Nomadic Labs, a leading innovation in the Tezos ecosystem, has unveiled Oxford 2, a major upgrade to the protocol. This advancement promises to transform the experience for validators and developers, while strengthening the security and flexibility of the Tezos network. Indeed, Oxford 2 improves the management of staked funds for validators, by introducing an automated auto-staking system. This update introduces private Smart Rollups and facilitates the deployment of rollups when transactions must remain confidential. The update reintroduces Timelocks with a new, more robust design that addresses vulnerabilities. We explain to you in this article what all this means more concretely.
Emergence of a new automated staking management system
The Oxford 2 update introduces a new automated system for staking management at Tezos. This thus simplifies the transition to the mechanism for managing the funds involved.
The operation of this new system is clearly defined. Validators retain the freedom to set a deposit limit higher than the default of 10% of their stake balance. Furthermore, at the end of each validation cycle, the protocol automatically adjusts the staked deposits so that they correspond to the deposit limit chosen by the validator.
This automated staking system offers several significant advantages. It minimizes disruption for validation operations. It also reduces the administrative burden for validators. Finally, it offers a reduction in the risk of human errors strengthening the security and reliability of the Tezos network. However, this change is not without consequences. Validators can no longer manually manage their staked funds since the protocol automatically manages staked funds based on the chosen deposit limit.
Overall, the anticipated impact of this automated stake system should be positive and result in a reduction in the complexity of use for validators. Not to mention an improvement in the security and reliability of the betting system itself.
Oxford 2 introduces a more precise review of sanctions
In the Oxford 2 update, significant adjustments have been made to the penalties regarding double signatures. This is behavior that may compromise the security and integrity of the Tezos registry. Oxford 2 sets this penalty at 5% of the stake.
Additionally, Oxford 2 introduces changes to the enforcement of penalties imposed on Tezos network actors who break the rules or act maliciously. These financial sanctions now take effect at the end of a blockchain cycle, as opposed to immediate application after the inclusion of the corresponding denunciation operation. They can also take place after the distribution of the cycle certification rewards and before the calculation of new voting rights.
In addition, balance updates resulting from these sanctions are now published in the block closing the cycle, including tez burned and denunciation rewards. Repeat validators, i.e. those who have suffered a 51% reduction in their stakes over 2 cycles, will now be prohibited from participating in the consensus for the remainder of the cycle. This, until the reassessment of their status, carried out according to the same criteria.
Return of timelocks for enhanced security
The Oxford 2 update will reintroduce timelocks into the Tezos protocol. It is broadly a mechanism used in crypto to impose deadlines on certain operations or to restrict access to certain resources for a specific period. Developers will once again be able to benefit from a powerful tool for increased control and security.
Previously disabled due to a vulnerability, timelocks have undergone a complete overhaul and rigorous testing, including an external audit. This ensures that they effectively protect data and assets while addressing security concerns.
Timelocks will have the advantage of promoting secure storage of sensitive data or assets for a predetermined period. This, without the help of a trusted third party. They will also allow access to specific people at specific times.
Overall, the reintroduction of timelocks will allow Tezos developers to create decentralized, secure and controlled applications.
Emergence of private rollups
With Oxford 2, Tezos Smart Rollups benefit from a powerful new option: private rollups. They allow operators to create “whitelists” for participation, ensuring the confidentiality of sensitive data, previously accessible with standard open fraud evidence. This option addresses specific use cases requiring strict data control while retaining the main benefits of Smart Rollups.
Private rollups drive some improvements for developers. They simplify building on Tezos’ Smart Rollup infrastructure for faster deployment.
Finally, WASM Smart Rollup version 2.0.0-r3 expands querying capabilities for storing rollups and paves the way for integration with Tezos’ Decentralized Asset Layer (DAL). Existing rollups benefit from automatic updates, while new rollups use it seamlessly.
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