There’s an oft-repeated mantra in blockchain ideology that “code is law” – the idea that a network’s underlying programming should be sacrosanct, providing the ultimate authority to settle disputes even when serious emergencies or existential threats arise.
Now, a top executive in the Ethereum blockchain ecosystem is explicitly embracing the idea that, in certain extreme scenarios, humans rather than hard-coding might be the superior arbiters of justice.
Alex Gluchowski, CEO of Matter Labs, the developer of a top layer 2 network on Ethereum, has floated the idea of an “Ethereum Supreme Court” to arbitrate disputes that escalate to the point of threatening the main blockchain’s integrity.
The system, which Gluchowski described on X (formerly Twitter) as “a hierarchical system of on-chain courts similar to the real-world judiciary,” would allow apps built atop Ethereum to appeal for a chain “fork” in the event that they are hacked or face some other sort of security crisis.
“Code is law, bug = death,” Gluchowski wrote in a follow-up comment to his Sept. 2 post.
Smart contract implementation risks remain the biggest unsolved problem of Defi. L2s are equally affected.Let me pitch an idea: L1 Fork as the Court of Final Appeal.First, why existing solutions don't work:1) Time-locked upgrades are great for scheduled changes, but… pic.twitter.com/EcaogkZBH9
— Alex G. ∎ (@gluk64) September 2, 2023
Today, when apps on Ethereum are hacked and money is siphoned away from victims, the only real recourse is typically a fork of the blockchain – where a majority of the chain’s users and operators move to a new version of the chain that rolls back its history.
The DAO hack of 2016 – where hackers ran away with a massive chunk of all circulating ETH – famously led to one of these forks. Ethereum’s key stakeholders came to a “social consensus” that a new version of the chain, where the hack never happened, would become the “canonical chain.” (The old Ethereum chain, “ETH Classic,” still exists today but has relatively few users).
Chain forks are extremely rare. On a political and practical level, forking a chain means achieving social consensus – convincing a majority of the chain’s operators that the chain requires a fork, and then rallying them all to update their software.
Forks also come with philosophical issues – the idea that a blockchain’s state is “permanent” is one of the main reasons people are willing to imbue it with value. If a chain is forked over and over again, people may come to trust and value it less.
Overcoming these hurdles is a difficult feat, meaning that even as billions of dollars have been stolen from Ethereum users over the past few years, a fork hasn’t been used to remedy things since the DAO hack.
Gluchowski’s proposal would formalize the use of Ethereum’s “social consensus layer” to secure platforms like DeFi apps and so-called layer-2 networks known as “rollups.” These apps could secure billions of dollars worth of cryptocurrency yet can’t fork Ethereum themselves if things go catastrophically wrong (as they sometimes do).
Under Gluchowski’s proposed system, if an Ethereum-based platform is exploited (for example), the community behind it would be able to work its case through a smart contract-based court system.
“Each court will also have to specify a higher court where any decision can be appealed – until at some point we reach the Ethereum Supreme Court,” Gluchowski wrote in his post. “The decision of this smart contract can only be determined by a (technically soft) fork of the L1.”
The Matter Labs CEO caveats that the system should be extremely expensive to use, adding that “only truly extraordinary cases” will be brought before the Supreme Court.
“Think of a bug in Uniswap, a major L2, a Defi protocol with a systemic risk, etc.,” he wrote.
Judging by the comments beneath Gluchowski’s original tweet, he has a lot of convincing to do if he hopes to bring his idea to fruition. As Gluchowski himself noted in the proposal, Ethereum co-founder Vitalik Buterin has warned explicitly against overburdening Ethereum’s “social consensus layer,” and Gluchowski’s court system would undoubtedly put more pressure on Ethereum’s community to monitor and respond to hiccups.
“I am openly challenging it,” Gluchowski wrote of Buterin’s May 2023 blog post on the topic.
Gluchowski’s proposal does underscore how security has become top-of-mind for Ethereum app developers. Layer 2 apps like zkSync, the rollup platform developed by Matter Labs, hold billions of dollars in user funds – value that could be completely lost in the event of bugs and hacks. As these platforms become larger and more systemically important, Gluchowski doesn’t think that status quo solutions – like security councils and time-locked upgrades – will be sufficient for protecting users.
“The most important function of such a system will be to protect protocols against political inference from the outside,” Glukowski wrote. “It will serve as a great deterrence mechanism, and will elevate the role of Ethereum as a powerful network state.”
