Across gathers liquidity pools of ERC20 tokens on Ethereum to facilitate fast withdrawals of token deposits on Layer 2 (L2) networks like Optimism and Arbitrum. The deposits on Layer 2 are one-way and are sent by the L2 network’s slow native bridge to the pool on Ethereum, reimbursing liquidity providers. This can be thought of as the liquidity providers giving a short-dated loan on Ethereum secured by Layer 2 deposits.

To bridge the tokens, relayers post a bond along with the L2 deposit details, which allow withdrawals from the liquidity pool on Ethereum after a short challenge period. The relayer can also advance the money to the depositor and get reimbursed from the liquidity pool themselves after the challenge period. UMA’s oracle mechanism allows anyone to dispute invalid relays during the challenge period and claim the relayer’s bond if the relay was incorrect.

Depositors pay liquidity providers a fee based on the utilization of the pool for access to liquidity on Ethereum. Optionally, they may also offer a fee to incentivize relayers to validate their deposit, or they may relay the tokens themselves.

There are a few possible paths a deposit can take. It's important to understand that depositors can not lose funds in any of these scenarios.

Also, in every scenario, any tokens deposited on L2 are transferred to the bridge pool on L1 through the Optimism or Arbitrum native bridge, reimbursing bridge pool liquidity providers.

This is the most common scenario.

An instant relayer sees a deposit on L2 and immediately advances the amount of the deposit (minus LP and relayer fees) to the recipient address, while making a claim to the bridge pool.

After a challenge window of two hours, the bridge pool compensates the instant relayer with the deposit amount minus LP fees.

An instant relayer sees a deposit on L2 and immediately advances the amount of the deposit (minus LP and relayer fees) to the recipient address, while making a claim to the bridge pool.

Within a challenge window of two hours, someone raises a dispute, claiming that the relay was incorrect. The dispute goes to UMA's Optimistic Oracle for resolution. It takes 48-96 hours for an Optimistic Oracle voting cycle to complete.

When there is a dispute, the relay is canceled, and the deposit will need to be relayed again as a slow relay. If the new slow relay passes the challenge window without being disputed, that means that the original instant relay was correct, and the original relayer is compensated from the bridge pool with the deposit amount minus LP and slow relay fees. The new slow relayer gets the slow relay fee. After the oracle determines that the original relay was correct, the original relayer will also receive a portion of the disputer's bond.

If the oracle determines that the relay was incorrect, no money is paid out of the bridge pool, and the disputer is rewarded with a bond posted by the instant relayer. The recipient address keeps whatever was advanced to them by the instant relayer.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. No instant relayer comes along to accelerate the transfer.

After a challenge window of two hours, the bridge pool sends the deposit amount minus LP and slow relay fees to the recipient address. The slow relayer claims the slow relay fee.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. No instant relayer comes along to accelerate the transfer.

Within a challenge window of two hours, someone raises a dispute, claiming that the relay was incorrect. The dispute goes to UMA's Optimistic Oracle for resolution. It takes 48-72 hours for an Optimistic Oracle voting cycle to complete.

If the relay was correct, the depositor receives their deposit amount from the bridge pool minus LP and slow relay fees. The slow relayer receives the slow relay fee plus a bond posted by the disputer.

When there is a dispute, the relay is canceled, and the deposit will need to be relayed again as a slow relay. If the new slow relay passes the challenge window without being disputed, the new slow relayer gets the slow relay fee. After the oracle determines that the original relay was correct, the original relayer receives a portion of the disputer's bond.

If the relay was incorrect, no money is paid out of the bridge pool, and the disputer is rewarded with a bond posted by the original slow relayer.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. An instant relayer comes along to accelerate the transfer.

After this, the flow is identical to any other instant relay, except that the slow relayer will receive the slow relay fee. If the relay was a fast relay to begin with, the instant relayer would receive both the slow and instant relay fees.

An L2 deposit is made but relay fees are set too low to incentivize any relayers to register the event with the bridge pool on L1.

No funds are lost, but the depositor will need to relay the deposit themselves, or have someone else do it on their behalf, possibly with an out-of-band payment.

Note that it is reasonable to set relay fees to zero if the depositor plans to relay their own funds or expects someone else to do it on their behalf for some reason other than relay fees.

