# Plasma with client-side validation

[EDIT: later replies describe a simpler version of this idea without the Plasma elements]

[EDIT 2: Plasma Cash by Vitalik and Karl Floersch improves significantly on these ideas in the Plasma context.]

This post describes an adaptation of Minimal Viable Plasma (MVP) by @vbuterin et al (and assumes familiarity with that post). The adaptation makes use of some of Peter Todd’s ideas around single-use seals and client-side validation. Almost none of the ideas below are original to me (although the mistakes probably are).

This approach makes some serious tradeoffs relative to the blockchain structure described in MVP, but it could be a useful configuration for some minority of Plasma chains, particularly for its unique probabilistic “tumbling” capability. Mostly, I wanted to introduce these ideas of Peter’s (which I think deserve wider attention and could have interesting applications in other contexts, such as stateless validation in sharding) to the community, and try to sketch out a design for a working system that would demonstrate them.

### Abstract

Like Minimal Viable Plasma, client-side Plasma would use a UTXO-based blockchain operated by some owner or owners, whose block headers are committed to the Ethereum blockchain. The primary difference is in the structure of those blocks.

Instead of transactions including their inputs and outputs in cleartext, they only include a commitment to the outputs, and signatures from the inputs’ public keys. It is the user’s responsibility, when sending a transaction, to also provide the recipient with a recursive proof that the inputs are valid (such as by revealing all hidden information about the full chain of previous transactions, back to the deposit transactions).

There is an optimization that can be used to prune part of these proofs. In addition to making these proofs more efficient, this allows you to permanently hide part of a transaction’s history, thus letting users “tumble” funds to obscure their source.

#### Benefits

• Plasma transactions are even smaller
• Plasma blocks can be validated statelessly. This is particularly important because in Plasma, this is a responsibility of all parties maintaining UTXOs on the chain
• Transactions themselves reveal almost nothing about their sources, destinations, or amounts. Histories eventually need to be revealed, but can be probabilistically pruned before doing so, permanently hiding some history

#### Costs

• Exit transactions are larger (approximately O(N) in the average number of steps in the UTXO’s transaction history)
• Would-be challengers need to preserve O(N) storage, where N is the number of transaction inputs in the Plasma chain’s history
• Transacting parties need to maintain and exchange off-chain proofs of not-insignificant size (the exact size depends on the amount of state maintained by the receiving party)
• Dishonest users may be able to “gamble” on the chain, with negative expected value but with some risk of hurting depositors or other users

### Data structures and validity rules

#### Transactions

A transaction is a tuple: (destination, signatures)

The public keys—i.e., inputs—for the transaction can be derived from the signatures, with the destination as the message.

A transaction is valid and can be included in a block if:

• the signatures array is non-empty and valid public keys can be recovered from each of the signatures, or
• the signatures array is empty, indicating a deposit transaction, it is the only transaction in that block, and there exists a corresponding deposit transaction in the parent chain

A destination is the root of a Merkle sum tree of UTXOs (i.e., a Merkle tree where each intermediate node (and the root) also commits to the sum of the amounts of the UTXOs included in that branch).

A UTXO is a (salted) commitment to a tuple: sha3(publicKey, amount, salt).

#### Blocks

A block header is a tuple: (height, previousBlockHash, transactionRoot, publicKeyRoot).

A full block also includes a list of transactions. A block is valid if it contains only a single valid deposit transaction (see above), or if:

• The transactions are all valid
• The transactions are sorted in ascending order based on their derived public keys (for efficiency of computation of the publicKeyRoot)
• The derived public keys used in the block are unique within that block
• The transactionRoot is a Merkle root of the transactions
• The publicKeyRoot is a Merkle root of the derived public keys in the transactions in the block, sorted in ascending order

A proof of non-inclusion of a public key is a Merkle path to two adjacent public key, showing that there is no transaction spending from a particular public key in that block.

(There are likely ways to make these proofs smaller using different kinds of trees that commit to the frontiers of public keys rather than the keys themselves, and/or adding probabilistic data structures like Bloom filters to the headers, but we’ll leave those for follow-up posts.)

