# Fraud Proof Challenge Period

Fraud Proofs have been suggested as a potential alternative for multiple oDAO duties. This section explores the security of optimistic fraud proofs and how it relates to the challenge period and other variables. The challenge period aims to protect against censorship attacks.

The first type of censorship to consider is on the block builder level: An attacker can attempt to get builders to exclude the fraud proof transaction from their blocks. If they succeed for every block in the challenge period the fraud goes unreported. One could imagine an attacker using MEV boost relays for something like this, but then a single validator building a block locally during the challenge window could thwart the attack.

The second type of censorship requires collusion with a majority of all validators. These validators would not only exclude the fraud proof, but would also fork out blocks from other validators that include it. This attack would require a high level of coordination since forking requires direct intervention of participants, but would be resilient against individuals building locally.

Besides the high level of difficulty of both attacks, [Ethereum is inherently censorship resilient](https://hackingdistributed.com/2016/07/05/eth-is-more-resilient-to-censorship/): censorship creates a DoS vector that could cost validators priority fees while it lasts. It is also [possible to detect forking censorship](https://ethresear.ch/t/reducing-challenge-times-in-rollups/14997) and the challenge period could increase when it is likely. Nevertheless, I believe it is possible to make censorship attacks crypto-economically not viable. These are the variables to consider in this context:

- The cost to exclude a transaction scales with the **reward** a challenger would receive for a successful fraud proof, because it determines the priority fee a challenger can pay for inclusion. The payment for censorship needs to make up for that lost reward.
- The cost also scales with the length of the challenge period or the **number of blocks**. Under block level censorship, the attacker needs to pay the reward every block, under forking censorship only for 51% of blocks.
- On the other side of the equation is the **value at risk**: how much an attacker stands to gain if the fraud goes unreported.

For the block level censorship, the math is relatively straight forward: Say for example that a challenger would earn 1 ETH for a successful fraud proof and is willing to pay up to 0.8 ETH in priority fees and the challenge period is 12 hours (3600 blocks). Then as long as value at risk is below 2880 ETH, block level censorship is not profitable since:
$$ 0.8 \cdot 3600 = 2880 $$
The math is less clear in the case of forking censorship. Since validators are colluding in this attack, the cost doesn't scale with number of blocks, but per member in the cartel: As a floor value, each member should demand at least the same amount they would make from including the fraud proof, but in practice the price might be much higher. Looking at [Rated Network](https://www.rated.network/?network=mainnet&view=nodeOperator&timeWindow=30d&page=1) in an absolute worst case scenario a 51% cartel would need over 20 members. So the safe level in the above example would be:
$$ 0.8 \cdot 20 = 16 $$

Looking at this in the context of some of the oDAO duties:

## Fraud Proof Scrubs
The value at risk is the 24 ETH that a minipool receives from the protocol. A reward of 1.2 ETH together with the existing 12 hour challenge period would provide safety against the floor value under the forking censorship scenario.

Note that while an attacker might create many minipools at once and then attempt to censor all fraud proofs, the reward and thus also the censorship cost scale linearly with the number of minipools.

## MEV Stealing Proofs
The value at risk is the penalty that would be applied, but no more than 8 + 2.4 ETH. We have a natural "challenge period" from the [minimum 27 hours](https://eth2book.info/bellatrix/annotated-spec/#min_validator_withdrawability_delay) before a validator can be withdrawn. A reward of 0.52 ETH would protect against forking censorship. As above, stealing with multiple minipools would not improve the attack.

## Balance Submission
At worst, the value at risk can be seen as the amount of rETH that can be minted at an incorrect ratio times the divergence from the correct price. But MEV bots would immediately start taking advantage of the incorrect price once the challenge period passes and the realizable profit would be even less than that. The value at risk can be limited by implementing [guardrails] or scaling the challenge period based on the price delta of the update.

To protect against forking censorship, a sizeable reward would be necessary. Say for example that 20k ETH worth of rETH can be minted and we limit the price delta to 1%, then a 10 ETH reward would be sufficient.