We propose a new way to share licensed spectrum bandwidth capacity in mobile networks between operators, service providers, and end users using blockchain-based smart contracts. We discuss the foundational building blocks in the contract as well as various extensions to support more advanced features such as bulk purchases and future reservations. Furthermore, we demonstrate how the system can be implemented with an open source, permissioned enterprise blockchain, Hyperledger Sawtooth. We show that our smart contract implementation can improve blockchain transaction performance, by approximately four orders of magnitude compared to serial transactions and one order of magnitude compared to parallel transactions, by using public key infrastructure driven bulk purchases of mobile access grants, paving the way for fully automated, efficient, and fine-grained roaming agreements. We conclude with a discussion of lessons learned from two end-to-end use cases we implemented to validate our distributed ledger design.
James Austgen, Andrés Fábrega, Sarah Levin Allen, Kushal Babel · 6 authors
Decentralized Autonomous Organizations (DAOs) use smart contracts to foster communities working toward common goals. Existing definitions of decentralization, however-the 'D' in DAO-fall short of capturing key properties characteristic of diverse and equitable participation. We propose a new metric called Voting-Bloc Entropy (VBE, pronounced ''vibe'') that formalizes a broad notion of decentralization in voting on DAO proposals. VBE measures the similarity of participants' utility functions across a set of proposals. We use VBE to prove a number of results about the decentralizing effects of vote delegation, proposal bundling, bribery, and quadratic voting. Our results lead to practical suggestions for enhancing DAO decentralization. One of our results highlights the risk of systemic bribery with increasing DAO decentralization. To show that this threat is realistic, we present the first practical realization of a Dark DAO, a proposed mechanism for privacy-preserving corruption of identity systems, including those used in DAO voting. Our Dark-DAO prototype uses trusted execution environments (TEEs) in the Oasis Sapphire blockchain for attacks on Ethereum DAOs. It demonstrates that Dark DAOs constitute a realistic future concern for DAO governance.
Delegated-Proof-of-Stake (DPoS) blockchains, such as EOSIO, Steem and TRON, are governed by a committee of block producers elected via a coin-based voting system. We recently witnessed the first de facto blockchain takeover that happened between Steem and TRON. Within one hour of this incident, TRON founder took over the entire Steem committee, forcing the original Steem community to leave the blockchain that they maintained for years. This is a historical event in the evolution of blockchains and Web 3.0. Despite its significant disruptive impact, little is known about how vulnerable DPoS blockchains are in general to takeovers and the ways in which we can improve their resistance to takeovers. In this paper, we demonstrate that the resistance of a DPoS blockchain to takeovers is governed by both the theoretical design and the actual use of its underlying coin-based voting governance system. When voters actively cooperate to resist potential takeovers, our theoretical analysis reveals that the current active resistance of DPoS blockchains is far below the theoretical upper bound. However in practice, voter preferences could be significantly different. This paper presents the first large-scale empirical study of the passive takeover resistance of EOSIO, Steem and TRON. Our study identifies the diversity in voter preferences and characterizes the impact of this diversity on takeover resistance. Through both theoretical and empirical analyses, our study provides novel insights into the security of coin-based voting governance and suggests potential ways to improve the takeover resistance of any blockchain that implements this governance model.
Smart contracts are rapidly applied in many fields, with their varied types and increasing complexity. A sharp increase in the method development demands seems to be certain. However, this type of development has its unique programming language and security requirements, making it difficult for regular software personnel to adapt quickly. It is important to realize that the development efficiency is application specific and that getting this application issue solved is critical for its further development. To this end, we proposes a new, automatic, and intelligent contract-generation method, based on code annotation. First of all, combined with the semantic annotation information of smart contract code association ,a clustering analysis model is built to realize fast and accurate clustering with functions similar to smart contract. Then, based on Char-RNN network, a multi-level and automatic generation method of intelligent contract knowledge base is built to realize the automatic generation at different levels, such as contract layer, function layer and interface layer. Finally,by using text matching technology and by calculating the semantic similarity of the user text demands as well as the smart contract knowledge base annotation, the relevant contract code is automatically extracted for users to choose, with the aims to improve the method efficiency and to meet the needs of different users. To test the effectiveness of the method, with the aid of bilingual quality assessment BLEU and Mythril, VaaS and other code security tools for evaluation are used and results are compared with the existing method. The generated code BLEU average score was increased by 27% and the average accuracy was increased by 11.5%.Therefore, the smart contract generated by our method is relatively accurate and reliable.
