Massimo Bartoletti, J. Chiang, Tommi Junttila, Alberto Lluch Lafuente · 6 authors
Decentralised Finance (DeFi) applications constitute an entire financial ecosystem deployed on blockchains. Such applications are based on complex protocols and incentive mechanisms whose financial safety is hard to determine. Besides, their adoption is rapidly growing, hence imperilling an increasingly higher amount of assets. Therefore, accurate formalisation and verification of DeFi applications is essential to assess their safety. We have developed a tool for the formal analysis of one of the most widespread DeFi applications: Lending Pools (LP). This was achieved by leveraging an existing formal model for LPs, the Maude verification environment and the MultiVeStA statistical analyser. The tool supports several analyses including reachability analysis, LTL model checking and statistical model checking. In this paper we show how the tool can be used to analyse several parameters of LPs that are fundamental to assess and predict their behaviour. In particular, we use statistical analysis to search for threshold and reward parameters that minimize the risk of unrecoverable loans.
Paying for electronic commerce products with cryptocurrencies is an increasingly popular method. However, the situations where a seller expects one specific cryptocurrency as a payment while a buyer only possesses another, inevitably create inconvenience to the buyer, which may lead to cancellation of purchase. In this paper, we propose a light-weighted software architecture of a payment system called NAGA platform that works with a number of crypto blockchain networks to support cross-cryptocurrency payments where buyers can pay in one currency, and the seller automatically receives another of his/her choice. This minimizes the complexity and inconvenience of the buyer, leading to an increase in sales and revenues of the electronic commerce system. With the built-in crypto exchange, crosscryptocurrency payment can be processed with real-time exchange rates that enables both buyers and sellers to receive cryptocurrency of their preferred choices.
Without relying on centralized intermediaries to participate in financial services such as exchanging and lending assets, Decentralized Finance (DeFi) has set off a new paradigm of asset self-management. On the other hand, data as an emerging asset becomes increasingly significant in our daily life. How to self-manage our data assets to raise their value deserves further exploration. Inspired by DeFi, we envision a decentralized eco-system/community where people can donate or trade data end-to-end for the public good and/or maximize data value. This paper explores this vision by building a DeFi-based data sharing and trading system. In order to explore the actual value of data in the market, we propose an elastic data pricing scheme that can dynamically adjust data prices based on data usage and timing. Finally, we implement and integrate these critical components into a prototyping system deployed onto Ethereum - the current leading blockchain system, and evaluate the system service performance, smart contracts functionality, and the robustness of the data pricing scheme.
Self-sovereign identity (SSI) has gained a large amount of interest. It enables physical entities to retain ownership and control of their digital identities, which naturally forms a conceptual decentralized architecture. With the support of the distributed ledger technology (DLT), it is possible to implement this conceptual decentralized architecture in practice and further bring technical advantages such as privacy protection, security enhancement, high availability. However, developing such a relatively new identity model has high costs and risks with uncertainty. To facilitate the use of the DLT-based SSI in practice, we formulate Self-Sovereign Identity as a Service (SSIaaS), a concept that enables a system, especially a system cluster, to readily adopt SSI as its identity model for identification, authentication, and authorization. We propose a practical architecture by elaborating the service concept, SSI, and DLT to implement SSIaaS platforms and SSI services. Besides, we present an architecture for constructing and customizing SSI services with a set of architectural patterns and provide corresponding evaluations. Furthermore, we demonstrate the feasibility of our proposed architecture in practice with Selfid, an SSIaaS platform based on our proposed architecture.
Kun Zhou, Chunping Wang, Xiaoqing Wang, Hongbing Cheng
Till the end of September 2021, the size of Bitcoin blockchain has reached 366.9GB and continues to increase at an average annual growth rate of 17.6%. The high requirement for storage space prevents new nodes from joining the network, which seriously hinders the development of blockchain technology. In this paper, in order to explore the data characteristics of Bitcoin’s block, we performed statistical experiment on the current 680,000 blocks. The analysis results showed that in nearly 95% of blocks, the number of spent transaction output(STXO) accounts for more than 67% of the total transaction output. Inspired by this, we proposed a hybrid storage scheme to reduce the size of blocks by deleting the transaction data with the STXO ratio over 67% firstly and compressing some fixed-length fields in those transactions. And then, the newly generated block files were deposited to the InterPlanetary File System(IPFS) private network to improve the scalability of Bitcoin network. The experiment results and analysis showed that our scheme achieved a compression ratio of 96.9% and could effectively help the Bitcoin full nodes save 330GB of storage space with guaranteeing the normal operation of Bitcoin network.