### Light proof of validity

A key distinction of this protocol from shared-validation protocols like Bitcoin and Ethereum (but which it shares with some proposals around separating consensus and state execution) is that the mere inclusion of a UTXO in the Plasma blockchain does not prove that the UTXO is valid. To spend a UTXO from the Plasma chain, you need to provide the recipient with an off-chain proof that the UTXO is valid as of the block in which it is spent. Similarly, to withdraw a UTXO from the Plasma chain, you need to prove to the Ethereum chain that the UTXO is valid as of the block in which it is withdrawn.

A light proof of validity of a UTXO as of block b at height h is:

• A proof that the UTXO is included as part of a valid Merkle sum tree path from destination.
• A transaction that includes that destination.
• The block height h′ of the block b′ in which transaction was included
• The index of transaction in that block.
• If transaction's publicKeys list is empty, indicating a deposit transaction, then the proof is complete. If not:
• A list of UTXOs, inputs, whose respective publicKeys match the publicKeys in transaction, and whose amounts sum to the total amount committed to by destination.
• A light proof of validity of each UTXO in inputs, as of block b′ at height h′.

A light proof only contains the non-public information needed to validate a transaction. It does not demonstrate everything needed to determine that a UTXO is valid. Specifically, for a UTXO to be valid, the following must also be true:

• transaction was included in the block at height h′ that is in the history of b, and
• there is no transaction included in a block between blocks b′ and b that spends publicKey.

Fortunately, these facts can be verified based on public information, so if a verifier is running (or trusts somebody who is running) an “archival node” for the Plasma chain, they can verify these facts.

### Fraud proofs

Additionally, if one of those facts is false, any archival node can detect it and construct a relatively efficient fraud proof to demonstrate that fact. This means that a light verifier can satisfy itself as to the validity of a light proof using an incentivized challenge-response protocol. This is how the parent chain verifies the validity of a UTXO for a withdrawal. During the withdrawal waiting period, any party can claim a portion of the withdrawer’s deposit by revealing a Merkle proof that either:

• a different transaction was included at position index in the block at h′ in b's history (or no transaction at all was included at that position), or
• there is a transaction spending publicKey in some block between b′ and b.

If the verifier has a list of all previous block hashes (as the Plasma contract on Ethereum does, for example), a fraud proof has size log(N), where N is the number of transactions or public keys, respectively, included in the block used in the fraud proof. If the verifier does not have such a list, the prover must also provide the chain of block headers from the block mentioned in the fraud proof to block b.

### Full proof of validity

In some cases, a verifier may not be running an archival node, and may not be able to take advantage of a challenge-response protocol. In that case, the prover has to provide some additional information.

A full proof of validity of a UTXO is a light proof of its validity, plus:

• The block header for b′, and a Merkle proof that transaction is included in its Merkle root.
• All of the block headers between b′ and b.
• For each of those block headers, a Merkle proof of non-inclusion of publicKey in the publicKeyRoot. Since the public keys in that tree are ordered, this can be done with a Merkle proof of adjacent public keys.

### Probabilistic proof of validity

This protocol gives us essentially the same functionality as minimum viable Plasma. It reduces transaction size, and makes block validation—i.e., the task that must be performed constantly by any participant on the Plasma network—efficient and memoryless.

However, while it delays the public revelation of transaction histories, those histories must eventually be revealed when a UTXO is withdrawn. Once every UTXO in a Plasma chain is withdrawn, every transaction in its history will have been revealed. Additionally, since transactions can have multiple inputs, the size and verification time of validity proofs (even light proofs) will tend to blow up quasi-exponentially, as you must provide every thread of a UTXO’s history.

However, there’s a trick that allows you to linearize this history, so the size of a light or full proof is only proportional to the length of the average history of the coins in that UTXO, rather than the total history. This will additionally allow us to permanently prune (and thus untraceably hide) a portion of each coin’s history.

