Fraud Proof

The phrase “fraud proofs” refers to a technological approach in the realm of blockchain that is essential for allowing on-chain scalability of blockchains (for instance, by sharding or bigger blocks) while assuring that on-chain data is accessible and accurate. Optimistic Rollups (ORs), which are used by fraud proofs, have the dual purpose of cutting costs and lowering latency for decentralized applications on a blockchain network.

A sequencer needed to process ORs must include a fraud-proof with their work in order to be rewarded for a good job. Sequencers receive financial rewards for carrying out rollups in accordance with the consensus norms, and they suffer financial penalties by losing their fraud evidence when they do so.