With the increasing popularity of Web 3.0, tokenomics is becoming even more important as a scientific discipline. Tokenomics auditing is a new area of interest in the context of Web 3.0 whose aim is to stress test the design and structure of token economies, to ensure they are robust and safe. The importance of this area has increased considering multiple project failures and fraud that were witnessed in the recent history of the space. In this paper we present a framework to audit the tokenomics of blockchain-based projects. The auditing framework can be used by stakeholders to audit their tokens and by investors to assess the risks associated with investing in a given token. We demonstrate how this framework can be applied to assess risks and improve the structure of a token economy. We give three examples: First, an example is based on a real case study of a newly launched DeFi protocol called Algem which was the original inspiration for this protocol. Then, we perform retrospective study of Terra/Luna. Finally, we show how that framework could be used for the analysis of Ethereum 2.0. While the auditing framework is not without its shortcomings, it represents the first attempt at standardising tokenomics auditing. Therefore, this provides a foundation upon which the community will build and improve, as tokenomics auditing matures as a framework.
Named-Data Networking (NDN) is a novel network that secures network communication by fetching semantically named and secured data. All data packets in NDN are signed by producers and verified by data consumers. Therefore, it is vital to have producers' certificates available all the time. In this paper, we describe the design of CLedger, a secure distributed certificate ledger, to ensure certificate availability in NDN. CLedger logs certificate records in an immutable Directed Acyclic Graph (DAG) structure and replicates the DAG among a set of distributed loggers. We implemented CLedger using NDN's pub/sub API, and evaluated our design through an emulated deployment setting. Our initial evaluation results show that CLedger is effective, efficient, and resilient to failures.
Sharding is an effective technique to improve the scalability of blockchain. It splits nodes into multiple groups so that they can process transactions in parallel. To achieve higher parallelism and concurrency at large scales, it is desirable to maintain a large number of small shards. However, simply configuring small shards easily results in a higher fraction of malicious nodes inside shards, causing shard corruption and compromising system security. Existing sharding techniques hence demand large shards, at the expense of limited concurrency. To address this limitation, we propose CoChain: a blockchain sharding system that can securely configure small shards for enhanced concurrency. CoChain allows some shards to be corrupted. For security, each shard is monitored by multiple other shards. The latter reach a cross-shard Consensus on the Consensus results of their monitored shard. Once a corrupted shard is found, its subsequent consensus will be taken over by another shard, hence recovering the system. Via Consensus on Consensus, CoChain allows the existence of shards with more fraction of malicious nodes (<2/3) while securing the system, thus reducing the shard size safely. We implement CoChain based on Harmony and conduct extensive experiments. Compared with Harmony, CoChain achieves 35x throughput gain with 6,000+ nodes.
Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan · 6 authors
We propose a model suggesting that honest-but-rational consensus participants may play timing games, and strategically delay their block proposal to optimize MEV capture, while still ensuring the proposal's timely inclusion in the canonical chain. In this context, ensuring economic fairness among consensus participants is critical to preserving decentralization. We contend that a model grounded in honest-but-rational consensus participation provides a more accurate portrayal of behavior in economically incentivized systems such as blockchain protocols. We empirically investigate timing games on the Ethereum network and demonstrate that while timing games are worth playing, they are not currently being exploited by consensus participants. By quantifying the marginal value of time, we uncover strong evidence pointing towards their future potential, despite the limited exploitation of MEV capture observed at present.
Block chain technology, which evolved as a distributed system preserving a public ledger through consensus protocol, is showing great promise in many different contexts, including the supply chain, the financial sector, the internet of things (IoT), and so on. Important in the development of the block chain infrastructure is the use of consensus mechanisms, and one such mechanism is Byzantine Fault Tolerance (BFT) protocols. However, the vast majority of BFT protocols are inherently unable to be used in realistic settings due to their lack of dynamic features (i.e., nodes can't join or leave a functioning system) and the inability to penalize unsuccessful nodes. In this paper, we provide the Dynamic Enhanced BFT (DEBFT) protocol for handling dynamic properties and faulty node penalties. DEBFT, which is based on Honey Badger BFT, uses Dynamic Threshold Identity-based Encryption and Distributed Key Generation to facilitate consensus group changes without requiring a complete system reconfiguration. Additionally, assessment metrics are provided to evaluate consensus nodes and remove problematic nodes.
Distributed ledger technologies (DLT) usage is currently limited to a single platform as they do not have design-based interoperability capabilities. In general, it's challenging for a DLT to communicate with another one. Although several DLT solutions have been proposed and applied in specific application areas, building a general-purpose interoperability solution for any DLT remains a challenge. In previous work, we proposed a tailor-made interoperability solution between Hyperledger Fabric and Corda. This paper extends that work to enable interoperability between Hyperledger Fabric and Ethereum. The main contribution of this paper is to provide a new approach to enable interoperability between these two DLT. The approach follows a new request-response interaction model and future payments to enable the payments of services. A prototype was developed and evaluated through a case scenario, performance tests and cost analysis. Performance tests showed bottlenecks under heavy load scenarios due to Ethereum's design. Costs analysis showed that the approach is suitable for purchasing high-priced services. These promising results constitute a step forward in developing a general-purpose solution for DLT interoperability.
