Stage 1 Fraud Proofs Go Live: The Quiet Revolution That Makes Ethereum L2s Actually Trustless

For years, critics had a point: Ethereum's Layer 2 networks weren't really trustless. Sure, they promised fraud proofs—mechanisms that let anyone challenge invalid transactions—but those proofs were either non-existent or restricted to whitelisted validators. In practice, users trusted operators, not code.

That era ended in 2024-2025. Arbitrum, Optimism, and Base have all deployed permissionless fraud proof systems, achieving what L2Beat classifies as "Stage 1" decentralization. For the first time, the security model these rollups advertised actually exists. Here's why this matters, how it works, and what it means for the $50+ billion locked in Ethereum L2s.

The Stages Framework: From Marketing to Reality

Before we dive into the technical achievements, we need to understand how rollup security is actually measured. The Stages Framework, introduced by L2Beat in June 2023 (based on Vitalik Buterin's 2022 proposal), provides clear criteria for evaluating rollup maturity.

The intuition is simple:

• Stage 0: Project fully controlled by operators with "advisory-only" proof systems
• Stage 1: Smart contracts govern the rollup, but a Security Council can intervene for bugs
• Stage 2: Code controls everything—Security Council powers limited to provable on-chain bugs

For years, nearly every major rollup sat at Stage 0. Their fraud proof systems either didn't exist, weren't active, or were restricted to hand-picked validators. The "trustless" promises in marketing materials didn't match reality.

That changed dramatically.

Arbitrum's BoLD: Permissionless Validation Arrives

In February 2025, Arbitrum deployed BoLD (Bounded Liquidity Delay), a new dispute protocol that fundamentally transformed how the network handles fraud proofs.

What BoLD Actually Does

According to Arbitrum documentation, BoLD enables anyone to participate in validating the chain state—including submitting and winning challenges—without needing permission from Offchain Labs or anyone else.

The key innovations:

• Permissionless validation: Any node operator can submit fraud proofs to challenge invalid state roots
• Bounded dispute resolution: Fixed 7-day upper limit for resolving disputes, preventing delay attacks
• Economic security: Challengers stake assets to participate, creating skin-in-the-game incentives

Previously, Arbitrum's fraud proof system was permissioned—only a select group of whitelisted validators could initiate challenges. This meant users trusted that:

1. These validators were watching for fraud
2. They would actually challenge invalid states
3. Arbitrum wouldn't collude with them

BoLD eliminates these trust assumptions. Anyone running a validator node can now protect the network.

Deployment Status

BoLD is now active on Arbitrum One, Arbitrum Nova, and Arbitrum Sepolia. The governance proposal passed in early January 2025, and deployment followed within weeks.

As Ethereum's official account noted: "BoLD introduces permissionless validation, which means that any node operator can submit a fraud proof to challenge the state of the chain. This is a huge decentralization unlock that heightens the security of Arbitrum One."

Optimism's Fault Proofs: A Bumpy Road to Stage 1

Optimism's path to permissionless fault proofs was rockier—but ultimately successful.

June 2024: The Initial Launch

On June 10, 2024, fault proofs went live on OP Mainnet, marking a historic milestone for the OP Stack. As Optimism announced:

"Governance-approved, permissionless fault proofs are live on OP Mainnet, and with them the OP Stack arrives at Stage 1 decentralization."

The system enables withdrawals of ETH and ERC-20 tokens from OP Mainnet without trusted third parties. Invalid withdrawals can be challenged by any user willing to participate.

August 2024: The Security Setback

Two months later, the Optimism Foundation temporarily disabled permissionless fraud proofs after community-driven audits discovered vulnerabilities. The system reverted to permissioned operation while OP Labs developed the "Granite" hard fork.

This wasn't a failure—it was the security council doing exactly what it should do at Stage 1: catching issues before they cause harm. The September 2024 Granite upgrade addressed the vulnerabilities, and permissionless fault proofs returned.

The Current System

Today's OP Stack fault proof system works as follows:

1. Proposals: Anyone can propose output roots claiming the L2 state
2. Challenge period: 7-day window for challenges
3. Disputes: If challenged, an interactive proving game determines truth
4. Resolution: Valid proposals become finalized; invalid ones are rejected

The Security Council retains power to intervene in emergencies—consistent with Stage 1 requirements. As Optimism explains, "having this fallback is part of a responsible and safe rollout of the Fault Proof System."

Base Joins the Stage 1 Club

In October 2024, Base launched fault proofs on mainnet, making Coinbase's L2 the latest major rollup to achieve Stage 1 decentralization.

The Base announcement emphasized what this means for users:

"Base has achieved Stage 1 Decentralization, a critical milestone in our journey to build an open and global onchain economy. We've done this by launching permissionless fault proofs and increasing the decentralization of our contract upgrade process with a security council."

Because Base uses the OP Stack, it benefits from the same fault proof system developed by Optimism. This demonstrates the power of shared infrastructure—security improvements propagate across the entire Superchain ecosystem.

