Blockchain Papers

Sucharita Jayanti, Maurice Herlihy

No abstract is available for this record.

Fidel T Rorimpandey, Neorafa A Zulkarnaen, Aditya Kurniawan, Chrisando Ryan Pardomuan Siahaan

This paper is focused on Proof of Authority (POA) consensus mechanism in blockchain-based e-voting for student body elections. Exploring a unique take on consensus rather than using the popular consensus like Proof of Stake or Proof of Work. POA, with its reliance on trusted validators, offers a promising solution for low-cost, secure, and transparent voting. We developed a prototype POA-based e-voting model designed for student body elections and get results of its effectiveness in terms of reliability. Our findings indicate that POA helps the security and accessibility of e-voting, making it suitable for voting validity.

Alon Benhaim, Brett Hemenway, Gerry Tsoukalas

In decentralized governance, quadratic voting (QV)—where the cost of acquiring voting power is convex—optimally aggregates voter preferences, outperforming simpler linear voting (LV) mechanisms when voters have complete information. But what if they do not? We show that uncertainty not only breaks QV optimality but can also cause it to underperform LV. Intuitively, this is because cost convexity can disincentivize better-informed voters from adequately conveying their private information. The optimal mechanism varies with the distribution of stakes and information among voters, implying that QV’s known advantages in preference aggregation do not readily extend to common-value information aggregation settings. This paper was accepted by Will Cong for the Special Issue on the Digital Finance. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2024.08469 .

Michael Mann

Purpose: This paper formulates a new theoretical framework to address the principal-agent problem in representative democracy through a dynamic voting mechanism. Based on Rousseau’s concept of the general will and contemporary analyses of corporate influence in politics, I build a rigorous mathematical model that enables voters to maintain continuous oversight over their elected representatives. Design/methodology/approach: I developed a rigorous mathematical model integrating an anonymous blockchain-based voting system. This system allows voters or voter groups to continuously monitor their representatives while preserving their privacy through zero-knowledge proofs. The model uses game theory and extends Condorcet’s Jury Theorem to analyze voter behavior under dynamic oversight conditions. Findings: The results show that such a system can encourage a more responsible form of representative democracy while maintaining electoral stability. Detailed implementation architectures show that the model is not only theoretically rigorous but also practically feasible through advanced cryptographic tools. Practical implications: The proposed architecture enables real-time voter engagement without compromising privacy, providing a blueprint for secure, transparent, and scalable voting systems applicable in modern democratic systems. Originality/value: This research combines political theory, cryptographic system design, and social choice theory to propose a new paradigm for democratic governance. The integration of zero-knowledge proofs with dynamic feedback mechanisms offers a scalable solution to fundamental challenges of voter privacy and election integrity, with far-reaching implications for democratic theory and its practical application.

Vivek Pandey, Sahil Ambekar, R.Sunil Varma, Kunal Nandiwadekar · 6 authors

India’s democracy allows citizens to make representatives accountable during elections, but no immediate mechanism enables them to remove representatives prior to a particular term ending if representatives are seriously underperforming or categorized as nonrepresentative. The Right to Recall (RTR) E-Voting System utilizing Blockchain Technology addresses this lack of an immediate mechanism, providing a safe, transparent, and performance-based recall mechanism that decades of political science literature have deemed necessary. Recalling representatives for statutory reasons is often a slow bureaucratic process that is influenced by political bias when it is allowed at all. Blockchain’s decentralized, immutable, and secure nature helps guarantee that votes are tamper-proof, verifiable, and transparent. The system employs smart contracts to automate much of the recall processes while reducing human intervention and our potential for manipulation. Existing cryptographic techniques such as Elliptic Curve Cryptography (ECC) and Zero-Knowledge Proofs (ZKP) guarantee a high level of security and voter anonymity in our proposed system. This paper describes the design, architecture, implementation challenges, and the impact of a blockchain technology-enabled RTR voting platform in the context of India.