S. P. Vorobyev, Svetlana Shirobokova, Vladimir Evsin
As part of the modern approach to “digitalization”, distributed ledger systems are used more intensively as promising tools with a breakthrough innovative potential. This paper presents a possible implementation of a distributed ledger system using the cloud, fog, edge computing, and IoT technology. The paper describes the aspects that should be considered when building a distributed ledger architecture optimization model (dynamic distribution of network services, explosive volumes of maintenance traffic, difficult-to-predict heterogeneous nature of data traffic from various IoT devices). The relevance of using a fractal model to describe data traffic in a distributed ledger network is shown. The research presents a formalized problem definition of minimizing data traffic and network load, which takes into account the distribution of data processing and storing assets, as well as the implementation of services in the cloud, fog, and edge computing environments to create an optimal multilayer topology of the computer network architecture based on a distributed ledger system. The experimental results for Poisson and fractal traffic models obtained using a genetic optimization algorithm with a variable mutation are presented.
Weizhao Tang, Lucianna Kiffer, Giulia Fanti, Ari Juels
Most permissionless blockchain networks run on peer-to-peer (P2P) networks, which offer flexibility and decentralization at the expense of performance (e.g., network latency). Historically, this tradeoff has not been a bottleneck for most blockchains. However, an emerging host of blockchain-based applications (e.g., decentralized finance) are increasingly sensitive to latency; users who can reduce their network latency relative to other users can accrue (sometimes significant) financial gains. In this work, we initiate the study of strategic latency reduction in blockchain P2P networks. We first define two classes of latency that are of interest in blockchain applications. We then show empirically that a strategic agent who controls only their local peering decisions can manipulate both types of latency, achieving 60\% of the global latency gains provided by the centralized, paid service bloXroute, or, in targeted scenarios, comparable gains. Finally, we show that our results are not due to the poor design of existing P2P networks. Under a simple network model, we theoretically prove that an adversary can always manipulate the P2P network's latency to their advantage, provided the network experiences sufficient peer churn and transaction activity.
Today, the majority of the web’s content and user data is controlled by a few large tech companies. There is a growing movement to devolve this control evenly across the entire internet, representing the transition to Web3. In order for this movement to be successful, technologies and protocols must be developed to enable web users to use the web securely without trusting any other user. That is, today’s web is structured so that users must trust these companies, so trustless alternatives haven’t already been developed. Broadly, this movement emphasizes developing peer-to-peer networks, blockchains, and distributed storage systems. These systems make use of cryptographic primitives to guarantee security.
This paper presents a protocol to manage decentralized access and use of Permissioned Public Blockchain Networks using Ethereum technology as the underlying protocol. It proposes a solution to avoid DDOS and enforce accountability while eliminating transaction fees. The protocol has been tested and implemented in the LACChain Blockchain Networks.
We present a decentralized online gaming platform implemented as a Decentralized Application (DApp) on the Ethereum blockchain. The gaming platform enables secure gaming, where the account balances and the stakes of the players are secured by a smart contract. Moreover, the fair enforcement of the game rules and the deposit of the winnings of the players and the gaming platform into their accounts are guaranteed by the smart contract. The gaming platform proposes lending functionalities that allow players to securely borrow tokens from the gaming platform in order to participate in the games.
As cryptocurrency markets such as Bitcoin and Ethereum increase worldwide, cryptocurrency exchanges, service providers, and governments need to monitor and analyze cryptocurrency transactions. There are a few studies to analyze Bitcoin data in open-source projects. However, under massive data volume in the blockchain structure, we still meet the challenges of data processing or analysis speed and efficient data structure. For this purpose, this paper introduces BitSQL, which minimizes significantly database construction time and analysis performance using well-known RDBMS. BitSQL maintains the compact database due to a data mapping technique and a transaction split technique for Bitcoin analysis and it achieves the fast response time due to the index of the database. In addition, as BitSQL is based on the well-known RDBMS, we can easily support web integration or visualization tools. Through experiments, we demonstrate that the data mapping technique can decrease the database size by 95% compared to the simple Bitcoin data storing method. We also show that BitSQL can perform easily analysis regarding balances, transactions, and Bitcoin address clustering heuristics through SQL query statements. This study contributes to the scalable Bitcoin analysis software construction method for analyzing and tracking cryptocurrency blockchains and creating services.
Scientific research, and particularly research in mathematics, is arguably one of the crowning achievements of our collective human intellect. Its creation increasingly requires collaboration between multiple researchers with different and sometimes complementary backgrounds. On the other hand, its verification requires a careful matching between the expertise of reviewers and authors. Unfortunately, errors do happen and sometimes are only corrected many years after they appear in print, if at all. Nevertheless, at least when it comes to mathematical research, computer-verified formal proofs are possible as a final arbiter of mathematical truth, however, they are hard to produce even for relatively simple statements. Hence, such approaches typically lack far behind the current research frontier. In our work we present a novel blockchain-based system to tackle such issues. We discuss how the use of a combination of existing technologies such as decentralized file storage, review systems, smart contracts, non-fungible tokens (NFTs) and proof assistants can speed up and improve the quality and collaboration of mathematical research. As a proof of concept, we also design a mechanism to incentivize collaborative work and credit sharing that encourages provers to share their partial progresses without delay. Simultaneously, our mechanism incentivizes expert reviewers to challenge publicized proofs with formal proofs enabling dispute resolution, if needed.
