Notes on simple tokenomics for a PoS utility token Source: https://www.cs.huji.ac.il/~noam/pages/Tokenomics.pdf Basics Sybil-resistance:proof of work proof of humanity proof of stakeStake serves as a collateral for his proper operation in the system Get rewarded for workRewards come from user fees or newly minted tokens/inflation

Analysis and considerations on state rental Note: this piece was compiled in Dec 2023 The problem – State size growth In EVM compatible chains “state refers to data such as an account’s (or smart contract’s) balance, nonce, a contract’s bytecode, or the data contained in a contract’s storage cells” (source). A blockchain’s state constantly grows as the number of accounts, smart contracts, and transactions increases. L2s scaling Ethereum will process orders of magnitude more transactions than the base layer, and thus their state is expected to grow faster. The bigger the state size, the bigger the computing, storage, and cost requirements for full nodes to process the chain. This may result in slower processing times, fewer nodes, and potential centralization. Even though the size of blocks is capped by the gas limit on most protocols, it does not provide a solution since it only limits the growth rate and does not address the problem of state growth itself. Blockchain nodes use three types of resources to process transactions: computation, bandwidth, and storage space. For the first two, it is fine to pay a one-time transaction fee, as they will be available again to process the next block. However, if storage space is occupied permanently, a one-time fee is not sufficient to ensure economic balance and provide sufficient compensation for occupying a full node’s storage space continuously. This leads to the tragedy of the commons where individual users with no restrictions or limitations will deplete a system’s shared resource which in this case is the storage space of full nodes. When analyzing the problem of state growth, the focus should be more on the effect of state growth on node performance and decentralization, instead of measuring pure physical storage costs which is expected to decline anyway over the coming years. State growth impacts users with consumer-grade hardware more than specialized and resource-rich block producers.

Analysis of Taiko's prover concepts Acknowledgements: Special thanks to Lisa and Brecht from the Taiko team for their valuable comments and suggestions. Introduction Among the scaling solutions of Ethereum the rollup-centric approach has been taking central-stage in the past years. While optimistic rollups have the early-starter advantage, the development of zk-rollups has gained exponential traction. One of the key players at the heart of zk-rollups is the prover that generates the zero-knowledge proof (also called validity proofs) for the batch of transactions "rolled-up" by the block proposer. A well-crafted prover selection and incentive mechanism is paramount to ensure security, resiliance, decentralization, trustlessness as well as censorship-resistance of a zk-rollup protocol. In this article, we will delve into the evolution of Taiko's prover models to explore the design considerations and the key concepts behind. Taiko’s design priorities: Taiko is an Ethereum-equivalent zk-rollup that emulates Ethereum, natively supports all EVM opcodes and follows a type-1 zkEVM architecture. As a based-rollup in which the sequencing is performed by the L1 validator set, Taiko prioritizes utmost Ethereum-equivalence over the speed of proof generation. Besides Taiko has been focusing on decentralization from day 1, thus fostering censorship-resistance and strengthening the network's resilience, and promoting permissionsless entry for newly joining provers.

Project description and final update Research project on decentralized prover mechanisms of zk-rollups Ethereum Protocol Fellowship (July - November 2023) Project proposal Our mentor: Barnabé Monnot, Research Scientist at the Robust Incentives Group of the Ethereum Foundation Our team: Nilu, Rachit and myself. Motivation

[Proposal] Prover model for Aztec's RFP (Randomness, Staking and Reputation) - draft/v1 UPDATE!!! The final version of our team's proposal has been published here: https://forum.aztec.network/t/proposal-decentralized-prover-network-staking-reputations-and-proof-races/2489/1 Authors: Norbert, Nilu, Rachit Summary: The proposed prover selection and incentive model is a staking-based, in-protocol mechanism in which provers are selected through a VRF from a pool of N provers with the highest reputation score. We are proposing an enshrined prover network with the ability of provers pools to join. The model promotes permissionless entry, liveness and a certain level of competition (through reputation scores and a secondary "backup prover" mechanism), honest behavior (through staking and slashing), and fair and inclusive prover selection (through randomness). Decentralization:

30 Oct - 12 Nov 2023 As mentioned in my last update, the Aztec team has released a Request for Proposal for a decentralized prover coordination, and we've decided to submit our own proposal. Based on all the research our team has done in the past months I have prepared an initial version of the proposal for Aztec which served as the basis. The submission deadline was 3 November, thus during the week of 30 October our team focused on finalizing concepts, simplifying the prover design, adding additional features, preparing comparisons with other proposals, as well as addressing the questions and key considerations the Aztec team pointed out in their RFP. In summary our decentralized prover strategy is based on