Roman Serebriakov, Iryna Klymenkо

The article examines the problem of balancing security and flexibility in decision-making mechanisms within decentralized autonomous organizations (DAOs), which operate without centralized control through the use of smart contracts. To this end, two main voting models employed in DAOs are analyzed: the conjunctive model, which requires unanimous approval of a proposal by all participant groups, and the disjunctive model, where approval from a single group is sufficient. Both models have significant advantages and drawbacks: the former ensures a high level of security and protection of all parties’ interests but considerably slows down the decision-making process, while the latter provides speed and scalability but introduces risks of centralized influence. In response to these challenges, a hybrid voting model is proposed, in which the type of logic is determined by the nature of the proposal. Specifically, critical changes, such as updates to governance rules or quorum parameters, must involve all groups, whereas routine operational matters can be decided through a simplified disjunctive procedure. The implemented smart contract architecture supports both mechanisms and enables DAOs to dynamically adjust quorum thresholds through separate governance proposals. To evaluate the effectiveness of the model, a simulation of 1,000 voting processes was conducted under four different scenarios of participant activity: balanced, one-sided, and low overall participation. The results showed a reduction in the probability of deadlock situations and an increase in the share of successful votes when hybrid logic was applied, particularly under conditions of low or asymmetric participation. In addition, special attention was given to gas cost optimization: the disjunctive approach allows vote counting to be stopped once a quorum is reached by one group, thus reducing overall computational expenses. Therefore, the proposed solution appears promising for both financial DAOs and decentralized infrastructures, particularly the Internet of Things, where speed, scalability, and secure coordination are especially important.

G. Ramesh, Utkarsh Anand, P. B. Edwin Prabhakar, Akhilesh Pahade · 5 authors

Depending on past results, data manipulation, centralized control, and fraud could be problems with either digital or hand-voting systems. In a democratic state, everyone lacks honest and safe voting systems. Here, we present a fresh consensus approach for Proof of Eligibility and Identity (PoEI). The intended users of this system are distributed voting applications emphasizing security and forward-looking needs. This approach guarantees eligibility and enables anonymous voting by combining a custom permissioned blockchain with a zero-knowledge proof (ZKP)- based identity verification system. Furthermore, the approach guarantees the preservation of eligibility. While smart contracts manage voter registration, ballot submission, and automated tallying, cryptographic audit trails are responsible for increasing operational transparency. A virtual municipal election, which included 10,000 candidates, was conducted to confirm the approach. The election was an apparent success, given that there was no space for repeated voting and a transaction latency of less than a second. These findings suggest that the proposed model can replace current blockchain consensus systems, providing verifiability, tamper-proofness, and scalability. Ensuring its security, this work prepares for future electoral modernization grounded on distributed technologies.

Pranav Garimidi, Michael Neuder, Tim Roughgarden

This letter shows how Tullock contests—a class of all-pay auctions with proportional allocation rules—can be used to model and reason about several blockchain settings. We review the fundamentals of Tullock contests and their connections to potential games. We discuss why certain properties of Tullock contests, such as sybil-proofness and compatibility with "decentralization," have made them common in blockchain applications. We illustrate how Tullock contests naturally arise in proof-of-work and proof-of-stake blockchain protocols, and are an attractive design for emerging marketplaces for blockspace and succinct proofs.

Massimo Bartoletti, E. Lipparini

Lending protocols are one of the main applications of Decentralized Finance (DeFi), enabling crypto-assets loan markets with a total value estimated in the tens of billions of dollars. Unlike traditional lending systems, these protocols operate without relying on trusted authorities or off-chain enforcement mechanisms. To achieve key economic goals such as stability of the loan market, they devise instead trustless on-chain mechanisms, such as rewarding liquidators who repay the loans of under-collateralized borrowers by awarding them part of the borrower's collateral. The complexity of these incentive mechanisms, combined with their entanglement in low-level implementation details, makes it challenging to precisely assess the structural and economic properties of lending protocols, as well as to analyze user strategies and attacks. Crucially, since participation is open to anyone, any weaknesses in the incentive mechanism may give rise to unintended emergent behaviours, or even enable adversarial strategies aimed at making profits to the detriment of legit users, or at undermining the stability of the protocol. In this work, we propose a formal model of lending protocols that captures the essential features of mainstream platforms, enabling us to identify and prove key properties related to their economic and strategic dynamics.