To do so, we change the rule for validity of a UTXO, so that a UTXO is considered valid if one of its inputs, chosen randomly (and weighted by the amount of that input), is valid. For example, suppose a transaction has one output worth 4 ETH, and has two inputs, one of which is a valid source of 3 ETH and the other of which is a fraudulent source of 1 ETH. 75% of the time, the first one will be checked, and 25% of the time, the second one will be checked. The expected value of fraud will be \frac{3}{4} \cdot 4 + \frac{1}{4} \cdot 0 - 3 = 0. Indeed, the expected value of fraud should always be 0, which means that the total supply of coins in the contract will not tend to inflate.

To strengthen this guarantee, and to discourage users from treating the Plasma chain as a casino, you would likely want to tweak the probabilities so that the expected value of fraud is somewhat less than 50%. For example, you could have a rule that 10% of the time, every input must be checked, which would mean that an attacker would expect to lose 10% of their capital with each attack.

The random choice of which coin is checked must be deterministic but uncontrollable and unpredictable by the transaction’s creator. (Finding a secure randomness beacon is a difficult problem, but one with several plausible solutions.) At some point after a transaction is included in the Plasma chain, this random number would be finalized, and the holders of a UTXO would be able to prune all but one of the proofs from its history (although it would need to replace it with a proof of the result of the random beacon).

This technique allows you to shorten both full and light proofs of UTXO validity. It also turns the Plasma chain into a sort of trustless probabilistic tumbler. Given a large enough supply of “clean” coins, you would eventually be able to make any coin untraceable.

Unfortunately, this may still allow the attacker to grief the depositor and other coinholders on the Plasma chain. Computing the griefing factor is surprisingly difficult and depends on some surprising factors (happy to discuss more) but intuitively it seems like these attacks would tend to increase the contract’s overcapitalization—since the expected value for attackers is negative, so each successive griefing attack will be less and less likely to hurt the honest users of the Plasma chain.

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Thanks a lot for this, lots of cool ideas in here! That said, I’m not convinced that doing it this way doesn’t cancel out the source from where Plasma gets its efficiency gains in the first place. Plasma is a system that can handle M users each of which send N transactions with only 2M effort on the main chain, regardless of N, and to accomplish this it relies on exits having O(1) complexity. In this approach, each withdrawal transaction would need to contain a light proof of size N, so the total expense would be M * N, same as running all transactions on the main chain directly.

I agree that the probabilistic tumbling approach makes the concrete efficiency better, though it introduces other complexities, like there always being some risk that the plasma chain turns into a fractional reserve (or must implement a haircut) out of sheer bad luck, and even with linear history size (ie. if there was only one denomination of coin) my M * N argument seems to suggest it won’t be an improvement over everything being on chain.

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Hmm, that point does seem rather damning. To be fair I think it only loses the bandwidth efficiency? The parent chain still does not need to check any previous signatures in the normal case, and it still could use only as much storage and as many storage ops on the parent chain as MVP.

Also technically it should depend on the rate of growth of the UTXO set—I think if it grows slower than the rate of net deposits onto the chain (i.e., there’s a lot of merging going on), it will be significantly lower bandwidth than just doing those transactions on chain (because most of the histories will be pruned), whereas if it grows faster than the rate of net deposits into the chain (i.e. there’s a lot of splitting), then your histories will tend to be redundant and the total bandwidth needed for everyone to exit will be greater than if you had just done the trades on the parent chain. There are reasons you might expect that the former situation will tend to obtain (people are trying to minimize their history sizes) but maybe not at all times, and at any rate the efficiency gain seems unlikely to be dramatic. And in the Plasma context this does seem to fail in the worst way possible—a total exodus from the child chain would involve all of this history (without whatever optimizations coinholders would prefer to do) rushing onto the parent chain at once.

So this may not be worth it as a scaling solution. But it seems like it still works as a privacy solution. I think the problems with fractional reserve can be solved—a depositor can massively overcapitalize it, and perhaps there’s some safe way to let the depositor share in the leftover winnings from gamblers losing the die roll (which I was assuming would need to get orphaned in the contract). If there’s a good way to make that piece (as well as the randomness beacon) work, then perhaps this could exist simply as a trustless probabilistic tumbler, that just happens to share some of its structure with Plasma.

