The idea that “code is law” should hold final power in resolving disputes, even in the most severe circumstances, has gained widespread acceptance in the blockchain community. However, a key player in the Ethereum blockchain ecosystem is now arguing that, in some extreme situations, using human judgment as opposed to strictly adhering to hard-coded rules may be more beneficial.
The idea of a “Ethereum Supreme Court” has been put forth by Alex Gluchowski, the CEO of Matter Labs, a maker of a layer 2 network on Ethereum, to resolve conflicts that endanger the reliability of the primary blockchain. According to Gluchowski, applications built on Ethereum will be able to request a chain “fork” in the case of a security breach or hacking incident through a hierarchical system of on-chain courts that is analogous to real-world judicial systems. As Gluchowski puts it, “Code is law, bug = death,” so it’s critical to deal with issues as soon as possible.
Currently, the typical response to financial theft from Ethereum applications is to start a blockchain fork. The majority of users and operators must switch to a new chain in order to completely erase the hack’s history. One such fork was brought about by the infamous DAO attack in 2016, when Ethereum’s major players came to a “social consensus” to create a new canonical chain. However, because they cast doubt on the idea of a blockchain’s permanence and have the potential to damage confidence, chain splits are uncommon and need a lot of work to reach social consensus.
The goal of Gluchowski’s proposal is to formally establish the use of Ethereum’s social consensus layer to protect platforms like layer-2 networks called “rollups” and decentralized finance (DeFi) apps. These services frequently store cryptocurrency valued at billions of dollars, but they lack the power to fork Ethereum on their own in the event of unfavorable circumstances. If an Ethereum-based platform is misused, the community that supports it would handle the legal proceedings using a smart contract-based court system, according to Gluchowski’s system. Up to the Ethereum Supreme Court, which would have the last say, each court would have the option to appeal. However, doing so would technically need a soft fork of Layer 1 (Layer 1).
Gluchowski acknowledges that the suggested system should be too expensive to implement, restricting its use to genuinely rare situations like flaws in important protocols like Uniswap or systemic dangers in DeFi. He may encounter resistance and difficulties in gaining acceptance for his proposal, as Vitalik Buterin, the co-founder of Ethereum, has issued a warning against overtaxing Ethereum’s social consensus layer. The pressure on the Ethereum community to keep an eye on problems and take action would surely increase under Gluchowski’s judicial system.
However, Gluchowski’s suggestion reveals the rising security awareness among Ethereum app developers. Large sums of customer money are stored in layer-2 apps like Matter Labs’ zkSync, which are vulnerable to flaws and hackers. Gluchowski thinks that traditional solutions like security councils and time-locked upgrades may not be enough to protect consumers when these platforms gain more notoriety and systemic significance. He views the suggested method as a way to strengthen Ethereum’s position as a reliable network state and protect protocols from outside political intervention.