Arthi Ammu

ABSTRACT: The integrity of democratic voting systems is increasingly threatened by security vulnerabilities, lack of transparency, and trust deficits, making electoral processes susceptible to manipulation. To address these concerns, Binance Smart Chain (BSC) introduces a blockchain-powered voting framework that leverages the Proof of Staked Authority (PoSA) consensus protocol to enhance security and decentralization. To further fortify the system, ResNet-101, a deep learning-based convolutional neural network (CNN), is integrated for facial recognition authentication, ensuring voter legitimacy and eliminating identity fraud. Additionally, one-time password (OTP) authentication and live location tracking strengthen the system against unauthorized access and proxy voting. By combining blockchain technology, biometric verification, and AI-driven facial authentication, BSC establishes a highly secure, transparent, and tamper-proof voting system. This approach aims to restore public trust in electoral processes, setting a new benchmark for secure and verifiable digital voting systems in democratic governance. Keywords: Blockchain, PoSA, ResNet-101, Facial Recognition, OTP, Voting Security, Transparency, Authentication.

Jeff Strnad

In this article, we propose a new form of decentralized autonomous organization (DAO) governance that uses a sequential auction mechanism to overcome the entrenched control issues that have emerged for DAOs by creating a regime of temporary contestable control. The mechanism avoids potential public choice problems inherent in voting approaches but at the same time provides a vehicle that can enhance and secure value that inheres to DAO voting and other DAO non-market governance procedures. It is robust to empty voting and is code feasible. The mechanism not only facilitates the ability of DAOs to meet their normative and operational goals in the face of diverse regulatory approaches, but also strengthens the case for creating a less burdensome but at least equally effective regulatory regime for DAOs that employ the mechanism. Designed to shift control to the party with the most promising business plan, at the same time, it deters value destruction by control parties, maximizes social surplus, and distributes that surplus in a way that tends to promote investment by other parties both at start up and on an ongoing basis.

Jeff Strnad

We develop and apply epistemic tests to various decentralized governance methods as well as to study the impact of participation. These tests probe the ability to reach a correct outcome when there is one. We find that partial abstention is a strong governance method from an epistemic standpoint compared to alternatives such as various forms of ``transfer delegation" in which voters explicitly transfer some or all of their voting rights to others. We make a stronger case for multi-step transfer delegation than is present in previous work but also demonstrate that transfer delegation has inherent epistemic weaknesses. We show that enhanced direct participation, voters exercising their own voting rights, can have a variety of epistemic impacts, some very negative. We identify governance conditions under which additional direct participation is guaranteed to do no epistemic harm and is likely to increase the probability of making correct decisions. In light of the epistemic challenges of voting-based decentralized governance, we consider the possible supplementary use of prediction markets, auctions, and AI agents to improve outcomes. All these results are significant because epistemic performance matters if entities such as DAOs (decentralized autonomous organizations) wish to compete with organizations that are more centralized.

Lukas Weidener, Fabio Laredo, K. I. Pavan Kumar, Karlin Compton

This study presents a systematic scoping review of delegated voting (DV) in decentralized autonomous organizations (DAOs), focusing on its governance implications, implementation forms, and challenges. DV refers to a mechanism through which token holders transfer their voting rights to other participants, often called delegates, who vote on their behalf. While DV is often adopted to address low participation and mitigate the cognitive burden of direct involvement, the existing literature highlights its potential to exacerbate centralization, particularly when whales or influential networks are disproportionate. This creates tension between the intended efficiency gains of the delegation and the unintended concentration of power. Various implementation models, including off-chain platforms (e.g., Snapshot), hybrid governance architectures, and token-based delegation systems, exhibit distinct trade-offs in transparency, cost, and adaptability. Although innovations such as quadratic voting, weighted delegation constraints, and reputation-based governance show promise for improving fairness and accountability, they also face vulnerabilities, such as gaming, collusion, and high implementation complexity. To explore the diverse approaches to DV, this review organizes and synthesizes key findings from recent scholarly publications examining its implementation, risks, and governance outcomes. Synthesizing insights from 13 publications, this review identifies key governance trade-offs, implementation patterns, and risks associated with DV. It also outlines future research directions, including multi-tiered governance structures and decision-support mechanisms, to guide more inclusive and context-aware DAO governance.

