DeGate V1 – L2BEAT

Website	degate.com
App	app.degate.com
Docs	docs.degate.com
Repository	github.com/degatedev/protocols
Social	@DeGateDex Discord youtube.com degate mirror.xyz/0x078a601f492043C8e7D0E15B0F8815f58b4c342f

4

Milestones

DeGate Mainnet Beta Redeploy

2023 Oct 27th

DeGate redeploy Mainnet Beta with the ability to upgrade the smart contracts, with a time delay.

Learn more

5

Risk summary

Sequencer failureState validationData availabilityExit windowProposer failure

State validation

ZK proofs (SN)

zkSNARKS are zero knowledge proofs that ensure state correctness, but require trusted setup.

Data availability

On chain

All of the data needed for proof construction is published on chain.

Exit window

30d

Users have 30d to exit funds in case of an unwanted upgrade. There is a 45d delay before an upgrade is applied, and withdrawals can take up to 15d to be processed.

Sequencer failure

Force via L1

Users can force the sequencer to include a withdrawal transaction by submitting a request through L1 with a 0.01 ETH fee. If the sequencer is down for more than 15d, users can use the exit hatch to withdraw their funds. The sequencer can censor individual deposits, but in such case after 15d users can get their funds back.

Proposer failure

Use escape hatch

Users are able to trustlessly exit by submitting a Merkle proof of funds.

7

Rollup stage

DeGate V1 is a

Stage 2

ZK Rollup.

Stage 0

4 requirements met

Stage 1

2 requirements met

Stage 2

1 requirement met

Learn more about Rollup stages

Please keep in mind that these stages do not reflect rollup security, this is an opinionated assessment of rollup maturity based on subjective criteria, created with a goal of incentivizing projects to push toward better decentralization. Each team may have taken different paths to achieve this goal.

8

Technology

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.

Operator - DeGate design doc

Zero knowledge SNARK cryptography is used

Despite their production use zkSNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition zkSNARKs require a trusted setup to operate.

Funds can be stolen if the cryptography is broken or implemented incorrectly.

Operator - DeGate design doc

All data required for proofs is published on chain

All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.

Introduction - DeGate design doc

9

State derivation

Node software

Node software source code can be found here.

Compression scheme

No compression is used.

Genesis state

The system does not begin with a genesis state; instead, it initiates from a zero state, as referenced in CreateEmptyState.

Data format

DeGate bundles off-chain transactions into zkBlocks and submits them to the blockchain. zkBlock data definition is documented here.

10

Operator

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 force exit the system

Force exit allows the users to escape censorship by withdrawing their funds. The system allows users to force the withdrawal of funds by submitting a request directly to the contract on-chain. The request must be served within a defined time period. If this does not happen, the system will halt regular operation and permit trustless withdrawal of funds.

Users can be censored if the operator refuses to include their transactions. However, there exists a mechanism to independently exit the system.

Forced Withdrawals - DeGate design doc

11

Withdrawals

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.

Withdraw - DeGate design doc

Forced exit

If the user experiences censorship from the operator with regular exit they can submit their withdrawal requests directly on L1. The system is then obliged to service this request. Once the force operation is submitted and if the request is serviced, the operation follows the flow of a regular exit.

Emergency exit

If the 15d deadline passes and the forced exit is still ignored the user can put the system into Withdrawal Mode, disallowing further state updates. In that case everybody can withdraw by submitting a merkle proof of their funds with their L1 transaction.

12

Permissions

The system uses the following set of permissioned addresses:

BlockVerifier Owner 0xacD3…7F82

This address is the owner of the BlockVerifier contract.

Block Submitters 0x4e3F…3b8a

Actors who can submit new blocks, updating the L2 state on L1.

Degate HomeDAO2 Multisig 0x2028…da52

Actor allowed to upgrade the ExchangeV3 and DefaultDepositContract contracts. This address is the owner of the following contracts: LoopringIOExchangeOwner, LoopringV3, DefaultDepositContract. Can add or remove block submitters. Can change the forced withdrawal fee up to 0.25 ETH. Can change a way that balance is calculated per contract during the deposit, allowing the support of non-standard tokens.

13

Smart contracts