Andrei Constantinescu, Diana Ghinea, Lioba Heimbach, Zilin Wang · 5 authors
Traditional blockchain design gives miners or validators full control over transaction ordering, i.e., they can freely choose which transactions to include or exclude, as well as in which order. While not an issue initially, the emergence of decentralized finance has introduced new transaction order dependencies allowing parties in control of the ordering to make a profit by front-running others' transactions. In this work, we present the Decentralized Clock Network, a new approach for achieving fair transaction ordering. Users submit their transactions to the network's clocks, which run an agreement protocol that provides each transaction with a timestamp of receipt which is then used to define the transactions' order. By separating agreement from ordering, our protocol is efficient and has a simpler design compared to other available solutions. Moreover, our protocol brings to the blockchain world the paradigm of asynchronous fallback, where the algorithm operates with stronger fairness guarantees during periods of synchronous use, switching to an asynchronous mode only during times of increased network delay.
Junpei Ni, Jiang Xiao, Shijie Zhang, Bo Li · 6 authors
In most blockchain-based application scenarios, a complete application logic consists of multiple continuous transactions, in which the initiation of one transaction depends on the confirmation result of the previous one. This mandates that continuous transactions must be processed in the correct order. Unfortunately, existing chain-based blockchains fail to effectively support continuous transaction processing due to considerable latency in confirming continuous transactions. Recent studies shifted from chain-based blockchains toDirected Acyclic Graph(DAG) based blockchains, which reduced transaction confirmation latencies. However, DAG-based blockchains store transactions in an out-of-order manner that leads to unordered transaction processing. To address this challenge, we propose FLUID, a new DAG-based blockchain that supports continuous transaction processing while delivering high performance. The fundamental idea of FLUID is to design a transaction dependency tracking structure to ensure that continuous transactions can be processed in the correct order. FLUID utilizes a conflict resolution mechanism to provide instant confirmation and to support concurrent transaction processing with lower latencies. In addition, FLUID builds a checkpoint-based verification mechanism to achieve deterministic consensus on transaction processing results in the DAG. Extensive experiments demonstrate that our proposed FLUID can improve the throughput over state-of-the-art OHIE by 66% with two orders of magnitude lower latencies.
The robustness of a blockchain against the adversary is often characterized by the maximum fraction (fmax) of adversarial power that it can tolerate. While most existing blockchains can only tolerate ${f_{\max }} < \frac{1}{2}$ or lower, there are some blockchain systems that are able to tolerate a malicious majority, namely ${f_{\max }} \geq \frac{1}{2}$. A key price paid by such blockchains, however, is their large confirmation latency. This work aims to significantly reduce the confirmation latency in such blockchains, under the common case where the actual fraction f of adversarial power is relatively small. To this end, we propose a novel blockchain called Flint. Flint tolerates ${f_{\max }} \geq \frac{1}{2}$ and can give optimistic execution (i.e., fast confirmation) whenever f is relatively small. Our experiments show that the fast confirmation in Flint only takes a few minutes, as compared to several hours of confirmation latency in prior works.
Reordering blockchain transactions to manipulate markets profited hackers by hundreds of millions of dollars. Because they rely on State Machine Replication (SMR), blockchains order transactions without preventing hackers from influencing the chosen order. Some order-fair consensus protocols, like Pompē [33], order transactions before agreeing on this order. They are insufficient because a hacker can leverage the lack of triangle inequality among network latencies to observe pending transactions before issuing their own. Other DAG-based protocols, like Fino [24], use commit-reveal to obfuscate transactions, but cannot prevent reordering by a Byzantine leader.In this paper, we present Lyra, a protocol that solves this problem. The key idea is the combination of a commit-reveal protocol to obfuscate transaction payloads, and a leaderless ordered consensus protocol that predicts the order of transactions. Lyra has optimal good-case latency, prevents reordering attacks, and is scalable. Finally, it outperforms the latency of Pompē by up to 2 times and its throughput by up to 7 times on a 100-node network over 3 continents.
Blockchain governance is paramount to lead securely a large group of users towards the same decisions without disputes about the legitimacy of a blockchain instance over another. As of today, there is no efficient way of protecting this governance against an oligarchy. This paper aims to offer a new dimension to the security of blockchains by proposing a solution known as proportional governance reconfiguration. This solution mitigates the formation of an oligarchy by (1) electing governors proportionally using a proportional multi-winner election protocol (2) reconfiguring the governance automatically and periodically. The proportional governance reconfiguration relies on a Solidity based implementation making it compatible and usable in many smart contract supported blockchains. We prove our solution solves the proportional governance problem and we evaluate our solution on two smart contract supporting blockchains Ethereum-PoA and Smart Redbelly Blockchain. Our results indicate that our proportional governance can elect 200 governors within 6–12 minutes when 1000 voters from 5 continents vote for 500 candidates.
