How Do “Fraud Proofs” Work and What Are Their Limitations?

Fraud proofs are a security mechanism that allows network participants to challenge and prove the invalidity of a block. If a validator submits an invalid block, any other participant can submit a fraud proof to the network, which contains evidence of the invalidity.

If the fraud proof is valid, the invalid block is rejected and the validator who submitted it is punished. The main limitation of fraud proofs is that they rely on the assumption that there will always be at least one honest participant who is willing to submit a fraud proof.

If all participants are malicious or apathetic, an invalid block could be accepted by the network.