Why Stage 1 Matters: The Trust Calculus

To understand why Stage 1 is significant, consider what users actually trust at each stage.

Stage 0 Trust Assumptions

At Stage 0, users trust that:

• Operators won't steal funds
• Operators won't censor transactions indefinitely
• The team won't maliciously upgrade contracts
• Whitelisted validators are honest and vigilant

Stage 1 Trust Assumptions

At Stage 1, users trust that:

• At least one honest actor will challenge fraud (permissionless, so anyone can)
• The Security Council won't collude to steal (requires 75%+ majority of 8+ diverse members)
• Users have 7+ days to exit before malicious upgrades take effect

The difference is dramatic. Stage 0 requires trusting specific known entities. Stage 1 only requires that the Security Council doesn't actively collude—a much weaker assumption given diverse membership requirements.

As L2Beat's framework explains: "A properly set up Security Council consists of at least 8 members with a threshold greater than 75%. What 'sufficiently decentralized' means is fundamentally subjective and L2BEAT evaluates each case individually."

The Path to Stage 2: No Training Wheels

Stage 1 is a major milestone, but it's not the finish line. Stage 2 represents true trustlessness:

• Security Council can only act on provable on-chain bugs
• 30-day minimum exit window for upgrades (vs. 7 days at Stage 1)
• Fully permissionless fraud proofs (already achieved)
• Multiple redundant proof systems

Multi-Proof Architecture

The key to Stage 2 is redundancy. Optimism is working toward what they call "multi-proof nirvana"—running multiple proof systems simultaneously:

• Cannon: The current optimistic fraud proof system
• Asterisc: Alternative fraud proof implementation
• Kona: Another independent implementation
• ZK proofs: Zero-knowledge validity proofs alongside optimistic proofs

When multiple independent systems agree, confidence in the result increases dramatically. If they disagree, the Security Council can adjudicate—a legitimate role rather than arbitrary power.

Vitalik's Stage 2 Vision

In his May 2025 post "The math of when stage 1 and stage 2 make sense," Vitalik Buterin argued that Stage 2 should be the standard for mature rollups:

"Starting in 2025, I will only publicly support projects that meet the higher security standards (classified as Stage 1 or higher)."

This created real pressure. Rollups that don't progress risk losing credibility and ecosystem support.

The Competitive Landscape

According to The Block's 2026 L2 Outlook:

"Arbitrum, OP Mainnet, and Base all have live, permissionless fraud proof systems and are now classified as Stage 1. However, many smaller optimistic rollups still do not have working fraud proofs."

This creates a two-tier market:

Stage 1 Leaders

Rollup	Fraud Proof System	Status
Arbitrum One	BoLD	Live (Feb 2025)
Arbitrum Nova	BoLD	Live (Feb 2025)
OP Mainnet	Cannon	Live (June 2024)
Base	Cannon (OP Stack)	Live (Oct 2024)

Stage 0 (or Lower)

Many smaller rollups remain at Stage 0 or lack fraud proofs entirely. L2Beat's 2025 framework update moved projects without proper proof systems to an "Others" category—essentially delisting them as true rollups.

What This Means for Users

For the average user, Stage 1 fraud proofs provide concrete protections:

Withdrawal Security

You can withdraw funds to Ethereum without trusting anyone. If the rollup operator posts an invalid state root claiming your funds don't exist, you (or anyone) can challenge it.

Exit Rights

If the rollup team proposes a malicious upgrade, you have at least 7 days to exit to Ethereum. This isn't theoretical—it's enforced by smart contracts.

Censorship Resistance

Even if the sequencer censors your transactions, you can force-include them through L1. Combined with fraud proofs, this means the rollup can't steal your funds through censorship.

Reduced Trust Surface

Instead of trusting "the Arbitrum team" or "Coinbase," you trust that:

1. At least one honest validator exists globally
2. A supermajority of a diverse Security Council won't collude

The Road Ahead

Stage 1 is live. The remaining work focuses on:

2025-2026 Priorities

• Arbitrum: Working toward Stage 2 with extended timelocks and multi-proof systems
• Optimism: Deploying Asterisc and Kona for multi-proof redundancy
• Base: Following OP Stack upgrades toward Stage 2
• ZK Rollups: Starknet, zkSync, and others working toward Stage 1+ with validity proofs

The Stage 2 Timeline

Most estimates suggest major rollups will reach Stage 2 by late 2026 or 2027. The technical work is largely complete—the remaining challenges are governance, testing, and building confidence in multi-proof systems.

Why This Actually Matters

Permissionless fraud proofs sound abstract, but they represent a fundamental shift in how billions of dollars are secured.

Before Stage 1, critics could accurately claim that L2s were "just multisigs with extra steps." The security model depended on trusting specific entities—exactly what crypto was supposed to eliminate.

With Stage 1 achieved, the largest rollups now provide genuine trustless security guarantees. Users can verify the chain, challenge fraud, and exit without permission. The "secured by Ethereum" claim finally has technical substance.

The $50+ billion locked in Ethereum L2s is now protected by code, not promises.

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