papers/lux-fraud-proofs/sections/14-fault-attribution.tex

\section{Fault Attribution}


Correctly identifying and penalizing malicious actors is essential for maintaining system integrity.

\subsection{Identifying Malicious Parties}

The protocol must distinguish between:
\begin{itemize}
    \item Invalid assertions by sequencers
    \item False challenges by adversaries
    \item Honest mistakes vs. malicious behavior
    \item Coordinated attacks vs. individual actors
\end{itemize}

\subsection{Correct Bond Slashing}

Slashing must be proportional and deterministic:

\begin{algorithm}
\caption{Bond Slashing Logic}
\begin{algorithmic}[1]
\State \textbf{Input:} Challenge result, Participants
\State \textbf{Output:} Slashing amounts
\If{Defender lost}
    \State Slash defender's bond
    \State Reward challenger
\ElsIf{Challenger lost}
    \State Slash challenger's bond
    \State Compensate defender for gas costs
\EndIf
\State Update reputation scores
\State Adjust future bond requirements
\end{algorithmic}
\end{algorithm}

\subsection{False Challenge Penalties}

Penalties for false challenges must balance deterrence with encouraging legitimate challenges:

\begin{equation}
\text{Penalty}_{\text{false}} = \begin{cases}
0.1 \times B & \text{first false challenge} \\
0.5 \times B & \text{second false challenge} \\
1.0 \times B & \text{third+ false challenge}
\end{cases}
\end{equation}

\subsection{Social Recovery Mechanisms}

For catastrophic failures, social recovery provides a last resort:

\begin{enumerate}
    \item \textbf{Emergency Pause}: Governance can halt the system
    \item \textbf{State Recovery}: Restore from last known good state
    \item \textbf{Compensation}: Treasury funds for affected users
    \item \textbf{Protocol Upgrade}: Fix vulnerabilities through governance
\end{enumerate}