How Do Verifiers Ensure the Proof Applies to the Correct Financial Context?
The proof is tied to the correct financial context by including a hash of the relevant context data within the statement being proved. This context data could include the smart contract address, the asset IDs, the expiry date of an option, or the current state root.
The verifier checks that this context hash is correctly incorporated and matches the current on-chain state.
Glossar
Verifier
Attestation ⎊ Verifiers, within cryptocurrency networks and derivative markets, function as critical nodes responsible for confirming the validity of transactions and state changes, ensuring data integrity and preventing double-spending or fraudulent activity; their operation is fundamental to maintaining trustless systems, particularly in Proof-of-Stake consensus mechanisms where selection is often weighted by stake size and performance metrics.
Expiry Date
Determinant ⎊ The Expiry Date serves as the definitive temporal determinant for a derivative contract's life cycle, marking the moment when the option holder's right to exercise either terminates or is automatically executed.
Underlying Asset Price
Valuation ⎊ The underlying asset price in cryptocurrency derivatives represents the current market consensus of an asset’s worth, serving as the foundational input for pricing options and futures contracts.
Zkp
Cryptography ⎊ This denotes the advanced mathematical techniques, primarily based on elliptic curves and polynomial commitments, that allow for the creation of succinct, non-interactive arguments about computation.
Financial Context
Environment ⎊ The financial context refers to the specific set of market conditions, regulatory frameworks, and macroeconomic factors influencing trading decisions and asset valuation.