Befekadu G. Gebraselase, Bjarne E. Helvik, Yuming Jiang
Bitcoin is the first and the most extensive decentralized electronic cryptocurrency system that uses blockchain technology. It uses a peer-to-peer (P2P) network to operate without a central authority and propagate system information such as transactions or blockchain updates. The communication between participating nodes is highly relying on the underlying network infrastructure to facilitate a platform. Understanding the impact of peer formation strategies, peer list, and delay is vital in understanding node to node communication and the system performance. Therefore, we performed an extensive study on the transaction characteristics of Bitcoin through a testbed. The analysis shows that peer selection strategies affect the transaction propagation and confirmation times. In particular, better performance, in terms of smaller transaction confirmation time and lower number of temporary forks, may be achieved by adjusting the default nearby-based peer selection strategy.
Matthias Grundmann, Max Baumstark, Hannes Hartenstein
A recent spam wave of IP addresses in the Bitcoin P2P network allowed us to estimate the degree distribution of reachable peers. The resulting distribution indicates that about half of the reachable peers run with Bitcoin Core’s default setting of a maximum of 125 concurrent connections and nearly all connection slots are taken. We validate this result empirically. We use our observations of the spam wave to group IP addresses that belong to the same peer. By doing this grouping, we improve on previous measurements of the number of reachable peers and show that simply counting IP addresses overestimates the number of reachable peers by 15 %. We revalidate previous work by using our observations to estimate the number of unreachable peers.
In recent years, Blockchain arose as a key technology in building autonomous decentralised financial systems. Its ability to digitize trust enables building trustless systems such as cryptocurrencies where users do not need to rely on any third party to exchange value. The success of cryptocurrencies to operate without any intermediaries draw the interest of business operators who seek to bypass intermediation and thus to reduce cost and gain competitive advantages. As a result, Blockchain was used outside the crypto-sphere to build decentralized systems. However, this portage led to the inception of new types of Blockchains adapted to different specifications and with different designs. Consequently, the technology has diverged from its baseline (Bitcoin) to the point where some systems marketed as “blockchain” share only a few design concepts with the original Blockchain design proposed by Satoshi Nakamoto. This conceptual divergence alongside the lack of comprehensive models and standards made it difficult for both system designers and decision-makers to clearly understand what is a blockchain or to choose a suitable solution.This survey has a double goal; on the one hand, it attempts to contribute to the discussion on the ontological status of DLTs by providing a taxonomy oriented-framework (DCEA) for conceptualizing and examining DLT. On the other hand, it also attempts to present an up-to-date review and evaluation of current blockchains and their variants as constructed of four layers: the data, consensus, execution and application layers.
Piotr Macek, Daria Dziubałtowska, Bartosz Kuśmierz, Radosław Michalski
Every distributed system in which there is no central coordinator requires some form of agreement on its state and other aspects. Depending on the setting, there is also some possibility of additional risks, such as malicious or failing nodes, and this also contributes to the challenge of reaching consensus. In this work we investigate the problem of metastability in peer-to-peer networks that are used for distributed ledgers, especially focusing on cellular automata protocol with majority dynamics. Our results demonstrate that networks using this protocol do not reach consensus easily, even in the absence of an adversary. As a remedy for that, we propose a set of fixtures significantly increasing the probability of reaching network agreement that in best cases allow for achieving it two orders of magnitude more often compared to the basic cellular automata approach.
Due to the widespread use of smart contracts, Ethereum has become the second-largest blockchain platform after Bitcoin. Many different types of Ethereum accounts (ICO, Mining, Gambling, etc.) also have quite active trading activities on Ethereum. Studying the transaction records of these specific Ethereum accounts is very important for understanding their particular transaction characteristics, and further labeling the pseudonymous accounts. However, traditional methods are generally based on static and global transaction networks to conduct research, ignoring useful information about dynamic changes. Our work chooses six kinds of important account labels, and builds ego networks for each kind of Ethereum account. We focus on the interaction between the target node and neighbor nodes with temporal analysis. Experiments show that there is a significant difference between various types of accounts in terms of several network features, helping us better understand their transaction patterns. To the best of our knowledge, this is the first work to analyze the dynamic characteristics of Ethereum labeled accounts from the perspective of transaction ego networks.
