How Arbitrum and Optimism use Fraud Proofs to secure roll-up transactions

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Arbitrum and Optimism employ a Fraud Proof mechanism to ensure the integrity of off-chain transactions processed on their roll-up networks. When a transaction is proposed, it is initially executed optimistically without immediate verification. If a participant suspects fraud, they can submit a Fraud Proof to challenge it. An automated judge then verifies the proof, and if valid, cancels the fraudulent transaction and penalizes the faulty operator. This system maintains the speed of Layer-2 scaling while providing a security safeguard against malicious behavior.

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