Decentralized Asset Custody Scheme with Security against Rational\n Adversary

Abstract

Asset custody is a core financial service in which the custodian holds\nin-safekeeping assets on behalf of the client. Although traditional custody\nservice is typically endorsed by centralized authorities, decentralized custody\nscheme has become technically feasible since the emergence of digital assets,\nand furthermore, it is greatly needed by new applications such as blockchain\nand DeFi (Decentralized Finance).\n In this work, we propose a framework of decentralized asset custody scheme\nthat is able to support a large number of custodians and safely hold customer\nassets of multiple times the value of the total security deposit. The proposed\ncustody scheme distributes custodians and assets into many custodian groups via\ncombinatorial designs, where each group fully controls the assigned assets.\nSince every custodian group is small, the overhead cost is significantly\nreduced. The liveness is also improved because even a single alive group would\nbe able to process transactions.\n The security of this custody scheme is guaranteed under the rational\nadversary model, such that any adversary corrupting a bounded fraction of\ncustodians cannot move assets more than the security deposit paid. We further\nanalyze the security and performance of our constructions from both theoretical\nand experimental sides and give explicit examples with concrete numbers and\nfigures for a better understanding of our results.\n