Krzysztof Gogol, Benjamin Kraner, Malte Schlosser, Tao Yan · 6 authors
Liquid staking has become the largest category of decentralized finance protocols in terms of total value locked. However, few studies exist on its implementation designs or underlying risks. The liquid staking protocols allow for earning staking rewards without the disadvantage of locking the capital at the validators. Yet, they are seen by some as a threat to the Proof-of-Stake blockchain security. This paper is the first work that classifies liquid staking implementations. It analyzes the historical performance of major liquid staking tokens in comparison to the traditional staking for the largest Proof-of-Stake blockchains. Furthermore, the research investigates the impact of centralization, maximum extractable value and the migration of Ethereum from Proof-of-Work to Proof-of-Stake on the tokens' performance. Examining the tracking error of the liquid stacking providers to the staking rewards shows that they are persistent and cannot be explained by macro-variables of the currency, such as the variance or return.
Iván Abellán Álvarez, Vincent Gramlich, Johannes Sedlmeir
With the increasing adoption of decentralized information systems based on a variety of permissionless blockchain networks, the choice of consensus mechanism is at the core of many controversial discussions. Ethereum's recent transition from proof-of-work (PoW) to proof-of-stake (PoS)-based consensus has further fueled the debate on which mechanism is more favorable. While the aspects of energy consumption and degree of (de-)centralization are often emphasized in the public discourse, seminal research has also shed light on the formal security aspects of both approaches individually. However, related work has not yet comprehensively structured the knowledge about the security properties of PoW and PoS. Rather, it has focused on in-depth analyses of specific protocols or high-level comparative reviews covering a broad range of consensus mechanisms. To fill this gap and unravel the commonalities and discrepancies between the formal security properties of PoW- and PoS-based consensus, we conduct a systematic literature review over 26 research articles. Our findings indicate that PoW-based consensus with the longest chain rule provides the strongest formal security guarantees. Nonetheless, PoS can achieve similar guarantees when addressing its more pronounced tradeoff between safety and liveness through hybrid approaches.
Vojislav B. Mišić, Soosan Naderi Mighan, Jelena Mišić, Xiaolin Chang
Proof-of-Stake (PoS) protocols are widely accepted as a viable substitute for the Proof-of-Work-based consensus, which is why recent blockchain-based cryptocurrencies and applications, most notably Ethereum 2.0, are using some variant of PoS as the basis for the consensus protocol. However, the implementation of PoS protocols in Ethereum 2.0 are not without its share of problems and vulnerabilities, especially with respect to the malicious behavior of validator nodes. In this paper, we first review the basic tenets of PoS protocols. We then discuss some of the recently described attacks on the Ethereum 2.0 consensus, and we also show that some of the design rationales adopted in PoS implementation—the decentralization of the voting process in particular—have, in actuality, enabled attacks that can be launched at a very low cost to the attacker. We also propose simple remedies that can reduce or eliminate the impact of those attacks and can evaluate the performance of the Ethereum 2.0 consensus when these remedies are applied.
Blockchain technology is a decentralized, distributed ledger technology that allows digital information to be recorded, stored and shared securely and transparently. It is achieved through a network of computers that verify and record transactions, using cryptographic algorithms to ensure the integrity and security of the data. Blockchain technology was created in 2008 by Satoshi Nakamoto to record and verify transactions without a central authority. In 2014, Ethereum was introduced, allowing developers to create and deploy decentralized applications on top of the blockchain. Since then, blockchain technology has evolved and found new use cases in industries such as finance, supply chain management, healthcare, and voting systems. There are four types of blockchain: including public, private, hybrid, and consortium blockchains. Public blockchains are open networks that anyone can join and participate in, while private blockchains are closed networks that are only accessible to a select group of people or organizations. Hybrid blockchains combine the features of two or more types of blockchains. Consortium blockchains are a hybrid of public and private blockchains. The choice of which type to use will depend on the specific needs and goals of the project or application. Blockchain technology has a bright future ahead of it, with many of possible uses and room for innovation. Increased adoption, interoperability, scaling, decentralized finance, and environmental sustainability are a few of them. Ultimately, the development of new applications and use cases, growing adoption, and ongoing innovation will likely define the future of blockchain technology.
