AVS with Fraud Proofs excels at minimizing operational overhead and initial capital requirements for validators. This model, pioneered by Optimism and Arbitrum, operates on an optimistic assumption of honesty, only requiring cryptographic proof generation when a challenge is raised. For example, Arbitrum Nitro's fraud proofs have enabled over $16B in TVL with a seven-day dispute window, allowing for high-throughput, low-cost transactions while keeping validator staking costs manageable.
LABS
Comparisons
AVS with Fraud Proofs vs AVS with Validity Proofs: Dispute Resolution
A technical comparison of optimistic and ZK-based security models for Actively Validated Services (AVS), analyzing trust assumptions, finality latency, operational cost, and suitability for different blockchain applications.
Chainscore © 2026
introduction
THE ANALYSIS
Introduction: The Core Security Dilemma for AVS
Choosing a dispute resolution mechanism for your Actively Validated Service (AVS) is a foundational security decision that dictates your protocol's trust assumptions and economic model.
AVS with Validity Proofs takes a different approach by requiring cryptographic proof (like a zk-SNARK or zk-STARK) for every state transition. This strategy, used by zkSync Era and StarkNet, provides near-instant finality and the strongest cryptographic security, eliminating the need for a challenge period. This results in a trade-off: significantly higher computational overhead for provers and more complex engineering, but a trust model that is secure even against a supermajority of malicious validators.
The key trade-off: If your priority is developer familiarity, lower gas costs for users, and a simpler validator set, choose a Fraud Proof system. If you prioritize maximum security guarantees, instant finality for cross-chain bridges, and censorship resistance, a Validity Proof system is the superior choice. Your decision fundamentally shapes your AVS's threat model and time-to-finality.
tldr-summary
AVS with Fraud Proofs vs AVS with Validity Proofs
TL;DR: Key Differentiators at a Glance
A side-by-side comparison of the core dispute resolution mechanisms, highlighting their fundamental trade-offs in security, cost, and performance.
01
Fraud Proofs: Lower On-Chain Cost
Optimistic assumption: Only posts a minimal state root to L1, with disputes as a rare exception. This keeps baseline costs low (e.g., ~$0.10 per tx vs $1+ for validity proofs). This matters for high-throughput, cost-sensitive applications like DEX aggregators or gaming rollups (e.g., early Optimism).
02
Fraud Proofs: Simpler Client & Prover Complexity
No heavy cryptography: The fraud proof logic is typically a re-execution of disputed transactions in an EVM-equivalent environment (e.g., Cannon). This matters for teams prioritizing faster development cycles and avoiding the steep learning curve of zk-SNARK/STARK toolchains (e.g., Cairo, Halo2).
03
Validity Proofs: Instant Finality & No Withdrawal Delays
Cryptographic guarantee: A zk-proof posted to L1 (e.g., using PLONK or STARKs) is instantly verifiable, providing L1-level security without a challenge window. This matters for bridges, exchanges, and protocols that cannot tolerate 7-day withdrawal delays (e.g., zkSync Era, Starknet).
04
Validity Proofs: Stronger Security & Censorship Resistance
No liveness assumption: Security does not rely on a watchtower network to be online and funded to submit fraud proofs. A single honest prover can secure the chain. This matters for maximally decentralized and secure value layers where 51% attacks on the prover set are a concern.
05
Fraud Proofs: The Challenge Period Risk
Vulnerability window: Assets are locked for the duration of the challenge period (often 7 days). This creates capital inefficiency and UX friction. This is a critical trade-off for DeFi protocols and users requiring fast asset portability across chains.
06
Validity Proofs: High Proving Cost & Hardware
Computationally intensive: Generating zk-proofs requires specialized, expensive hardware (GPUs/ASICs) and significant proving time, increasing operational costs. This matters for budget-conscious projects where the proving overhead per transaction is a primary economic constraint.
AVS DISPUTE RESOLUTION MECHANISMS
Feature Comparison: Fraud Proofs vs Validity Proofs
Direct comparison of key operational and security metrics for fraud-proof and validity-proof based dispute resolution in Actively Validated Services (AVS).
| Metric | Fraud Proofs (Optimistic) | Validity Proofs (ZK) |
|---|---|---|
Inherent Security Guarantee | ||
Dispute/Challenge Window | ~7 days | ~0 days |
Time to Finality (with dispute) | ~7 days | < 20 min |
On-Chain Verification Cost | $50-500 | $0.50-5 |
Prover Hardware Requirement | Consumer-grade | High-end (GPU/ASIC) |
Native Privacy Support | ||
Primary Use Case | General-purpose scaling | High-value, private dApps |
pros-cons-a
AVS with Fraud Proofs vs AVS with Validity Proofs: Dispute Resolution
Fraud Proofs (Optimistic Model): Pros and Cons
Key architectural trade-offs between optimistic and validity-based security models for Actively Validated Services (AVS).
