Achieving state machine replication without honest players

McMenamin, Conor; Daza, Vanesa; Pontecorvi, Matteo

doi:10.1145/3479722.3480986

Cited by 6 publications

(3 citation statements)

References 22 publications

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“…We also believe it is necessary to model the decision of all rational players based on expected extractable value (EEV) that can generated by particular orderings of transactions/blocks by any player in the system, and not just the miner. The approach taken is to consider EEV as the maximum of all nonprotocol strategies, with protocols considered secure if the EEV of following the protocol is strictly dominated by following the protocol strategy, which is further formalised in [26]. In our paper, we also consider an additional case of EEV not necessarily considered in [23] which is prevalent in commit-reveal protocols such as [12].…”

Section: A Extended Related Workmentioning

confidence: 99%

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FairTraDEX: A Decentralised Exchange Preventing Value Extraction

McMenamin¹,

Daza²,

Fitzi³

2022

Preprint

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An idealised decentralised exchange (DEX) provides a medium in which players wishing to exchange one token for another can interact with other such players and liquidity providers at a price which reflects the true exchange rate, without the need for a trusted third-party. Unfortunately, extractable value is an inherent flaw in existing blockchain-based DEX implementations. This extractable value takes the form of monetizable opportunities that allow blockchain participants to extract money from a DEX without adding demand or liquidity to the DEX, the two functions for which DEXs are intended. This money is taken directly from the intended DEX participants. As a result, the cost of participation in existing DEXs is much larger than the upfront fees required to post a transaction on a blockchain and/or into a smart contract.We present FairTraDEX, a decentralised variant of a frequent batch auction (FBA), a DEX protocol which provides formal game-theoretic guarantees against extractable value. FBAs when run by a trusted third-party provide unique game-theoretic optimal strategies which ensure players are shown prices equal to the liquidity provider's fair price, excluding explicit, pre-determined fees. FairTraDEX replicates the key features of an FBA that provide these game-theoretic guarantees using a combination of setmembership in zero-knowledge protocols and an escrow-enforced commit-reveal protocol. We extend the results of FBAs to handle monopolistic and/or malicious liquidity providers, and provide a detailed pseudo-code implementation of FairTraDEX based on existing mainstream blockchain protocols.

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Section: A Extended Related Workmentioning

confidence: 99%

“…• Strong Incentive Compatible in Expectation (SINCE) [26]: With respect to a protocol strategy, a protocol strategy is SINCE for a player if all other strategies have strictly smaller expected utility.…”

mentioning

confidence: 99%

FairTraDEX: A Decentralised Exchange Preventing Value Extraction

McMenamin¹,

Daza²,

Fitzi³

2022

Preprint

Self Cite

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“…The non-rational players are known as Byzantine, and are modelled as deviating from the protocol either maliciously or randomly, and being controlled by a single adversary. This player model is known as the ByRa model [21], which we use in this paper. The ByRa model is a necessary improvement on the legacy BAR model [15] for the true consideration of incentives in distributed systems, removing any dependencies on altruistic, honest-by-default players which cannot be assumed to exist in incentive-driven protocols like blockchain/DC protocols.…”

Section: Blockchainsmentioning

confidence: 99%

Marvel DC: A Blockchain-Based Decentralized and Incentive-Compatible Distributed Computing Protocol

McMenamin¹,

Daza²

2022

Preprint

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Decentralized computation outsourcing should allow anyone to access the large amounts of computational power that exists in the Internet of Things.Unfortunately, when trusted third parties are removed to achieve this decentralization, ensuring an outsourced computation is performed correctly remains a significant challenge. In this paper, we provide a solution to this problem.We outline Marvel DC, a fully decentralized blockchain-based distributedcomputing protocol which formally guarantees that computers are strictly incentivized to correctly perform requested computations. Furthermore, Marvel DC utilizes a reputation management protocol to ensure that, for any minority of computers not performing calculations correctly, these computers are identified and selected for computations with diminishing probability. We then outline Privacy Marvel DC, a privacy-enhanced version of Marvel DC which decouples results from the computers which computed them, making the protocol suitable for computations such as Federated Learning, where results can reveal sensitive information about that computer that computed them. We provide an implementation of Marvel DC and analyses of both protocols, demonstrating that This document is part of a project that has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement number 814284

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Invited Paper: Cross-Chain State Machine Replication

Xue

Herlihy²

2022

Lecture Notes in Computer Science

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Achieving state machine replication without honest players

Cited by 6 publications

References 22 publications

FairTraDEX: A Decentralised Exchange Preventing Value Extraction

FairTraDEX: A Decentralised Exchange Preventing Value Extraction

Marvel DC: A Blockchain-Based Decentralized and Incentive-Compatible Distributed Computing Protocol

Invited Paper: Cross-Chain State Machine Replication

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