In a recent thread, Alex Gluchowski, Matter Labs co-founder and CEO, ignited the Ethereum community with his proposition of an “Ethereum Supreme Court” to counter the recurrent issues pertaining to smart contract applications in the decentralized finance or DeFi landscape. His vision revolves around setting up an on-chain court system, resembling real-world judiciaries, to offer resolution mechanisms for smart contract-related disputes.
Gluchowski, in his discourse, highlighted the severe limitations in the DeFi space associated with Layer 2 (L2) implementations. He pinpointed the inefficacy of the current measures to handle emergencies and vulnerabilities efficiently, arguing the need for more time-locked upgrades. This, Gluchowski argues, is a solution for planned changes but lacks the agility to tackle sudden and unexpected situations.
Moreover, Gluchowski stressed the complications resulting from non-forkable assets bridged from Ethereum, making fork-related problem resolutions complex. He highlighted the role of security councils but emphasized they must provide comprehensive solutions. While multisigs from governance can solve some issues, they add regulatory and security risks, unraveled the DeFi systems’ infancy.
As Gluchowski navigated through various governance mechanism scenarios, he unveiled an interesting concept. Security councils may temporarily freeze contracts, requiring token governance approval for emergency upgrades. However, he also shed light on the potential pitfalls of this approach, where a rogue majority of undercollateralized stakers could execute an unauthorized takeover upgrade, leading to theft of assets.
Broadening on Gluchowski’s idea, the Ethereum Supreme Court would serve as the ultimate authority, enacted by a technically soft fork of L1. Each protocol within the Ethereum ecosystem would depict its governance and emergency upgrade mechanisms. Furthermore, protocols would appoint individual contracts as an instance of appeal. The proposal conjures an appeal period during emergency upgrades, during which anyone can contest the decision in a higher court by providing a predefined bail deposit.
In terms of implementation, the proposal suggests strengthening the social consensus followed by the deployment of “canonical” court instance with exorbitantly high costs, thus reserving it only for truly unprecedented cases. Gluchowski’s concept has stimulated conversations within the Ethereum community, some even expressing a keen interest in further exploration and development of the proposed system. Expressing the willingness to support the research in this novel direction, Gluchowski mentioned that Zksync — an Ethereum layer 2 scaling solution developed by Matter Labs.
The contours of the proposal are intriguing, but they also elicit caution. Would it benefit the larger protocols while leaving the smaller ones in the lurch? And wouldn’t the risk of overburdening L1 social consensus remain?
Source: Cryptonews