Hyper Oracle: scaling Ethereum via zkDApps Introduction The scaling of Ethereum has been a hot topic for years. While most discussions have been revolving around L2 protocols that are capable of significantly increasing the Ethereum's throughput while providing low-fee transactions, there is another approach capable of scaling Ethereum in a different but equally important way. Hyper Oracle has been building along the latter path boosting the capabilities of smart contracts built on top of Ethereum, opening up whole new perspectives in creating trustless, decentralized and fully on-chain applications. In practise it means you can add zk-proven data-indexing, automated workflows or machine-learning capabilities to your smart contract. In this article we'll dive deeper into Hyper Oracle's architecture, workflows and use cases. A Programmable zkOracle Protocol What exactly does it mean? Hyper Oracle is a stateless protocol consisting of a network of nodes called zkOracles that are programmable and can handle customized, arbitrary computations. A zkOracle can provide zk-proven on-chain data from Ethereum as input for the customized computation while ensuring that the output is also verified through a zero-knowledge proof. The former is achieved by proving Ethereum's state through zkPoS, while the processing of data along a customized logic is achieved using programmable zkGraphs that run on zkWASM.

Taiko - research notes for the EPF project Website: http://taiko.xyz Docs: https://taiko.xyz/docs Roadmap: Current state of Taiko’s development: Alpha-5 testnet, Jolnir, went live on 19 September 2023. Please see the announcement here. Alpha-5 testnet features a new PBS-inspired proposing and proving design.

16-29 October 2023 As the EPF 4th cohort is coming closer to the end, our team is making a final push to deliver the outputs envisaged. Nilu has been focusing more on the simulation, transforming mathematical equations to Python code, and so was Rachit, helping her. We also had a great meeting with Barnabé, and discussed the current state of the simulation and the next steps. We discovered that the Aztec team has released a Request for Proposal for a decentralized proving mechanism. Since our project has been focusing on prover models, we decided that we'd submit our own proposal as part of the EPF project. In the past two weeks I was focusing more on compiling materials for our project output, drafting certain sections of the paper. Based on our team's previous discussions and research findings in the past three months I also prepared the draft proposal for Aztec, considering the criteria and parameters outlined in the RFP. This includes comparisons with the other four proposals that have been submitted so far. I was away for a couple of days from 25th and just got back today (29th), and noticed that two other proposals have been submitted in the meantime. I will review them today and add the necessary comparisons with them to our proposal as well.

9-15 Oct 2023 This week I have continued to work on the key criteria and the related optimization problems for the prover design. As agreed the previous week all of us have created our individual prover designs and a selection of criteria for modelling. I have further fine-tuned the details and assumptions of my design. We had a great brainstorming session with Nilu and Rachit, where we presented our models and discussed the underlying rationale. We are further aligning our models and the criteria to use in the agent-based modelling. I have incorporated some take-aways in my model already. Besides I have also started compiling a detailed description of our prover design. This could be part of our project output. We have met Barnabé, our mentor, Thursday morning, presented our progress on the above, and had a great discussion on what to focus on when building the model in Python. Barnabé provided us with a great material related to the mathematical model and functions for certain core criteria, such as liveness, cost, decentralization. Now our key focus is on the actual Python code for the modelling. We are starting off with a simple model, and iterating gradually as we go. Nilu and Rachit have been working on this in the past days already. I am much less experienced in coding then they are so this will be a great opportunity for me to learn and practise. We will be working on the model in the coming weeks.

My prover design with assumptions and selected criteria for the agent-based modelling: (Reference: Please see all the quantified criteria and related metrics in this document our team created earlier.) Assumptions: Permissionless entry: no special permissions or approvals required by any central party for an eligible prover to join. Criteria for prover eligibility:Stake: staking applied to increase security and to create economic interest for honest behavior. Minimum threshold applied to lower the entry barrier and maximum limit applied to control the dominance of large players (taking ETH as an example these could be 8/16 and 32 ETH or similar) Availability of minimum computing power Transparency and fairness:

2-8 Oct 2023 This week we continued to focus on quantifying the key criteria and come up with metrics for an optimal prover mechanism. We are defining them as optimization problems, including objective functions and related constraints. I mainly worked on transparency and fairness, security and Sybil resistance during the week (further details below). On Thursday we had a meeting with Barnabé, our mentor from the Ethereum Foundation's RIG. As per his guidance all three of us in our team are creating their own optimal prover designs and selecting key criteria for measurement and modelling, and in the coming week we are meeting to come up with a unified set of parameters and criteria to simulate in our research project. Here are my working notes on what I think could be an optimal design/model for our project to simulate. Also, we agreed that we'll meet weekly for the rest of the EPF.

