Settlement Layer

The settlement layer plays a crucial role in modular blockchain architecture. Its main functions include state transition verification and bridging components, ensuring the validity of off-chain state updates in Layer 2, and securing asset transfers between Layer 1 and Layer 2. Some technical teams further divide the settlement layer into arbitration layer and bridging layer, with the arbitration layer responsible for verifying commitments.

As described in the WowChain proposal, proposer nodes regularly submit state commitments to the Dogecoin blockchain, representing the completion of large-scale off-chain transactions and the achievement of new states in Layer 2. The publication of state commitments and the generation of zero-knowledge proofs occur simultaneously, with zero-knowledge proofs published on the Dogecoin mainnet in the form of Taproot-locked UTXOs.

WowChain adopts a non-interactive on-chain verification scheme. Once the proposer submits a commitment on the Dogecoin chain, validation nodes on the Dogecoin network observe this commitment and attempt to fetch the corresponding full dataset off-chain to verify its integrity. If an error is detected, validation nodes can initiate a single interaction to directly involve Dogecoin nodes in identifying specific errors in the original dataset related to the commitment submitted by the proposer. Subsequently, the validation nodes can seize the proposer’s Dogecoin UTXO as a penalty.

Efficient Penalty Mechanism

Unlike systems like bitVM, WowChain‘s one-time penalty mechanism is not based on a challenge-response structure. Validation nodes can determine if the proposer is engaged in malicious behavior in a single interaction and immediately apply penalties. This is achieved through the technical features of Taproot scripts and time locks. In addition to proposers and validators, external observers can also retroactively examine the movement of specific UTXOs on the Dogecoin blockchain to verify the validity of commitments. Once a commitment is finalized, it becomes immutable. WowChain inherits Dogecoin’s finality over Layer 2 ledger data through this mechanism. The role and details of commitments will be discussed further later.

Simplified Process Description

The entire process can be explained as follows: the sequencer notifies everyone that the next transaction needs to compute “1 + 1 = ?”. Each Rollup node, upon receiving this message, will automatically compute “1 + 1 = 2” locally. Among these Rollup nodes, some are pre-designated as proposers, and proposers have the responsibility to announce to everyone on the Dogecoin blockchain that the next Layer 2 state should be “2”.

The proposer submits the hash value “2” on the Dogecoin blockchain, indicating the hash result of the current Layer 2 state. Along with the submission of the hash value, the proposer provides a zero-knowledge proof of the calculation process in the form of a Taproot-locked UTXO. Anyone can verify the correctness of the current Layer 2 state by examining the spending of the related UTXO.

In this way, WowChain ensures the integrity, transparency, and security of the settlement process, while leveraging Dogecoin’s robust infrastructure as support.