Optimistic Diffusion Claims

Local Protocol allows participants to include diffusion-derived reward outputs inside their transaction SDLs without requiring validators to compute as a global vector.

This uses optimistic verification: claims are accepted subject to a challenge window; incorrect claims are deterred with bonds + slashing and are verifiable via sampling.

What a user is allowed to claim

A user submitting a transaction SDL may include a reward claim:

The claim is a function of:

committed snapshot roots
the canonical snapshot artifact identifier (to fetch authenticated snapshot data needed for audits, including MarketRegistry; see Graph Commitments & Epoch Snapshots and Performance & Storage)
protocol parameters
transaction contents (counterparty, amount, and market context)
a protocol-defined estimator (random-walk / Monte Carlo diffusion)

Safety is achieved by combining:

strict caps (deterministic safety rails):
- per-transaction:
- per-user per-epoch:
- per-market per-epoch:
- optional global backstop:
canonical randomness (no grinding)
priced verification (bounded work)
bonds and slashing (negative EV for cheating)
delayed sampling (prevents adaptive transcripts)

Canonical randomness (kills grinding)

Each epoch has a randomness beacon . For each transaction id txid, walk seeds are derived deterministically:

This removes user choice and prevents seed grinding / “variance extraction”.

Transcript commitment + delayed sampling (prevents adaptive cheating)

Commit now, sample later

The prover:

computes the claim and a transcript for Monte Carlo walks
commits to a transcript root
posts a commitment hash:

Then sampling indices are derived from future randomness (e.g., ):

Because is unknown at commit time, the prover cannot craft a transcript that is only valid on the checked parts.

Transcript contents (minimal sketch)

For walk (length ):

starting node (sampled from the market-relative teleport , with teleport sampling proofs against and optionally a per-market seed alias commitment )
visited nodes
for each step :
- restart decision correctness
- market-scoped edge sampling proof:
  - open OutIndex(m) for the current node via Merkle proof from marketOutIndexRoot
  - prove the sampled outgoing edge index using a Merkle opening against the aliasRoot from OutIndex(m)
  - open the selected edge entry via Merkle proof against the adjacencyRoot from OutIndex(m)
final contribution to the estimator (e.g., terminal node count, hit counts, discounted hits)

Verification and penalties (validator audits)

In high-volume markets, a protocol-chosen subset of claims is mandatorily audited by assigned validators, and failed audits finalize as fact-layer penalties.

See: Validator Audits & Penalties