Understanding Midgard L2

Execution on Midgard L2 is designed to be efficient, secure, and scalable, leveraging the innovative architecture of optimistic rollups adapted to the UTxO model

Execution Framework

Midgard's Optimistic Rollup Architecture

At the core of Midgard’s execution framework lies its optimistic rollup architecture, a sophisticated system designed to scale Cardano while maintaining its security guarantees. This architecture combines a validator network, efficient state management, UTxO-optimized fraud proofs, and carefully balanced economic incentives to create a high-throughput, secure Layer 2 solution tailored specifically for Cardano

Operator Network

Midgard implements an on-chain linked list of operators who manage the L2 state and submit state transitions to Cardano’s L1.
 
Operators must deposit ADA into a bond contract on L1 to secure their role. The protocol uses a rotating schedule for operators, with each getting an exclusive turn to process L2 events and commit their block of events. 
 
They verify transactions, update the state, prepare state commitments that summarize these changes, and submit state updates to the L1 State Validator smart contract

State Management

Midgard’s state management revolves around a State Validator smart contract on Cardano’s L1, optimized for the eUTxO model. 

 

The system maintains three key components: the current state, incoming transactions, and the next state, all represented as Merkle roots. This compact representation allows for efficient state transitions and verification. The current state encapsulates valid L2 transactions and balances, while incoming transactions await processing. The next state represents the outcome after processing these transactions

UTxO-Optimized Fraud Proofs

The integrity of Midgard is upheld by a robust fraud proof system, which is tailored to Cardano’s eUTxO model. It offers unique advantages for optimistic rollups.

It enables local state validation, allowing for parallel processing of fraud proofs and reduced computational overhead. The system supports granular transaction validation, targeting specific aspects like input validity, output correctness, and script execution integrity. Utilizing Merkle-based state representation, Midgard efficiently manages and proves the L2 state.

A sophisticated evaluation mechanism handles complex fraud proofs through a multi-step evaluation thread.

This bespoke approach results in faster, more cost-effective fraud detection compared to account-based blockchain rollups

Economic Incentives

Operators stake ADA as a bond, risking forfeiture for dishonest behavior. Watchers who submit valid fraud proofs are incentivized with rewards, encouraging oversight of the network.

The challenge period allows for scrutiny of state transitions. This economic structure creates a balanced system of rewards and penalties, ensuring high integrity within the network and aligning the interests of all participants with the overall health of the protocol.

Optimistic Rollups

Optimistic rollups are a cutting-edge scaling solution that processes transactions off-chain, reducing the computational load on the main blockchain. By assuming transactions are valid by default and only verifying them if a fraud proof is submitted, optimistic rollups significantly increase throughput and efficiency.

Midgard uses optimistic roll-up technology, which assumes transactions are valid by default and only checks them if a fraud-proof is submitted. This reduces the computational load on the L1 and improves efficiency through a bespoke Cardano native design.

 

Seamless Integration with Cardano

Midgard seamlessly integrates with Cardano’s Layer 1 (L1) blockchain. It uses smart contracts to manage state transitions and employs Merkle roots for efficient proof submissions, ensuring that off-chain transactions are secure and verifiable.

Fraud Proof System

A foundational component of Midgard’s execution framework is thes fraud proof system. This mechanism ensures the integrity and correctness of transactions by allowing participants to challenge invalid state updates

Challenge Period

After a state update is submitted, there is a designated challenge period during which participants can submit fraud proofs to contest the validity of the update

Submitting Fraud Proofs

To submit a fraud proof, a challenger provides evidence that a specific transaction or state transition is fraudulent. This involves providing the original transaction data and Merkle proofs

Challenge-Response Mechanism

When a watcher contests the validity of a state update, both the watcher and the operator who published the disputed state must actively engage in proving or disproving the claim

Types of Fraud Proofs

Economic Incentives

Midgard’s execution framework is reinforced by strong economic incentives designed to promote honest behavior and discourage fraudulent activities

Operator Bonds

Operators are required to post bonds, which are at risk of being slashed if they attempt to submit fraudulent transactions or invalid state updates

Watcher Rewards

Watchers who successfully submit fraud proofs are rewarded, incentivizing the community to actively monitor and maintain the integrity of the system

Penalties for Dishonesty

Operators stake ADA bonds and face slashing for dishonest behavior, while Watchers must stake a smaller bond for challenges, creating a balanced economic incentive system
Github X-twitter Youtube
Midgard Protocol
© 2024 midgardprotocol.
Midgard
Midgard Socials
Anastasia Labs

Login