How Do “Fraud Proofs” Work in Optimistic Rollups?

Fraud Proofs are a mechanism used by Optimistic Rollups to ensure correct execution. When a batch of transactions is posted to Layer 1, it is assumed valid.

A challenge window is provided where anyone can submit a "fraud proof" if they detect an incorrect state transition. If the proof is successful, the incorrect batch is reverted, and the malicious operator is penalized.