25 Sep - 1 Oct 2023 This week our team's focus has been on quantifying key criteria of an optimal prover mechanism, approaching them as optimization problems and defining metrics that could be used in our simulation. Our team had multiple brainstorming sessions and we have split the work so that we can work on the criteria and the metrics parallel. While we discussed multiple criteria, I have mainly worked on censorship resistance, permissionless entry and transparency and fairness during the week. Here are our common research notes on the Prover Optimization: LINK Nilu suggested some lessons from MIT on optimization problems which I have watched and took notes of: https://youtu.be/C1lhuz6pZC0?si=jfOcB_moo7PMAGIP Also, we have spent some time getting familiar with cadCAD: https://www.cadcad.education/start

4-10 Sep 2023 This week I have continued to dive deep into existing architectures and prover models. Our mentor, Barnabé (from RIG) replied to our email. We'll have a call with him on the coming Tuesday, 12 Sep 2023. We had a team meeting with Nilu and Rachit, discussing how to prioritize next steps and prepare for our meeting with Barnabé. We are focusing on:Studying cryptoeconomics and rollup economics.As part of this, I have prepared detailed notes on:Rollups are Real — Rollup Economics 2.0 Zk-proof pricing – recording from zk-Summit Re-studying the Rollup economics framework of the Robust Incentives Group

18-24 Sep 2023 This week we have finished up the literature review and made progress in preparing for the agent-based simulation. We had a call with our project team, Nilu and Rachit to discuss next steps. On one hand I focused on the analysis of prover selection models with regards to key criteria. It is not yet completed but managed to make significant progress in mapping dependencies and inefficiencies of the different selection methods. The draft analysis can be found under this link. I have also continued working on a comparison table for prover selection models including visualization. The evaluation still needs to be fine-tuned but I expect this to help us exploring how an optimal model would like and also discover interdependencies between criteria.

Prover selection method analysis: Question to think about: How does a prover selection model/prover environment affect: decentralization? liveness? permissionless entry? efficiency and competition? availability of a valid proof prover rewards/profitability?

11-17 Sep 2023 At the beginning of this week we met with Nilu and Rachit to discuss our progress and prepare for our meeting with our mentor, Barnabé on Tuesday. We had a great discussion with him. We gave a presentation about our progress made so far, and then extensively discussed about the upcoming steps, modelling and simulation related to prover selection and rewards. Created also extensive notes We received great feedback and inputs from Barnabé, and discussed the practical aspects of an agent-based modelling that we are conducting. We have also agreed in meeting every two weeks for the remaining period of the EPF (can be even more frequent if needed). Since our meeting I have been reading blockchain-related research papers using agent-based modelling to get more familiar with its practical application. Research writings:

Scroll - research notes for the EPF project Website: https://scroll.io Docs: https://docs.scroll.io/en/home/ Roadmap: Launched their beta testnet on Sepolia mid-August 2023. Scroll’s architecture summary: https://scroll.io/blog/architecture

Linea - research notes for the EPF Website: https://linea.build Docs: https://docs.linea.build Linea Mainnet Alpha is live. Decentralization roadmap: Source: https://docs.linea.build/decentralization-roadmap

21 Aug - 3 Sept 2023 In the past two weeks I have been working on our project from different angles: I spent quite some time working on the project presentation along with my teammates, Nilu and Rachit. We presented our project proposal last Tuesday, 29 Aug 2023 in the EPF Office Hours. We have also extended our project's scope to prover selection. The selection process is an integral part of prover models, impacts network health and needs further analysis to allow us to find an optimal prover model. The project proposal has been updated accordingly. We have also updated our mentor, Barnabé on the current status of our project and requested feedback. I finalized my research notes on Taiko and Scroll. They can be found here:Taiko: https://hackmd.io/@norbertvadas/Sy3yEdmp3 Scroll: https://hackmd.io/@norbertvadas/Bk8bBaja3 A new set of amazing documents have been published by the Scroll team after the Scroll-Sepolia testnet go-live. Thus I spent a lot of time to dive deep into the docs to capture the latest state of the protocol development.