Agree that it only loses bandwidth efficiency; that said, you could also make a simpler bandwidth savings scheme, that I described as “shadow chains” a few years ago here: publish the block data to the chain, and only verify them on chain if someone complains within some time window. Thinking of it as a privacy scheme is interesting, though I imagine I could probably come up with some parametrization that shows that the privacy usecase of your scheme is basically a more complicated version of coinjoin.

That said, perhaps we should think much more seriously about cryptoeconomic tumblers, now that we’re clear that that’s the goal; with security deposits it could be possible to design one that’s quite powerful…

Ah yes, ACK on shadow chains.

I don’t think this reduces to CoinJoin? It’s non-interactive and asynchronous. The functionality is more like a ring signature mixer. But it clearly can be simplified, perhaps by just dropping the entire Plasma mechanism and storing everything on chain for now. (In which case I should change the post title and category…)

The contract would be initialized by a depositor, who would prefund it with some substantial amount. The contract would maintain a mapping of commitments (salted hashes of public keys) to balances (and commitment times).

Anyone can call deposit at time T1, specify a new commitment, and pay in X ETH to add <commitment>: (X, T1) to the mapping.

Some time later, someone can call initiateWithdrawal. They put down some deposit, specify a destination address, and specify a list of “inputs”. Each input includes a public key (which is purported to correspond to some committed public key in the mapping), an amount, and a signature from the public key on the rest of the data in the transaction (best way to do this to be determined). This is stored as a pending withdrawal (along with the time at which it was submitted, T2). The public keys used are added to a blacklist, meaning they can never be used in an input of a withdrawal again.

After some time, a randomness beacon resolves, and one of those inputs is chosen to be audited, with the selection weighted by the amounts in each input. The withdrawer can then call completeWithdrawal and reveal the salt for that input, showing that that public key was committed to in the mapping before time T2, and that its amount was greater than or equal to the amount asserted. The commitment can then be removed from the balances mapping.

If the audited input was in fact fraudulent, the depositor will not be able to reveal a commitment in the balances mapping that matches it, and will lose their deposit along with any balances in other inputs that were valid.

The fees and withdrawal deposits can be tweaked to discourage fraud and make it worthwhile for the initial depositor to fund the backstop, without hurting the level of anonymization enjoyed by honest parties.

There are some pretty obvious ways to make this more efficient (and it’s already not too bad; it improves significantly on both the bandwidth and computation requirements of ring signature mixers, though it seems to have the same unfortunate storage requirements). But I’d be curious if there’s a way to improve the anonymization, maybe by combining it with some other mechanism. The properties this provides (unlinkability of outputs, except to one randomly selected one of the inputs) are a bit too quirky for practical use as a tumbler.

You’re right that it’s not fully the same thing. The analogy I was making is that both seem to be privacy-enhancing techniques that run on the principle of “we let multiple actors participate, have someone perform a shuffling and then let the participants withdraw, not publishing the connection between inputs and outputs if everyone agrees the shuffler acted fairly”; in coinjoin that’s clearly how it works, and in your plasma construction the shuffling is done implicitly as the chain operator honestly confirms Merkle roots of users’ transactions to each other.

In your committed deposit scheme, I’m not sure how the scheme knows that your commitments to the public keys that don’t get audited (but still need to be blacklisted if they’re incorrect) are valid; it seems like there’s an attack where you can specify other users’ public keys, fail the completeWithdrawal step, and thereby blacklist other people’s money.

And ultimately, there’s still a trail from that can link outgoing money to at least one input of incoming money, so it doesn’t quite give full privacy preservation.

The signatures are always checked. You can’t specify other users’ public keys because you can’t forge their signatures. (Also because you don’t know them until the other party’s withdrawal transaction is published, but that obviously isn’t secure against front-running attacks.)

Yeah, like I said, a little too quirky.

Right, but then doesn’t that mean that every withdrawal is linked to all of its corresponding deposits?

Nope, because the balances mapping only includes salted commitments to the public keys. The linkage of an input’s public key to a commitment in the balances mapping is what gets checked (for a single input) during the audit. The unaudited public keys can’t ever be linked to any commitments in the balances mapping.