Liangde Tao, Lin Chen, Lei Xu, Weidong Shi · 6 authors

No abstract is available for this record.

Pankaj Gugnani, Rahul Singh Dhakad, Debanjan Sadhya, W. Wilfred Godfrey

The Proof of Stake (PoS) consensus protocol plays a fundamental role in blockchain technology, where the validation of new blocks is conducted through voting by designated nodes called validators. In this system, the selection of the next block leader is influenced by the amount of stake held by participants. A penalty mechanism is in place to deter fraudulent actions. If a participant behaves dishonestly, their stake is at risk, with full penalties imposed if 51% or more of the validators vote against the leader. This paper investigates an incentivization and penalization mechanism based on the range of validator votes submitted against the leader. Our proposed model adjusts rewards and penalties dynamically, depending on both the leader’s reputation and the validator’s voting range. Leaders who demonstrate consistent honesty are rewarded, while malicious behaviors are penalized in proportion to the validator’s voting range. We simulate the effects of various system parameters, such as the reward factor (α), ranging from 0.01 to 0.1, and the scaling factor (β), determined by the total number of validators. In the simulations, increasing the parameter α accelerates reputation growth and rewards, with Gen-4 leaders achieving the highest rewards at α = 0.1. In contrast, lower α values (i.e., 0.01) ensure system stability but slower progression. The penalty mechanism allows for dynamic penalties as validators increase, with 1000 validators imposing substantial penalties beyond a 0.5 vote ratio. The proposed penalty model, hence, offers smoother scaling than the conventional 51% threshold.

Amin Mohazab

No abstract is available for this record.

Sveinn Ólafsson

No abstract is available for this record.

James Darrell Duffie, Chaojun Wang

With complete-information bilateral bargaining in network settings, holdup is eliminated when contracts across the network are agreed atomically (all or none) via a smart contract. Applications include over-the-counter trading, syndicated lending, multi-tranche securitizations, third-party financed purchases, and bookbuilding. Under a novel extensive-form bargaining protocol, any firm can give a “greenlight” to the terms of a contract proposed to that firm, which automatically converts those terms into a binding contract if the terms proposed to all other firms also receive greenlights. In any Perfect Bayesian Equilibrium with Markov strategies, firms immediately agree on socially efficient contracts that equalize expected gains across firms.

Rui Qin, Xiao Xue, Yong Yuan, Xiaolong Liang

In decentralized governance, existing token-based voting mechanisms employed by Decentralized Autonomous Organizations (DAOs) often suffer from centralization risks, as a small number of large token holders can dominate decision-making. While reputation-based voting has emerged as an alternative that reflects members’ historical contributions, it is also prone to ossification, where early contributors accumulate disproportionate influence over time. To address these challenges, we propose a novel hybrid dynamic voting mechanism that combines tokens and reputation in the voting power. Furthermore, we incorporate an exponential decay mechanism into the reputation component to ensure that voting power dynamically reflects recent and active participation rather than legacy status. We also utilize Gini and Nakamoto coefficients to evaluate the proposed mechanism. To validate our proposed mechanism, we design some computational experiments, and the experimental results show that the proposed hybrid mechanism achieves better fairness and decentralization, while allowing new contributors to more quickly gain meaningful influence. This work provides insights into designing adaptive, fair, and secure governance mechanisms for DAOs.