The rapid progression of Decentralized Finance (DeFi) has established Decentralized Exchanges (DEX) as critical elements in the financial landscape. Nevertheless, the open and transparent nature of DEX makes them susceptible to strategic manipulations, especially the sandwich attack. During such maneuvers, ill-intentioned actors exploit price slippage by positioning their transactions strategically around a target’s order to reap unfair profits. This paper introduces a ground-breaking framework rooted in mechanism design game theory to lessen the impact of sandwich attacks. The framework delineates the precise strategy of the sandwich attack and its repercussions, shedding light on the tactical aspects and utility functions pertinent to both the attackers and the ordinary traders, subsequently referred to as workers. The discussion extends to defining utility functions for both the market and the workers, emphasizing the benefits of liquidity provision for the market and the potential profits and losses for the workers. The proposal encourages adopting a market-centric mechanism design grounded in game theory, wherein the market, operating as the designer, creates rules to maximize its utility while considering the workers’ utility. Through a meticulous analysis of this game-theoretic approach, the study identifies optimum strategies for all the involved parties, demonstrating that these strategies can reach a balanced state. Further, this study presents a comparative view against existing research, highlighting the limitations of contemporary solutions and asserting the effectiveness of the proposed model in protecting the interests of both the market and the workers. Ultimately, this research furnishes stakeholders with new perspectives and instruments to thwart sandwich attacks and lays a foundation for creating resilient and fair decentralized trading infrastructures.
The rapid rise in blockchain-based Decentralized Autonomous Organizations (DAOs) offers policy-makers and decision-makers new opportunities to automatically execute decisions and processes that help enhance transparency, accountability, participation and trust.Yet, many DAOs have a limited lifespan.There is little empirical evidence of the effect of governance elements on the viability of DAOs.Using 220 on-chain governed DAOs, this paper analyses how governance elements (accountability, decision/voting, and incentives) influence the viability of DAOs in the longterm.The findings show that DAOs without weighted decisionmaking and without incentive structures are more viable than those with weighted decision power and incentive mechanisms.This suggests that financial and share-like DAO governance elements do not or may even negatively contribute to the long-term viability of DAOs.Also, voting power distribution is found to have a statistically significant influence on DAOs' viability.We further propose a preliminary theory that relates governance elements to the long-term viability of DAOs.These insights will help policymakers in designing more viable DAOs.Future research should investigate how DAO objectives, the chosen deployment infrastructure and the type of users can impact the long-term viability of DAOs.
Stefan Kitzler, Stefano Balietti, Pietro Saggese, Bernhard Haslhofer · 5 authors
We present a study analyzing the voting behavior of contributors, or vested users, in Decentralized Autonomous Organizations (DAOs). We evaluate their involvement in decision-making processes, discovering that in at least 7.54% of all DAOs, contributors, on average, held the necessary majority to control governance decisions. Furthermore, contributors have singularly decided at least one proposal in 20.41% of DAOs. Notably, contributors tend to be centrally positioned within the DAO governance ecosystem, suggesting the presence of inner power circles. Additionally, we observed a tendency for shifts in governance token ownership shortly before governance polls take place in 1202 (14.81%) of 8116 evaluated proposals. Our findings highlight the central role of contributors across a spectrum of DAOs, including Decentralized Finance protocols. Our research also offers important empirical insights pertinent to ongoing regulatory activities aimed at increasing transparency to DAO governance frameworks.