Fueled by the growing popularity of proof-of-stake blockchains, there has been increasing interest and progress in permissioned consensus protocols, which could provide a simpler alternative to existing protocols, such as Paxos and PBFT. In particular, the recently proposed Streamlet protocol provides a surprisingly simple and streamlined consensus approach, which crystallizes years of research in simplifying and improving classical consensus protocols. While the simplicity of Streamlet is a major accomplishment, the protocol lacks certain practical features, such as supporting a stable block proposer, and it makes strong assumptions, such as synchronized clocks and the implicit echoing of all messages. Most importantly, it requires sending $O(N^3)$ messages per block in a network of $N$ nodes, which poses a significant challenge to its application in larger networks. To address these limitations, we introduce Pipelet, a practical streamlined consensus protocol. Pipelet employs the same block-finalization rule as Streamlet, but attains state-of-the-art performance in terms of communication complexity and provides features that are crucial for practical applications, such as clock synchronization and stable block proposers. At the same time, Pipelet retains the simplicity of Streamlet, which presents significant practical advantages, such as ease of implementation and verification.
We are introducing a novel consensus protocol for blockchain, called Proof of Stake and Activity (PoSA) which can augment the traditional Proof of Stake methods by integrating a unique Proof of Activity system. PoSA offers a compelling economic model that promotes decentralization by rewarding validators based on their staked capital and also the business value they contribute to the chain. This protocol has been implemented already into a fully-fledged blockchain platform called Bahamut (www.bahamut.io) which is designed specifically for iGaming and other markets, is actively operating in Emirati and boasts hundreds of thousands of active users.
Muhammad Ikram Mohd Rashid, Imran Rasool, Nazir Ahmad Zafar, Hamra Afzaal
New to the Ethereum platform with version 2.0 is the Beacon chain. Validator status, attestation information, and many more are maintained via the proof-of-stake (PoS) consensus protocol, which is relied upon. The Ethereum 2.0 beacon chain relies on the validation and completion of checkpoints to validate and finish all the blocks associated with those checkpoints. By formally verifying it using the SPIN model checker, this research tackles the issue of the dependability and security of the Beacon Chain’s justification and finalization operations. Due of its novelty (launched in 2020), there is little any literature on the subject. Additionally, no previous study has formally verified the beacon chain using the SPIN model checker. The study makes use of PROMELA, a formal specification language, to formally outline the reasoning and finalization method of the Ethereum 2.0 Beacon Chain. Utilizing the SPIN Model Checker, a program graph is generated for this procedure, which formulaically expresses safety features via the use of linear temporal logic (LTL). To make sure everything is in order, we run the SPIN model checker with the program graph and LTL formulae as inputs to see whether the program graph satisfies the properties. This is the formal verification process.
Cross-chain dApps (decentralized applications) are enabled by smart contracts interoperability on heterogeneous blockchains. Previous work on cross-chain smart contract invocation has limitations in satisfying compatibility, atomicity, and security simultaneously. To address these limitations, this paper presents a new systemAtomCIthat enables atomic cross-chain smart contract invocations spanning heterogeneous blockchains. Our systemAtomCIis enabled by a synergy of three proposed components: (1) Smart Contract Design Patterns, (2) Cross-chain Expression Protocol, and (3) Cross-chain Service Community, which is based on smart contracts and provides honest and auditable cross-chain service. We implement a prototype ofAtomCIand analyze its security. Extensive results show thatAtomCIimposes reasonable cost and latency of end-to-end cross-chain smart contract invocations, and has less impact of locks on the contract availability. The analysis and evaluation demonstrate thatAtomCIis a promising approach to enable atomic smart contract invocations spanning heterogeneous blockchains.
In recent years, decentralized applications (dApps) built on blockchain platforms such as Ethereum and coded in languages such as Solidity, have gained attention for their potential to disrupt traditional centralized systems. Despite their rapid adoption, limited research has been conducted to understand the underlying code structure of these applications. In particular, each dApp is composed of multiple smart contracts, each containing a number of functions that can be called to trigger a specific event, e.g., a token transfer. In this paper, we reconstruct and analyse the network of contracts and functions calls within the dApp, which is helpful to unveil vulnerabilities that can be exploited by malicious attackers. We show how decentralization is architecturally implemented, identifying common development patterns and anomalies that could influence the system's robustness and efficiency. We find a consistent network structure characterized by modular, self-sufficient contracts and a complex web of function interactions, indicating common coding practices across the blockchain community. Critically, a small number of key functions within each dApp play a pivotal role in maintaining network connectivity, making them potential targets for cyber attacks and highlighting the need for robust security measures.
