A few weeks ago, we published an article that focused on Vitalik Buterin’s revelation of the existence of backdoors on all Ethereum rollups. He claimed that these backdoors allowed developers to intervene and make corrections to the protocol in the event of a bug. The co-founder of the Ethereum blockchain had, with these words, caused great panic in the ecosystem. It was hard to believe that solutions that we thought were decentralized could be accessible to developers who can make modifications whenever they want. What is it really ? We took a closer look at the issue to find out what risks these backdoors represent for users of Ethereum’s L2 solutions.
The importance of rollups for the functioning of Ethereum?
The information that there are backdoors in all Ethereum Layer 2 solutions was not widely known before Buterin spoke about it. For the community, L2s are a solution with the potential to revolutionize transaction processing on Ethereum.
For everyone else, Ethereum’s L2 solutions have always been completely decentralized and should not be accessible to developers. Is this just window dressing? In reality, it is not so. We must first understand the importance of rollups for the Ethereum network.
It is known that the Ethereum blockchain is often cluttered by the excessive volume of transactions carried out there. The only way to decongest this layer 1 was to create secondary blockchains to which part of the network load will be transferred.
This is where the creation of Layers 2 comes from. Layers 2 of the network are a kind of corridors added to the network and which manage part of the load in order to avoid congestion of the main network. Rollups are therefore layer 2 solutions grouping a certain number of transactions into a single batch which is then sent back to layer 1, that is to say on the main blockchain.
The question is therefore whether the transactions carried out on rollups are really reliable, given that there are backdoors.
Why are backdoors essential for Ethereum rollups to function optimally?
In reality, rollups are a very new technology. Layer 2 solutions have only recently been developed. This technology has not yet reached the level of stability and maturity required to operate in a completely decentralized manner.
For this, a training period is necessary to ensure that all the contours of the technology are mastered and that the correct technical settings are made for the rollups to function properly.
This is exactly the principle of training wheels that Vitalik Buterin talked about in his video which caused the outcry. In fact, rollup technology is similar to a child’s bicycle. Two small training wheels are attached on either side – training wheels – while the novice user gets used to driving.
But what happens when during the training period, if we notice any bugs in the layer 2 protocol? A technical correction must be made quickly, otherwise several transactions risk being compromised.
It is to be able to make these corrections that the developers have put in place a mechanism in the form of backdoors. These backdoors present on the rollups help to guarantee the proper functioning of the protocol and to modify it, for example in the event of force majeure. This is why most DeFi applications are launched with backdoors.
That said, backdoors are not meant to stay on rollups forever. However, there is a certain process involved in removing the training wheels. Indeed, after a certain “training” time, the Layer 2 will reach the required level of robustness and maturity. Then, the training wheels can be removed and decentralized governance will take over management of the protocol.
It should be noted that several Layer 2 have already expressed their desire to proceed with progressive decentralization. In November 2022, Vitalik proposed a process for the removal of training wheels. But in the meantime, what can we do about the risk these backdoors represent for the network?
How to guarantee the security of layers 2 with the existence of backdoors?
The risk posed by the existence of backdoors on Ethereum rollups is that if developers can access them, so can hackers. The latter could steal funds from the protocols. Despite the objectivity of this reasoning, several measures have been taken to avoid abuse.
Indeed, before modifying or updating a layer 2 protocol is possible, several people must generally enter their key for the modification to be validated. We are talking about a multisignature address. To better understand, let’s take the example of Abritrum, which is worth almost $5 billion and is currently the largest protocol in terms of value.
The case of the Arbitrum protocol
The Arbitrum protocol is administered by a security council composed of 12 signatories from various DeFi protocols and elected semi-annually by the DAO. Each of the 12 members has a key to the network’s multisignature address. A modification or update of the protocol is only possible if 9 of the 12 signatories sign and validate the transaction. If one of the 9 signatories decides to steal the funds from Arbitrum, he will have to convince the 8 others.
The chances of him being able to convince this world to make a malicious modification are very slim. Access to these backdoors on rollups is therefore not as simple as you might think. It is enough that the keys are not only held by the developers. The presence of actors external to the protocol on the board of directors prevents developers from doing their bidding.
Clearly, the backdoors present on rollups are generally well secured. They only exist to allow developers to intervene in the event of a bug. They are vital until the protocol reaches the level of maturity necessary to be administered by a decentralized autonomous organization.
Finally, we will recall the case of the AAC lending platform which was initially deployed with backdoors. In October 2020, backdoors were removed and developers transitioned to decentralized governance. Thus, there is no need to fear for the security of funds on layer 2 of the Ethereum blockchain due to the existence of backdoors on rollups.
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