Flood and Loot Attack in Distributed Routing Protocols in PCNs

Abstract

Payment Channel Networks (PCNs) can significantly enhance the scalability of blockchain transactions without requiring major modifications to the underlying distributed ledger protocol. However, to enable efficient and secure payment routing over multiple channels, PCNs necessitate additional components: an onion routing protocol for anonymity and a locking mechanism to prevent race conditions. Unfortunately, these mechanisms can be exploited by malicious actors to launch flood and loot attacks. We investigate the impact of flood and loot attacks on networks that employ local knowledge-based routing algorithms. In these scenarios, malicious nodes can manipulate hash-locks to unfairly capitalize on the benefits of participating nodes. We specifically examine the effects of these attacks on three popular routing algorithms: Swift, Speedy Murmurs, and Silent Whispers. Our analysis employs metrics like attack gain, attack cost, and transaction ratio to assess the impact of the attacks. Our simulation-based results demonstrate that, even with a relatively small fraction of malicious nodes (between 0.66% and 3.3%), the average attack transaction ratio across all evaluated routing algorithms is a concerning 16.23%.