01
Optimistic AVS: Key Strength
Lower computational overhead: State transitions are assumed valid, requiring proof generation only during a dispute. This enables higher throughput and lower base-layer costs for protocols like Arbitrum One and Optimism. This matters for high-volume, cost-sensitive applications like DEX aggregators (e.g., 1inch) and gaming.
02
Optimistic AVS: Key Trade-off
Long withdrawal delays (challenge period): Users must wait 7 days (Arbitrum) for funds to bridge to L1, creating capital inefficiency. This matters for arbitrage bots, high-frequency traders, or any protocol requiring fast finality for cross-chain composability with Ethereum Mainnet.
03
Validity Proof AVS: Key Strength
Instant cryptographic finality: Every state transition is verified by a ZK-SNARK or ZK-STARK proof (e.g., zkSync Era, Starknet). This enables trustless, near-instant withdrawals and is critical for real-time settlement in DeFi protocols like dYdX (v3) and secure cross-chain bridges.
04
Validity Proof AVS: Key Trade-off
High proving complexity and cost: Generating ZK proofs requires specialized hardware (GPUs/ASICs) and advanced cryptography, increasing operational costs and creating centralization risks for provers. This matters for AVS operators evaluating infrastructure budgets and long-term decentralization.
pros-cons-b
AVS with Fraud Proofs vs AVS with Validity Proofs: Dispute Resolution
Validity Proofs (ZK Model): Pros and Cons
Key architectural trade-offs for securing off-chain computations, focusing on finality, cost, and complexity.
01
Finality & Security
Validity Proofs provide instant, cryptographic finality. A ZK-SNARK proof (e.g., using Plonk or Groth16) mathematically guarantees state correctness upon submission, eliminating the need for a dispute window. This is critical for high-value DeFi protocols like Aave or Uniswap V4 that require immediate, non-reversible settlement.
02
Operational Cost & Complexity
Fraud Proofs offer lower operational overhead for simple state transitions. Systems like Arbitrum Nitro or Optimism Bedrock only require expensive computation (proving) when a challenge is issued, keeping typical costs low. This is optimal for general-purpose rollups where most transactions are non-controversial and the cost of continuous ZK proving (e.g., with a zkEVM like Polygon zkEVM) is prohibitive.
03
Trust Assumptions & Decentralization
Fraud Proofs inherit stronger decentralization at the prover level. They only require one honest actor to be watching and able to submit a challenge, aligning with Ethereum's permissionless validator model. Validity Proof systems rely on the security of a smaller, often more centralized set of provers (e.g., a specific prover network) and the soundness of the cryptographic setup.
04
Proving Cost & Hardware
Validity Proofs incur high, predictable proving costs. Generating ZK proofs (using frameworks like Halo2 or StarkWare's Cairo) requires specialized, expensive hardware (GPUs/ASICs) and significant computational time, creating a high barrier to entry for prover decentralization. This trade-off is acceptable for applications like privacy-focused chains (Aztec) or high-throughput settlement layers where the cost is amortized.
CHOOSE YOUR PRIORITY
Decision Framework: When to Choose Which Model
AVS with Fraud Proofs for DeFi
Verdict: Best for established, high-value protocols where cost predictability is paramount. Strengths:
- Cost-Effective at Scale: Fraud proofs (e.g., Optimistic Rollups like Arbitrum, Optimism) have lower baseline compute costs, making them ideal for high-volume, complex DeFi operations like perpetual swaps or money markets.
- EVM-Equivalence: Superior developer experience with near-perfect compatibility for existing Solidity tooling (Hardhat, Foundry) and contracts (Uniswap V3, Aave).
- Proven Security Model: The 7-day challenge period, while a UX trade-off, provides a robust, battle-tested economic security guarantee for billions in TVL. Key Trade-off: Users and integrators must consider the week-long withdrawal delay or rely on third-party liquidity bridges.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
Choosing the right dispute resolution mechanism for your AVS is a foundational decision that impacts security, cost, and scalability.
AVS with Fraud Proofs excels at minimizing operational overhead and gas costs for optimistic rollup-like systems. This is because the system assumes validity by default, only running expensive computation during a dispute. For example, Optimism and Arbitrum leverage this model to achieve high throughput with finality times of around 7 days, while keeping transaction fees extremely low for end-users. The security model relies on the economic incentive of at least one honest watcher to submit a fraud proof.
AVS with Validity Proofs takes a different approach by providing cryptographic, on-chain verification for every state transition via zk-SNARKs or zk-STARKs. This results in near-instant finality and stronger cryptographic security guarantees, eliminating the need for a lengthy challenge window. The trade-off is higher proving costs and computational complexity for the operator, as seen with zkSync Era and Starknet, which can lead to higher fees during periods of peak demand or for complex transactions.
The key trade-off is between cost/complexity and finality/security. If your priority is minimizing user transaction fees and simplifying operator infrastructure for applications where a 7-day finality delay is acceptable (e.g., gaming, social), choose an AVS with Fraud Proofs. If you prioritize instant, cryptographically guaranteed finality and maximal security for high-value DeFi protocols or exchanges where capital efficiency is paramount, choose an AVS with Validity Proofs.
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