The lightning network (LN) is a layer-two solution in Bitcoin for support scalability. LN uses offchain micropayment channels to scale the blockchain's capability to perform instant transactions without a global block confirmation process. However, micropayment scalability in a large LN is still limited by its relatively large searching space for a suitable route. Liquidation for small nodes still remains major challenges for the LN as the amount of transactions along a channel is predetermined by the channel capacity defined by two end nodes of the channel. In this paper, we introduce the notion of supernodes and the corresponding supernodes-based pooling to address these challenges. In order to meet the high adaptivity and low maintenance cost in the dynamic LN where users join and leave, supernodes are constructed locally to avoid global information or label propagation. Each supernode, together with a subset of (non-supernodes) neighbors, forms a supernode-based pool. These pools constitute a partition of the LN. Additionally, supernodes are self-connected. Micropayment scalability is supported through node set reduction as only supernodes are involved in searching and in payment with other supernodes. Liquidation is enhanced through pooling to redistribute funds within a pool to external channels of its supernode. Extensive simulations using LN simulator CLoTH have been conducted to validate the improvement in routing scalability and liquidation of the proposed architecture under different settings.
A major concern of blockchain systems is to scale up their throughput. Many improvements and novel consensus protocols have been proposed to address this issue, but they are intrinsically limited by the message synchronization latency of the underlying peer-to-peer (P2P) network. Most existing implementations of blockchain systems are based on the unstructured random overlay disseminating networks, which often results in a heavy-tailed delivery latency distribution, impairing the decentralization property of the blockchain system. To overcome these constraints, this research proposes Urocissa, a structured overlay protocol to reduce the delivery latency and to improve steadiness for blockchain systems. By exploiting the unique characteristics of blockchain traffic and network heterogeneity, the protocol maintains multiple minimum latency broadcasting trees in a distributed way, whereby each node communicates with its neighbors and makes decisions sovereignly to balance relaying tasks among participants. Experiments show that the proposed protocol significantly reduces block delivery and confirmation latency compared to the conventional blockchain delivery network protocols.
Andrew Cullen, Lianna Zhao, Luigi Vigneri, Robert Shorten
An outstanding problem in the design of distributed ledgers concerns policies that govern the manner in which users interact with the network. Network usability is crucial to the mainstream adoption of distributed ledgers, particularly for enterprise applications in which most users do not wish to operate full node. For DAG-based ledgers such as IOTA, we propose a user-node interaction mechanism that is designed to ensure the risk of a user experiencing a poor quality of service is low. Our mechanism involves users selecting nodes to issue their transactions to the ledger based on quality of service indicators advertised by the nodes. Simulation results are presented to illustrate the efficacy of the proposed policies.
This paper examines the effects of inherent risks in the emerging technology of non-fungible tokens and proposes an actionable set of solutions for stakeholders in this ecosystem and observers. Web3 and NFTs are a fast-growing 300 billion dollar economy with some clear, highly publicized harms that came to light recently. We set out to explore the risks to understand their nature and scope, and if we could find ways to mitigate them. In due course of investigation, we recap the background of the evolution of the web from a client-server model to the rise of Web2.0 tech giants in the early 2000s. We contrast how the Web3 movement is trying to re-establish the independent style of the early web. In our research we discover a primary set of risks and harms relevant to the ecosystem, and classify them into a simple taxonomy while addressing their mitigations with solutions. We arrive at a set of solutions that are a combination of processes to be adopted, and technological changes or improvements to be incorporated into the ecosystem, to implement risk mitigations. By linking mitigations to individual risks, we are confident our recommendations will improve the security maturity of the growing Web3 ecosystem. We are not endorsing, or recommending specifically any particular product or service in our solution set. Nor are we compensated or influenced in any way by these companies to list these products in our research. The evaluations of products in our research have to simply be viewed as suggested improvements.
Distributed ledger technology (DLT) offers new and unique advantages for information systems, but some of its features are not a good fit for many applications. We review the properties of DLT and propose a new type of architecture for DLT based on main-sub ledger. Our scheme pays more attention to data privacy, effectively relieves the pressure of data storage for nodes, thereby improves data handling capability.
This paper proposes a solution for validating an End-to-End service chain built by multiple actors that may not trust each other. We notably introduce a “data layer” powered by a Distributed Ledger (DL, a.k.a “Blockchain”) using a Directed Acyclic Graph (DAG). This component will enable all players involved in a network service chain to share trusted and secure performance data, whilst avoiding the participation of trusted third parties. We consider as a driving use case a scenario where resource providers and resource consumers (a.k.a “prosumers”) interact together to build on-demand network services. We thus focus on a Cloud-based Radio Access Network scenario and anticipate network disaggregation, allowing the infrastructure to be shared between multiple providers. We show through simulation that the usage of a DAG-based ledger will make the proposed data layer scalable despite the amount of performance data required for monitoring.