Proofs in Local Protocol

Local Protocol targets decentralized physical infrastructure networks (DePINs) where many valuable services lack cheap, deterministic proofs. The protocol treats verifiability as a spectrum and provides mechanisms that remain secure even when only probabilistic evidence is available.

Our approach acknowledges a spectrum of verifiability and provides a path forward for networks that may not have access to hard or cost-effective service proofs.

Local Protocol is an expressive architecture whose approach to verifiability is adaptable to a wide range of DePIN projects. In the root case, the protocol assumes that services do not have access to robust service-proofs.

Spectrum of Verifiability

Verifiability is a spectrum between:

Hard proofs: deterministic, cryptographically verifiable evidence (e.g., cryptographic attestations, signatures tied to objective system events).
Soft proofs: probabilistic evidence (e.g., location signals, sensor readings, human attestations, reputation signals) that can be informative but not perfectly binding.

Local Protocol is designed so soft proofs can still be useful without becoming a free attack surface: they feed into bounded weights, market-relative seeds, and claim verification (caps + audits + slashing).

Proofs as Graph Attributes

In graph theory, a node is a point representing an entity (buyer, seller), and an edge is a connection between two nodes (transactions). In Local protocol, we model identity-proofs (and other trust attributes for users) as node attributes and service-proofs as edge attributes.

See: The Transaction Graph and Graph Commitments & Epoch Snapshots.

Proofs are ledger facts attached to nodes/edges. The protocol consumes them in a few specific places (seed construction, edge-weight adjustment, risk/cap policy), and their effect propagates through the graph via snapshot-relative diffusion.

You can think of both identity and service proofs as injecting trust into the network. As the network becomes more trustworthy, the protocol becomes more confident in distributing rewards that are greater than the fees collected for each transaction. This unlocks a rich surface area for capital formation to bootstrap new markets. New markets can inherit the security from existing markets providing the network with a strong cross-market network effect.

For immature markets that want to prioritize bootstrapping trust, proofs can concentrate influence through the protocol-defined, market-relative teleport distribution and through edge-weight adjustments (see Snapshot-Relative Diffusion and Market Bootstrapping). As the market matures, reliance on expensive proofs can be reduced via policy caps, decay schedules, and lower proof multipliers.

Trust propagation under diffusion

Under snapshot-relative diffusion, proofs influence the walk in two protocol-defined ways:

Seed mass (teleport) updates: stronger proofs can increase (in market context ) or seed eligibility.
Edge weight adjustments: service proofs/disputes change proof_factor and quality in edge weights.

See: Service Proofs and Dispute Resolution & Collateral.

The effect naturally diminishes over distance: in a restarted random walk, influence along length- paths is damped by roughly .

Probabilistic evidence and confidence

Many proofs are not binary. Local Protocol treats these as confidence-weighted signals and uses them only through protocol-defined, bounded interfaces.

See: Proofs as Probabilities

Proof attachments in State Diff Lists (SDLs)

Proofs are committed to the canonical ledger as part of execution outputs. Concretely, proofs can be included as proof attachments inside a State Diff List (SDL)—the compact, verifiable bundle of ledger mutations that is produced by execution and finalized by the protocol.

See State Model for the definition of SDLs and how they compose into a single canonical state.