We develop a general and practical framework to address the problem of the optimal design of dynamic fee mechanisms for multiple blockchain resources. Our framework allows to compute policies that optimally trade-off between adjusting resource prices to handle persistent demand shifts versus being robust to local noise in the observed block demand. In the general case with more than one resource, our optimal policies correctly handle cross-effects (complementarity and substitutability) in resource demands. We also show how these cross-effects can be used to inform resource design, i.e. combining resources into bundles that have low demand-side cross-effects can yield simpler and more efficient price-update rules. Our framework is also practical, we demonstrate how it can be used to refine or inform the design of heuristic fee update rules such as EIP-1559 or EIP-4844 with two case studies. We then estimate a uni-dimensional version of our model using real market data from the Ethereum blockchain and empirically compare the performance of our optimal policies to EIP-1559.
In recent years the adoption of smart contracts, in blockchain platforms, has increased substantially. One of the main applications of smart contracts are the so called Decentralized Autonomous Organizations (DAO), which originated from an idea envisaged by Buterin, in his Ethereum white paper. Indeed, DAOs are decentralized organizations, where the members implement their decisions using smart contracts. In the article, we introduce a simple framework for a DAO, and then we discuss some governance issues. In particular, we focus on how DAO members could be induced to dedicate sufficient time to voting sessions, for a proper functioning of the organization. Indeed, recent empirical research suggests how the members’ participation rate, to voting activities, has a meaningful positive correlation with to a DAO's performance. More specifically, we formalize the notion of attention time and propose a simple model for the so-called Holographic Consensus, a protocol introduced by the DAOStack platform to solve the issue of limited time dedicated to governance, discussing under what conditions DAO members may choose the so-called boosting voting procedure.
The use of smart contracts is transforming traditional industry and business practices. It enables the automatic enforcement of contractual terms without the need for a trusted third party. Smart contracts can automate a variety of transactions on Blockchain. Despite their numerous benefits, some challenges, such as security vulnerabilities, still need to be addressed before smart contracts can be widely adopted.This paper introduces two models of smart contracts – one simple and one more complex – using the interactive theorem prover Agda. This is a step towards converting the previous work of verifying Bitcoin smart contracts using weakest preconditions [1], [2] to Ethereum’s Solidity-style [3] smart contracts. Since Ethereum’s contracts are object-oriented, this model is substantially more complex than Bitcoin’s. We provide models supporting simple and complex executions, the calling of other contracts, and functions referring to addresses and messages. Furthermore, these models also support transferring money to other contracts and updating specific contracts, and the more complex model includes gas cost and pure functions.
We present an implementation of a Web3 platform that leverages the Groth16 Zero-Knowledge Proof schema to verify the validity of questionnaire results within Smart Contracts. Our approach ensures that the answer key of the questionnaire remains undisclosed throughout the verification process, while ensuring that the evaluation is done fairly. To accomplish this, users respond to a series of questions, and their answers are encoded and securely transmitted to a hidden backend. The backend then performs an evaluation of the user's answers, generating the overall result of the questionnaire. Additionally, it generates a Zero-Knowledge Proof, attesting that the answers were appropriately evaluated against a valid set of constraints. Next, the user submits their result along with the proof to a Smart Contract, which verifies their validity and issues a non-fungible token (NFT) as an attestation of the user's test result. In this research, we implemented the Zero-Knowledge functionality using Circom 2 and deployed the Smart Contract using Solidity, thereby showcasing a practical and secure solution for questionnaire validity verification in the context of Smart Contracts.
Phuong Duy Huynh, Thisal De Silva, Son Hoang Dau, Xiaodong Li · 6 authors
We investigate in this work a recently emerged type of scam ERC-20 token called Trapdoor, which has cost investors billions of US dollars on Uniswap, the largest decentralised exchange on Ethereum, from 2020 to 2023. In essence, Trapdoor tokens allow users to buy but preventing them from selling by embedding logical bugs and/or owner-only features in their smart contracts. By manually inspecting a number of Trapdoor samples, we established the first systematic classification of Trapdoor tokens and a comprehensive list of techniques that scammers used to embed and conceal malicious codes, accompanied by a detailed analysis of representative scam contracts. In particular, we developed TrapdoorAnalyser, a fine-grained detection tool that generates and crosschecks the error-log of a buy-and-sell test and the list of embedded Trapdoor indicators from a contract-semantic check to reliably identify a Trapdoor token. TrapdoorAnalyser not only outperforms the state-of-the-art commercial tool GoPlus in accuracy, but also provides traces of malicious code with a full explanation, which most of the existing tools lack. Using TrapdoorAnalyser, we constructed the very first dataset of about 30,000 Trapdoor and non-Trapdoor tokens on UniswapV2, which allows us to train several machine learning algorithms that can detect with very high accuracy even Trapdoor tokens with no available Solidity source codes.