Blockchain makes heavy use ofcryptographic hashingto achieve integrity and consensus in a peer-to-peer network, but hashing causes some inefficiencies. For example, blockchain stores data with their hash digest as a key in the database, so the blockchain always reads and writes data in arandomorder. This can affect blockchain performance, especially for account-based blockchains such as Ethereum, which must maintain a huge, hash-based data structure for accounts, called thestate trie. Also, Proof-of-Work (PoW) consensus algorithm requires the miners to find a nonce that makes the block hash lower than a difficulty threshold, but ASICs with parallel hashing have made PoW use a large dataset such as theEthashDAG for memory-hardness and ASIC-resistance. Unfortunately, verification of the nonce is not easy for many light clients, which cannot deal with the overhead caused by the dataset. This paper proposes a novel PoW mining algorithm namedTrie-Hashimototo address these issues. Trie-Hashimoto adds a nonce field in a state trie node. It then makes the miners find a nonce of every newly-created trie node for a new block such that each node has a hash digest whoseprefixis equal to the block number. This can accelerate the database performance by storing the trie nodes in asequentialorder. The way for Trie-Hashimoto to achieve memory-hardness is also different. It uses the block headers that any client must maintain, obviating a separate dataset. Furthermore, it allows partial verification using a few Merkle proofs of accounts, so that a client with minimal resources or even a smart contract in another interoperable blockchain can verify a block with a high probability. Finally, Trie-Hashimoto discourages big mining pools by increasing the network overhead among the miners. Our experiment on the Geth client with 500K blocks and 100M accounts shows that Trie-Hashimoto improves the transaction execution time tangibly, reducing the full synchronization time by half. It also shows that Trie-Hashimoto has enough memory-hardness as Ethash. Lastly, a Trie-Hashimoto mining pool should exchange messages highly frequently, proportional to the total number of miners.
Fernando Román-García, Juan Hernández‐Serrano, Óscar Esparza
This article introduces the Non-Repudiable Data Exchange (NoRDEx) protocol, designed to ensure non-repudiation in data exchanges. Unlike traditional non-repudiation and fair exchange protocols, NoRDEx can be considered decentralized as it eliminates the need for a centralized Trusted Third Party (TTP) by using a Distributed Ledger Technology (DLT) to store cryptographic proofs without revealing the exchanged message. NoRDEx is an optimistic non-repudiation protocol, as it only uses the DLT in case of a dispute. The protocol has been implemented and tested in real-world environments, with performance assessments covering cost, overhead, and execution time. A formal security analysis using the Syverson Van Oorschot (SVO) logical model demonstrates NoRDEx’s ability to resolve disputes securely.
D. Sumathi, T. Poongodi, Ramasamy Lakshmana Kumar, Balamurugan Balusamy
Consensus algorithms play the significant role in any blockchain system since it has to prove its performance and security. Hence, there is a need to identify the curbs of various consensus algorithms. The features of several kinds of blockchain systems rely on the consensus techniques. A detailed analysis of the algorithms has been done which might throw the limelight to researchers to devise a novel consensus algorithm. Issues due to the adoption of the consensus and solutions to overcome have been discussed. The main contribution of this work is to provide a deep insight into the consensus algorithms and its properties. There are several metrics considerations for evaluating the performance of consensus protocols. Additionally, the energy consumption of Bitcoin and Ethereum of several countries has also been presented in this work. Finally, the most commonly used consensus algorithm has been analysed along with its variant information.
This document serves as a reference for the architectural design and implementation of a secure decentralized data sharing framework. The framework leverages Distributed Ledger Technology (DLT) to ensure data integrity and immutability, while incorporating multi-party computation, fully homomorphic encryption and Trusted Execution Environments for privacy preservation. The document also explores the GAIA-X framework to further strengthen data security within the decentralized environment.
Public blockchains, such as Ethereum, rely on decentralized networks of peer-to-peer nodes known as validators or miners to verify all transactions and create new valid blocks. These validators can prioritize transactions, primarily based on high gas fees, allowing miners to maximize their block rewards, a concept referred to as maximal extractable value (MEV). However, MEV is vulnerable to front-running, back-running, and sandwich attacks (FBSAs), and is exploited by malicious nodes and bots to manipulate users’ valuable transactions. These malicious activities adversely impact the Blockchain’s scalability, transparency, and security. Flashbots, as one of the solutions, introduces centralization since all nodes have to forward all blocks to the central node. To address these issues, we have designed a new Blockchain transaction ordering protocol called Quantum Random Transaction Ordering Protocol (Q-RTOP). The proposed protocol operates on top of the existing Blockchain transaction ordering mechanism. However, instead of allowing validators to select transactions based on high gas fees, decentralized nodes running Q-RTOP securely randomize all transactions and then forward them to the validators, which proceed with the block validation without any change. Our protocol primarily focuses on randomizing transactions before being processed by the validators by utilizing a quantum random generator as a secure source of randomness. The final results demonstrated that Q-RTOP effectively secured user transactions and randomized 8192 transactions within 25 milliseconds.
