RegGuard: Legitimacy and Fairness Enforcement for Optimistic Rollups

TL;DR

RegGuard enhances optimistic rollups with legitimacy, cross-layer consistency, and fairness guarantees, making them suitable for regulated financial applications by significantly reducing failures and manipulation.

Contribution

Introduces RegGuard, a comprehensive framework combining semantic validation, state synchronization, and fair ordering to address regulatory compliance in optimistic rollups.

Findings

Reduces settlement failures by over 90%

Prevents detectable ordering manipulation

Maintains 85% of baseline throughput

Abstract

Optimistic rollups provide scalable smart-contract execution but remain unsuitable for regulated financial applications due to three structural gaps: semantic legitimacy, cross-layer state consistency, and ordering fairness. We introduce RegGuard, a unified framework that enhances optimistic rollups with comprehensive legitimacy guarantees. RegGuard integrates three coordinated mechanisms: a decidable semantic validator powered by the RegSpec rule language for encoding regulatory constraints; a cross-layer state pre-synchronization validator that detects inconsistent L1-L2 dependencies with probabilistic reliability bounds; and a cryptographically verifiable fair-ordering service that ensures transaction sequencing fairness with negligible violation probability. We implement a 15,000-line prototype integrated into an Optimism-based rollup and evaluate it under adversarial conditions. RegGuard reduces settlement failures by over 90%, prevents detectable ordering manipulation, and maintains 85% of baseline throughput.