Jiachi Chen, Jiang Hu, Xin Xia, David Lo · 7 authors
Decentralized Finance (DeFi) uses blockchain technologies to transform traditional financial activities into\ndecentralized platforms that run without intermediaries and centralized institutions. Smart contracts are\nprograms that run on the blockchain, and by utilizing smart contracts, developers can more easily develop\nDeFi applications. Some key features of smart contracts – self-executed and immutability – ensure the\ntrustworthiness, transparency and efficiency of DeFi applications, and have led to a fast-growing DeFi market.\nHowever, misbehaving developers can add traps or backdoor code snippets to a smart contract, which are\nhard for contract users to discover. We call these code snippets in a DeFi smart contract as “DeFi Contract\nTraps" (DCTs). In this paper, we identify five DeFi contract traps and introduce their behaviors, describe\nhow attackers use them to make unfair profits, and analyse their prevalence in the Ethereum platform. We\npropose a symbolic execution tool, DeFiDefender, to detect such traps and use a manually labeled small-scale\ndataset that consists of 700 smart contracts to evaluate it. Our results show that our tool is not only highly\neffective but also highly efficient. DeFiDefender only needs 0.48s to analyze one DeFi smart contract and\nobtains a high average accuracy (98.17%), precision (99.74%), and recall (89.24%). Among the five DeFi contract\ntraps introduced in this paper, four of them can be detected through contract bytecode without the need for\nsource code. We also apply DeFiDefender to a large-scale dataset that consists of 20,679 real DeFi related\nEthereum smart contracts. We found that 52.13% of these DeFi smart contracts contain at least one contract\ntrap. Although a smart contract that contains contract traps is not necessarily malicious, our finding suggests\nthat DeFi related contracts have many centralized issues in a zero-trust environment and in the absence of a\ntrusted part
We provide a game-theoretic analysis of the problem of front-running attacks. We use it to distinguish attacks from legitimate competition among honest users for having their transactions included earlier in the block. We also use it to introduce an intuitive notion of the severity of front-running attacks. We then study a simple commit-reveal protocol and discuss its properties. This protocol has costs because it requires two messages and imposes a delay. However, we show that it prevents the most severe front-running attacks while preserving legitimate competition between users, guaranteeing that the earliest transaction in a block belongs to the honest user who values it the most. When the protocol does not fully eliminate attacks, it nonetheless benefits honest users because it reduces competition among attackers (and overall expenditure by attackers). This paper was accepted by Joshua Gans, business strategy. Funding: The authors gratefully acknowledge the financial support of the Ethereum Foundation [Grant FY22-0840].
The rise of decentralized autonomous systems has accelerated the development of multi-agent ecosystems where independent entities interact, cooperate, and compete to achieve collective goals. Traditional governance models for such ecosystems often struggle with scalability, trust, and adaptability, particularly as agent behaviors evolve dynamically in complex environments. To address these challenges, this study proposes a governance framework that integrates adaptive reinforcement learning (RL) agents coordinated through blockchain-enabled smart contracts. In this approach, reinforcement learning agents continuously adapt policies in response to changing environmental conditions and evolving system objectives. Their adaptive decision-making is augmented by blockchain smart contracts, which provide a tamper-resistant, transparent, and decentralized coordination layer. Smart contracts encode governance rules, enforce accountability, and ensure that cooperative behaviors among agents are aligned with agreed-upon protocols. This integration prevents unilateral manipulation, supports dynamic consensus, and fosters equitable participation across diverse agents. The framework is designed to function across decentralized infrastructures where centralized oversight is infeasible. By embedding governance into programmable contracts, system operations become both autonomous and verifiable, enabling trust in high-stakes contexts such as decentralized finance, energy trading, and smart city management. Simulations demonstrate that combining adaptive RL with blockchain governance enhances stability, resilience, and efficiency under conditions of uncertainty, while reducing risks of collusion or free-riding. This paradigm illustrates a pathway toward self-governing decentralized ecosystems, where intelligent agents not only optimize their actions but also collectively enforce fair, scalable, and transparent governance. It advances both the technical foundations of multi-agent reinforcement learning and the institutional frameworks of decentralized autonomy.