Roozbeh Sarenche, Alireza Aghabagherloo, Svetla Nikova⋆, Bart Preneel

The security of Bitcoin protocols is deeply dependent on the incentives provided to miners, which come from a combination of block rewards and transaction fees. As Bitcoin experiences more halving events, the protocol reward converges to zero, making transaction fees the primary source of miner rewards. This shift in Bitcoin's incentivization mechanism, which introduces volatility into block rewards, leads to the emergence of new security threats or intensifies existing ones. Previous security analyses of Bitcoin have either considered a fixed block reward model or a highly simplified volatile model, overlooking the complexities of Bitcoin's mempool behavior. This paper presents a reinforcement learning-based tool to develop mining strategies under a more realistic volatile model. We employ the Asynchronous Advantage Actor-Critic (A3C) algorithm, which efficiently handles dynamic environments, such as the Bitcoin mempool, to derive near-optimal mining strategies when interacting with an environment that models the complexity of the Bitcoin mempool. This tool enables the analysis of adversarial mining strategies, such as selfish mining and undercutting, both before and after difficulty adjustments, providing insights into the effects of mining attacks in both the short and long term. We revisit the Bitcoin security threshold presented in the WeRLman paper and demonstrate that the implicit predictability of valuable transaction arrivals in this model leads to an underestimation of the reported threshold. Additionally, we show that, while adversarial strategies like selfish mining under the fixed reward model incur an initial loss period of at least two weeks, the transition toward a transaction-fee era incentivizes mining pools to abandon honest mining for immediate profits. This incentive is expected to become more significant as the protocol reward approaches zero in the future.

Hans Gersbach, Kremena Valkanova

This paper introduces the Voting with Random Proposers (VRP) procedure to address the challenges of agenda manipulation in voting. In each round of VRP, a randomly selected proposer suggests an alternative that is voted on against the previous round's winner. In a framework with single-peaked preferences, we show that the VRP procedure guarantees that the Condorcet winner is implemented in a few rounds with truthful voting, and in just two rounds under sufficiently symmetric preference distributions or if status quo positions are not extreme. The results have applications for committee decisions, legislative decision-making, and the organization of citizens' assemblies and decentralized autonomous organizations.

Grigorii Melnikov, Sebastian Müller, Nikita Polyanskii, Yury Yanovich

Consensus plays a crucial role in distributed ledger systems, impacting both scalability and decentralization. Many blockchain systems use a weighted lottery based on a scarce resource such as a stake, storage, memory, or computing power to select a committee whose members drive the consensus and are responsible for adding new information to the ledger. Therefore, ensuring a robust and fair committee selection process is essential for maintaining security, efficiency, and decentralization. There are two main approaches to randomized committee selection. In one approach, each validator candidate locally checks whether they are elected to the committee and reveals their proof during the consensus phase. In contrast, in the second approach, a sortition algorithm decides a fixed-sized committee that is globally verified. This paper focuses on the latter approach, with cryptographic sortition as a method for fair committee selection that guarantees a constant committee size. Our goal is to develop deterministic guarantees that strengthen decentralization. We introduce novel methods that provide deterministic bounds on the influence of adversaries within the committee, as evidenced by numerical experiments. This approach overcomes the limitations of existing protocols that only offer probabilistic guarantees, often providing large committees that are impractical for many quorum-based applications like atomic broadcast and randomness beacon protocols.

Sam Ghosh

This chapter delves into the question of whether it is possible to build Web3 platforms without the use of dedicated tokens. The chapter is divided into three major parts. The first part discusses the roles tokens play on Web3 platforms. The second part discusses the problems tokens can bring to a Web3 platform, and the last section discusses various ways Web3 platforms can minimize the use of tokens.

Yotam Gafni, Ben Golan

Perpetual voting studies fair collective decision-making in settings where many decisions are to be made, and is a natural framework for settings such as parliaments and the running of blockchain Decentralized Autonomous Organizations (DAOs). We focus our attention on the binary case (YES/NO decisions) and \textit{individual} guarantees for each of the participating agents. We introduce a novel notion, inspired by the popular maxi-min-share (MMS) for fair allocation. The agent expects to get as many decisions as if they were to optimally partition the decisions among the agents, with an adversary deciding which of the agents decides on what bundle. We show an online algorithm that guarantees the MMS notion for $n=3$ agents, an offline algorithm for $n=4$ agents, and show that no online algorithm can guarantee the $MMS^{adapt}$ for $n\geq 7$ agents. We also show that the Maximum Nash Welfare (MNW) outcome can only guarantee $O(\frac{1}{n})$ of the MMS notion in the worst case.