Is the contest period really necessary for cross-chain transactions in 2-way-peg sidechains?

Question

According to the first sidechain article (Link), the cross chain transaction process can be briefly describe as follows:

1. Alice has a wallet on sidechain S1. She wants to send some coins to sidechain S2. So she makes a transaction containing some coins, send it to a certain locked-output on S1.

2. Wait for confirmation period to end.

3. After the transaction is confirmed, she submits a SPV proof to S2.

4. Again, she has to wait for a contest period.

5. After the contest period ends, an equivalent amount of coins is created and sent to her wallet on S2.

I assume that both the sidechains are secure, otherwise there is not much left to discuss. If they are secure, then after the confirmation period in step 2 above, the sidechain S2 already knows that the transaction is confirmed on sidechain S1. For example, if Alice purchases something using Bitcoins, step 3 is where she can get the product she purchased from a normal store.

In my opinion, after the confirmation period, the transaction is already in a stable part of S1. Thus, there cannot be any valid SPV proof that contradicts the SPV proof Alice sent, unless S1 does not satisfy the persistence property.

Therfore, I would like to ask, why is the contest period necessary? Is there something I am missing in my argument? Thank you.

Answer 1

she submits a SPV proof to S2.

The way this worked in the first implementation of the sidechains paper by the same authors (called Elements Alpha, now elements) is as follows: The genesis block of the sidechain S2 creates a bunch of outputs with a new opcode OP_WPV that can be spent with an SPV proof showing that some amount on S1 has been "sent to a certain-locked output". Note that S2 follows the UTXO model of Bitcoin and there's no global state that OP_WPV could look up. That means that it's possible to provide exactly the same SPV proof to another OP_WPV locked output and effectively transfer your coins from S1 twice. That's why there needs to be a contest period where honest nodes have the opportunity to provide a fraud proof and lock the coins back into the OP_WPV.

Now if there needs to be a contest period anyway, we can make the confirmation period shorter than what we would assume to be secure against reorgs. Instead, the contest period is used to provide a window for reorganization proofs.

You can find more information about how this mechanism worked in this article: https://github.com/jonasnick/elementsproject.github.io/blob/master/source/_posts/The-Federated-Peg-in-Elements-Alpha.md.