Verilay: A Verifiable Proof of Stake Chain Relay

Abstract: Blockchain relay schemes enable cross-chain state proofs without requiring trusted intermediaries. This is achieved by applying the source blockchain's consensus validation protocol on the target blockchain. Existing chain relays allow for the validation of blocks created using the Proof of Work (PoW) protocol. Since PoW entails high energy consumption, limited throughput, and no guaranteed finality, Proof of Stake (PoS) blockchain protocols are increasingly popular for addressing these shortcomings. We propose Verilay, the first chain relay scheme that enables validating PoS protocols that produce finalized blocks, for example, Ethereum 2.0, Cosmos, and Polkadot. The concept does not require changes to the source blockchain protocols or validator operations. Signatures of block proposers are validated by a dedicated relay smart contract on the target blockchain. In contrast to basic PoW chain relays, Verilay requires only a subset of block headers to be submitted in order to maintain full verifiability. This yields enhanced scalability. We provide a prototypical implementation that facilitates the validation of Ethereum 2.0 beacon chain headers within the Ethereum Virtual Machine (EVM). Our evaluation proves the applicability to Ethereum 1.0's mainnet and confirms that only a fraction of transaction costs are required compared to PoW chain relay updates.