In this chapter, the authors give a theoretical overview of the landscape of decentralized autonomous organizations (DAOs) as the native organizational structure of Web 3. The authors place this new formation in the existing theoretical framework of transaction cost economics and new institutional economics analyzing their governance from economic and legal perspectives. They argue that DAOs are so-called hybrid organizations, which embrace features from the free market and from hierarchical organizations. DAOs show characteristics of hybrids such as pooling resources, coordinating operations by contracts and facing competition in their coordination. However, their changing nature imposes challenges in their identification.
Firms are increasingly adopting blockchains as a form of knowledge engineering to align their internal processes, share information, and improve oversight. We study intraorganizational blockchains from an agency perspective to understand how the distributed, sequenced, and consensus-based nature of blockchains mitigates information asymmetries and affects organizational structures. First, we explain how blockchains differ from conventional relational, contractual, and system-based mechanisms to address three pertinent information challenges—concentration, continuity, and conflict. Subsequently, we address the consequences of introducing such blockchains, arguing that they create both direct and sequenced information channels among principals and agents, which elicit an organizational reconfiguration via vertical disintermediation and lateral reintermediation. Finally, we theorize the implications of blockchain-based organizing for agency theory regarding the chain of command, the unity of direction, and the span of control. Overall, we show how blockchains for intraorganizational governance can mitigate principal-agent problems and impact organizational design in profound ways.
Sowelu Avanzo, Teodoro Criscione, Julio Linares, Claudio Schifanella
Recent advancements of blockchain technologies ensure security and trustability of Community Currency Systems (CCSs), enabling their increasingly widespread adoption. These systems aim at empowering the local economies by virtue of a medium of exchange whose governance and circulation are local. Smart contracts enable the enforcement of token economy policies, which facilitate the experimentation of radically new economic models. Recent studies investigated blockchain-based CCSs. Still, to the best of our knowledge, this is the first study analyzing a CCS providing a token-based Universal Basic Income (UBI). We evaluate the Circles UBI decentralised application utility in delivering an unconditional income to its users, focusing on its main pilot project running in Berlin. We analyse the structural changes in the network, especially in relation to a subsidy program, involving local businesses. We also identify prominent users based on centrality measures, and investigate how the UBI was effectively spent. We adopt a method agnostic to the economic context to identify optimal aggregation windows for the temporal network of CCS transactions based on the Causal Fidelity (CF) index. This aims to provide static representations as accurate as possible in terms of sequential order of edges, which aspect was not considered in previous research on CCSs. Our findings suggest that the pilot project sustained the expansion of the economic network and the system facilitated trade in urban communities in Berlin. Future research is needed to identify methods to ensure sustainability of self-organised CCSs adopting a UBI issuance scheme and to further decentralise their governance.
Double auctions are procedures to trade commodities such as electricity or parts of the wireless spectrum at optimal prices. Buyers and sellers inform the auctioneer what quantity they want to buy or sell at specific prices. The auctioneer aggregates these offers into demand and supply curves and finds the intersection representing the optimal price. In this way, commodities exchange owners in an economically-efficient manner. Ideally, the auctioneer is a trusted third party that does not abuse the information they gain. However, the offers reveal sensitive information about the traders, which the auctioneer may use for economic gain as insider information. These concerns are not theoretical; investigations against auctioneers in electricity and advertisement auctions for manipulating auctions are ongoing. These concerns call for solutions that conduct double auctions in a privacy-preserving and verifiable way. However, current solutions are impractical: To the best of our knowledge, the only solutions satisfying these properties require full interaction of all participants. In this work, we design a more practical solution. We propose the first privacy-preserving and verifiable double auction scheme that does not require traders to interact actively, tailored to electricity trading on (inter)national exchanges. Our solution relies on homomorphic encryption, commitments, and zero-knowledge proofs. In a simulated auction with 256 traders, we observe that traders take up to 10 seconds to generate their order, the auctioneer takes 10 seconds to verify an order, and the auction result is computed and verified in 30 seconds. We extrapolate these results to larger auctions to show the practical potential.
