cLabs Proposal for Celo to transition to an Ethereum L2

Protocol
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Thanks to restakinglover for the question that lets us address the underlying trust model of EigenDA.

There are three distinct ways to analyze the security of blockchain systems:

  1. Byzantine fault tolerance: Assume some fraction are honest (and follow the protocol exactly) and some are malicious (and can deviate arbitrarily).
  2. Equilibrium model: Analyzes the economic incentives of each node assuming there are enough distinct parties.
  3. Pure cryptoeconomic model: Assumes all stake is held by the same node and models the cost of economic corruption.

EigenDA is built on ETH restaking via EigenLayer and uses erasure codes with a configurable coding ratio which can be set by the rollup.

  1. BFT model: EigenDA is safe as long as >x fraction of nodes are honest (x can be 10% to 50% depending on coding rate), i.e., data can be retrieved.
  2. Equilibrium model: As long as collusion size is smaller than (1-x), storing and serving data is a Nash equilibrium.
    2a. Storing being NE is ensured by proof-of-custody which slashes ETH of nodes that do not store the data
    2b. Serving being NE is ensured because data is dispersed across various nodes, inducing a competitive market to serve
  3. Cryptoeconomic model: As long as the data is available (or equivalently, as long as >x fraction is honest), the ETH staked by any node that doesnt custody data will be slashed
    3a. EigenDA does not have unconditional cryptoeconomic safety, which is that if all nodes withhold data, then ETH will not be slashed, as proof of custody requires someone to trigger it and that party needs to know the data.

EigenDA builds on two distinct models of trust: non-collusion which comes from decentralization and economic trust which comes from (re)staking. The core idea is that EigenDA can borrow both decentralization and economic trust from Ethereum.

Further safety comes from CELO staking: the proposed architecture uses CELO stakers as part of decentralized sequencing and fast confirmation: hence there is additional redundancy in data availability. Thus the results above can be strengthened as follows:

  1. BFT model: EigenDA is safe as long as >x fraction of EigenDA nodes are honest (x can be 10% to 50% depending on coding rate) OR majority of CELO stakers honest.

  2. Equilibrium model: As long as EigenDA collusion size is smaller than (1-x) OR CELO collusion is sub-majority, storing and serving data is a Nash equilibrium.

  3. Cryptoeconomic model: As long as the data is available (or equivalently, as long as >x fraction of EigenDA is honest OR majority CELO stakers honest), the ETH staked by any node that doesnt custody data will be slashed
    3a. In addition, whenever DA safety fails, CELO stakers can be unconditionally slashed (by forking the CELO chain).

Overall this system improves the DA safety significantly via integrating decentralization and economics of two distinct communities. Reiterating, CELO+EigenDA builds on two distinct models of trust: non-collusion which comes from decentralization of CELO stakers and EigenLayer restakers and economic trust which comes from EigenLayer restaking and CELO staking.

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