Due to the promising scalability property, sharding technology has gained widespread attention. It improves the transaction throughput of blockchain systems but also introduces cross-shard transactions. Current two-phase commit (2PC) protocols process different cross-shard transactions sequentially, resulting in significant system overhead and low throughput. Besides, current sharding blockchains rely on Byzantine fault tolerance (BFT) as a black box, lacking specific designs to efficiently handle cross-shard proposals. Moreover, cross-shard communication complexity is high, and transaction processing parallelism is low. In this paper, we first propose P-2PC, a general framework to process cross-shard transactions of different phases in a pipelined way, suitable for most sharding blockchains. Further, we design Cherubim with improved quadruple 2PC, 4P-2PC. By combining P-2PC with an intra-shard pipelined BFT, 4P-2PC achieves both intra-shard and cross-shard pipelined processing. Combined with a newly designed batch processing method, each shard processes 4 transaction batches simultaneously through 1 round of calculation and communication, compared to 4 rounds in previous work. In particular, Cherubim seamlessly integrates a multi-signature algorithm supporting further aggregation, reducing communication complexity. Furthermore, we evaluate our work through theoretical analysis and implementation, proving that Cherubim has a communication complexity linear to the node number. We also propose horizontal and vertical consensus parallelism degrees to evaluate the parallelism ability. Compared to the state-of-the-art solutions, the evaluation demonstrates that Cherubim achieves a transaction throughput improvement of at least 2.28×.
Over the past decade, decentralized applications (dApps) have emerged as a disruptive force, reshaping the landscape of digital innovation and redefining traditional paradigms of application development and deployment. This review explores the progression, challenges, and future prospects of dApps, providing insights into their evolution and impact on various industries. The decade in review reflects a remarkable journey of dApps, from their nascent stages to becoming a cornerstone of the decentralized ecosystem. Initially rooted in the blockchain revolution ignited by Bitcoin's emergence, dApps have evolved beyond cryptocurrency applications to encompass a wide array of use cases across finance, supply chain management, healthcare, governance, and beyond. This review delves into the key milestones and advancements that have propelled the growth of dApps, highlighting their transformative potential in enabling transparent, secure, and trustless interactions in decentralized environments. However, alongside their progression, dApps have encountered significant challenges that have shaped their trajectory and adoption. Scalability, interoperability, regulatory compliance, data privacy, and security concerns have posed formidable obstacles to their widespread adoption and usability. This review provides a nuanced understanding of these challenges and their implications for the future development and adoption of dApps, underscoring the need for innovative solutions and collaborative efforts to address these hurdles. Looking ahead, the future of dApps holds immense promise and opportunity. Emerging technologies such as blockchain scalability solutions, interoperability protocols, privacy-preserving techniques, and decentralized finance (DeFi) are poised to drive the next wave of innovation in the dApp ecosystem. Moreover, advancements in artificial intelligence, Internet of Things, and decentralized governance models are expected to further enhance the functionality, usability, and impact of dApps across industries and domains. In conclusion, as we reflect on the past decade of dApp development and evolution, it is evident that dApps have transitioned from experimental prototypes to disruptive technologies with profound implications for the future of digital innovation. By addressing key challenges and embracing emerging opportunities, the dAppecosystem is poised to continue its upward trajectory, ushering in a new era of decentralized, transparent, and inclusive digital applications.
Exponential growth of the space industry avails unprecedented opportunities to establish a marketplace of satellite infrastructure services. However, security and resource constraints pose critical challenges to implementing the exchange of services such as storage, compute or even arm-based manipulation. We propose a fully distributed architecture that will facilitate resilient, trustless interactions to enable space infrastructure as a service and applications such as in-space servicing. The distributed architecture engages Distributed Ledger Technology (DLT) such as blockchains and directed acyclic graphs to designate and enforce security policy via smart contracts between multiple parties across payloads owned or operated by different service providers on the same satellite bus or across a constellation. This work presents a zero-trust space infrastructure as a service architecture and examines how the architecture addresses critical challenges such as consensus and cyber resilience to facilitate a space services marketplace.