Across gathers liquidity pools of ERC20 tokens on Ethereum to facilitate fast withdrawals of token deposits on Layer 2 (L2) networks like Optimism and Arbitrum. The deposits on Layer 2 are one-way and are sent by the L2 network’s slow native bridge to the pool on Ethereum, reimbursing liquidity providers. This can be thought of as the liquidity providers giving a short-dated loan on Ethereum secured by Layer 2 deposits.

To bridge the tokens, relayers post a bond along with the L2 deposit details, which allow withdrawals from the liquidity pool on Ethereum after a short challenge period. The relayer can also advance the money to the depositor and get reimbursed from the liquidity pool themselves after the challenge period. UMA’s oracle mechanism allows anyone to dispute invalid relays during the challenge period and claim the relayer’s bond if the relay was incorrect.

Depositors pay liquidity providers a fee based on the utilization of the pool for access to liquidity on Ethereum. Optionally, they may also offer a fee to incentivize relayers to validate their deposit, or they may relay the tokens themselves.

There are a few possible paths a deposit can take. It's important to understand that depositors can not lose funds in any of these scenarios.

Also, in every scenario, any tokens deposited on L2 are transferred to the bridge pool on L1 through the Optimism or Arbitrum native bridge, reimbursing bridge pool liquidity providers.

This is the most common scenario.

An instant relayer sees a deposit on L2 and immediately advances the amount of the deposit (minus LP and relayer fees) to the recipient address, while making a claim to the bridge pool.

After a challenge window of two hours, the bridge pool compensates the instant relayer with the deposit amount minus LP fees.

An instant relayer sees a deposit on L2 and immediately advances the amount of the deposit (minus LP and relayer fees) to the recipient address, while making a claim to the bridge pool.

Within a challenge window of two hours, someone raises a dispute, claiming that the relay was incorrect. The dispute goes to UMA's Optimistic Oracle for resolution. It takes 48-96 hours for an Optimistic Oracle voting cycle to complete.

When there is a dispute, the relay is canceled, and the deposit will need to be relayed again as a slow relay. If the new slow relay passes the challenge window without being disputed, that means that the original instant relay was correct, and the original relayer is compensated from the bridge pool with the deposit amount minus LP and slow relay fees. The new slow relayer gets the slow relay fee. After the oracle determines that the original relay was correct, the original relayer will also receive a portion of the disputer's bond.

If the oracle determines that the relay was incorrect, no money is paid out of the bridge pool, and the disputer is rewarded with a bond posted by the instant relayer. The recipient address keeps whatever was advanced to them by the instant relayer.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. No instant relayer comes along to accelerate the transfer.

After a challenge window of two hours, the bridge pool sends the deposit amount minus LP and slow relay fees to the recipient address. The slow relayer claims the slow relay fee.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. No instant relayer comes along to accelerate the transfer.

Within a challenge window of two hours, someone raises a dispute, claiming that the relay was incorrect. The dispute goes to UMA's Optimistic Oracle for resolution. It takes 48-72 hours for an Optimistic Oracle voting cycle to complete.

If the relay was correct, the depositor receives their deposit amount from the bridge pool minus LP and slow relay fees. The slow relayer receives the slow relay fee plus a bond posted by the disputer.

When there is a dispute, the relay is canceled, and the deposit will need to be relayed again as a slow relay. If the new slow relay passes the challenge window without being disputed, the new slow relayer gets the slow relay fee. After the oracle determines that the original relay was correct, the original relayer receives a portion of the disputer's bond.

If the relay was incorrect, no money is paid out of the bridge pool, and the disputer is rewarded with a bond posted by the original slow relayer.

A slow relayer sees a deposit on L2 and registers the deposit with the bridge pool. An instant relayer comes along to accelerate the transfer.

After this, the flow is identical to any other instant relay, except that the slow relayer will receive the slow relay fee. If the relay was a fast relay to begin with, the instant relayer would receive both the slow and instant relay fees.

An L2 deposit is made but relay fees are set too low to incentivize any relayers to register the event with the bridge pool on L1.

No funds are lost, but the depositor will need to relay the deposit themselves, or have someone else do it on their behalf, possibly with an out-of-band payment.

Note that it is reasonable to set relay fees to zero if the depositor plans to relay their own funds or expects someone else to do it on their behalf for some reason other than relay fees.