These proofs primarily act as a safeguard against incorrect state transitions. Since they are only activated when inconsistencies are identified, they conserve computational resources, making them ideal for environments where scalability is a priority.
For example, Fraud proofs are crucial in Optimistic rollups to identify and handle invalid transactions. Whenever a transaction is approved, there's a specific dispute period where anyone can challenge the current state by presenting a valid fraud proof. If someone can prove a transaction is fraudulent during this window, it is nullified and the network readjusts to the previous state.
Fraud proofs are not without their cons. They require constant communication between multiple parties. This back-and-forth can lead to system disruptions and open the gates for dishonest behavior or other illicit actions.
The margin balance allocated to a position. Traders can manage risk by restricting the amount allocated to ...
When the price of an asset moves outside of a defined range or pattern, typically by breaking out of a supp...
A defunct Bitcoin exchange based in Japan that was once the largest in the world.