Alpesh Bhudia, Anna Cartwright, Edward Cartwright, Darren Hurley-Smith · 5 authors
Consensus algorithms facilitate agreement on and resolution of blockchain functions, such as smart contracts and transactions. Ethereum uses a Proof-of-Stake (PoS) consensus mechanism, which depends on financial incentives to ensure that validators perform certain duties and do not act maliciously. Should a validator attempt to defraud the system, legitimate validators will identify this and then staked cryptocurrency is `burned' through a process of slashing. In this paper, we show that an attacker who has compromised a set of validators could threaten to perform malicious actions that would result in slashing and thus, hold those validators to ransom. We use game theory to study how an attacker can coerce payment from a victim, for example by deploying a smart contract to provide a root of trust shared between attacker and victim during the extortion process. Our game theoretic model finds that it is in the interests of the validators to fully pay the ransom due to a lack of systemic protections for validators. Financial risk is solely placed on the victim during such an attack, with no mitigations available to them aside from capitulation (payment of ransom) in many scenarios. Such attacks could be disruptive to Ethereum and, likely, to many other PoS networks, if public trust in the validator system is eroded. We also discuss and evaluate potential mitigation measures arising from our analysis of the game theoretic model.
Blockchain technology promises to revolutionize not only the way we transact among peers but also the way we organize to create socio-economic value. Decentralized autonomous organizations (DAOs) are governed and owned by the community whose members follow a set of blockchain-embedded governance rules that define and control participation. In this chapter, we will clarify what governance decentralization and automation mean, examining DAOs’ distinguishing characteristics. We will also discuss the problems that DAOs solve (e.g., lack of extrinsic incentives, censorship, mismanagement and lack of transparency and accountability), as well as the problems they face (e.g., lack of participation, rigidity, voting misbehaviours and legal status).
Non-fungible tokens(NFTs) are on the rise. They can represent artworks exhibited for marketing purposes on webpages of companies or online stores -- analogously to physical artworks. Lending of NFTs is an attractive form of passive income for owners but comes with risks (e.g., items are not returned) and costs for escrow agents. Similarly, renters have difficulties in anticipating the impact of artworks, e.g., how spectators of NFTs perceive them. To address these challenges, we introduce an NFT rental solution based on a pay-per-like pricing model using blockchain technology, i.e., smart contracts based on the Ethereum chain. We find that blockchain solutions enjoy many advantages also reported for other applications, but interestingly, we also observe dark sides of (large) blockchain fees. Blockchain solutions appear unfair to niche artists and potentially hamper cultural diversity. Furthermore, a trust-cost tradeoff arises to handle fraud caused by manipulation from parties outside the blockchain. All code for the solution is publicly available at: https://github.com/asopi/rental-project
Augusto Sampaio, Pedro Antonino, Juliandson Ferreira, Filipe Arruda · 5 authors
We present a framework that supports the safe deployment and upgrade of smart contracts based on the design-by-contract paradigm. The starting point is an interface specification with invariants and pre- and postconditions for each function. The first deployed smart contract must conform to this specification. Specification evolution might involve both changing the data representation as well as extending the interface with new functions, provided the evolved specification is a refinement of the original one. Implementation evolution must conform to the corresponding specification. We report on the applicability of the framework in the verification of smart contracts that implement some Ethereum standards.
Bruno Medeiros de Oliveira, Pedro Antonino, Augusto Sampaio
Transaction costs are a barrier to the wide adoption of decentralized applications. To address this issue, this paper proposes a framework to optimize transaction fees by carrying out a conflict-avoiding packaging of multiple smart-contract calls into a single transaction. It relies on two main concepts: a way to optimize the bundling of transactions with a conflict-avoiding packaging strategy and a way to execute such bundles with a package-processing methodology. We illustrate our framework and the gas economy it can bring with a case study where we analyze a popular Ethereum smart contract.