A fraud proof is a technical mechanism that acts as a bond in decentralized application (dApp) ecosystems that use Optimistic Rollups (ORs), which are sidechains that aim to reduce fees and latency that dApps may encounter on a blockchain platform. To incentivize good performance, a sequencer responsible for processing ORs must include a fraud proof with their work. Sequencers are financially rewarded for processing rollups in accordance with consensus rules, and financially punished for violating them by forfeiting their fraud proof.
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