chain as 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.

1. On-chain Data
2. State Updates (Trades)

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. Typically, the Operator is the hot wallet of the StarkNet service submitting state updates for which proofs have been already submitted and verified.

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

1. StarkNet operator Etherscan address

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.

1. Censorship resistance of StarkNet - Forum Discussion

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 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.

1. Withdrawing is based on l2 to l1 messages - StarkNet documentation

Emergency exit

There is no generic escape hatch mechanism as StarkNet cannot be frozen. Application developers can develp app-specific escape hatches that could allow users to exit funds when L2 app is frozen. Note that freezing mechanizm on L2, to be secure, requires anti-censorship protection.

1. StarkNet code