Zipline is a protocol for trustless relaying of sync committee attested block roots from an Ethereum beacon chain to the execution layer of another blockchain. These in turn can be used to prove transactions or state to support crosschain applications. Zipline's operation is similar to that of an optimistic rollup but rather than updating a blockchain state via transactions it updates a beacon chain light client state. Under normal operation Zipline is able to maintain an updated view of the beacon chain block roots with minimal execution. In the case of relayer fraud it borrows from state-of-the-art fault proving strategies to identify and revert fraudulent blocks under an honest minority assumption.
Guerraoui et al. [PODC, 2019] implement a cryptocurrency (in a permissioned setting) using an asset transfer object. Their main result implies that consensus is not necessary for implementing a cryptocurrency, since computationally speaking, an asset transfer object is equivalent to an atomic read/write register. In this work, we take a step further to understand fundamental limitations of cryptocurrency under the CAP framework. Particularly, we show that no cryptocurrency that tolerates Byzantine adversary works in a partitioned network. We point out future directions that can circumvent the impossibility.
Martijn van Meerten, Burcu Kulahcioglu Ozkan, Annibale Panichella
Blockchain systems are prone to concurrency bugs due to the nondeterminism in the delivery order of messages between the distributed nodes. These bugs are hard to detect since they can only be triggered by a specific order or timing of concurrent events in the execution. Systematic concurrency testing techniques, which explore all possible delivery orderings of messages to uncover concurrency bugs, are not scalable to large distributed systems such as blockchains. Random concurrency testing methods search for bugs in a randomly generated set of executions and offer a practical testing method.In this paper, we investigate the effectiveness of random concurrency testing on blockchain systems using a case study on the XRP Ledger of the Ripple blockchain, which maintains one of the most popular cryptocurrencies in the market today. We test the Ripple consensus algorithm of the XRP Ledger by exploring different delivery orderings of consensus protocol messages. Moreover, we design an evolutionary algorithm to guide the random test case generation toward certain system behaviors to discover concurrency bugs more efficiently. Our case study shows that random concurrency testing is effective at detecting concurrency bugs in blockchains, and the evolutionary approach for test generation improves test efficiency. Our experiments could successfully detect the bugs we seeded in the Ripple source code. Moreover, we discovered a previously unknown concurrency bug in the production implementation of Ripple.
Marco Benedetti, Francesco De Sclavis, Marco Favorito, Giuseppe Galano · 7 authors
Distributed Ledger Technologies (DLTs), when managed by a few trusted validators, require most but not all of the machinery available in public DLTs. To profit from this s tate of affairs, we inject a PoA (Proof-of-Authority) protocol into Bitcoin, replacing its PoW. Our PoA consensus algorithm-built on top of PBFT and FROST-exhibits Byzantine Fault Tolerance and Confidentiality of the network configuration an d of th e quorum of signers. As such, it may become a modern and safe foundation for payment systems used in stablecoins, sidechains, and CBDCs.
A significant portion of research on distributed ledgers has focused on circumventing the limitations of leader-based blockchains mainly in terms of scalability, decentralization and power consumption. Leaderless architectures based on directed acyclic graphs (DAGs) avoid many of these limitations altogether, but their increased flexibility and performance comes at the cost of increased design complexity, so their potential has remained largely unexplored. Management of write access to these ledgers presents a major challenge because ledger updates may be made in parallel, hence transactions cannot simply be serialised and prioritised according to token fees paid to validators. In this work, we propose an access control scheme for leaderless DAG-based ledgers which is based on consuming credits rather than paying fees in the base token. We outline a general model for this new approach and provide some simulation results showing promising performance boosts.
Darcy Camargo, Andreas Penzkofer, Sebastian Müller, William H. Sanders
The robust construction of the ledger data structure is an essential ingredient for the safe operation of a distributed ledger. While in traditional linear blockchain systems, permission to append to the structure is leader-based, in Directed Acyclic Graph-based ledgers, the writing access can be organised leaderless. However, this leaderless approach relies on fair treatment of non-referenced blocks, i.e. tips, by honest block issuers. We study the impact of a deviation from the standard tip selection by a subset of block issuers with the aim of halting the confirmation of honest blocks entirely. W e provide models on this so-called orphanage of blocks and validate these through open-sourced simulation studies. A critical threshold for the adversary issuance rate is shown to exist, above which the tip pool becomes unstable, while for values below the orphanage decrease exponentially. We study the robustness of the protocol with an expiration time on tips, also called garbage collection, and modification of the parent references per block.
Many protocols in distributed computing rely on a source of randomness, usually called a random beacon, both for their applicability and security. This is especially true for proof-of-stake blockchain protocols in which the next miner or set of miners have to be chosen randomly and each party's likelihood to be selected is in proportion to their stake in the cryptocurrency. Current random beacons used in proof-of-stake protocols, such as Ouroboros and Algorand, have two fundamental limitations: Either (i)~they rely on pseudorandomness, e.g.~assuming that the output of a hash function is uniform, which is a widely-used but unproven assumption, or (ii)~they generate their randomness using a distributed protocol in which several participants are required to submit random numbers which are then used in the generation of a final random result. However, in this case, there is no guarantee that the numbers provided by the parties are uniformly random and there is no incentive for the parties to honestly generate uniform randomness. Most random beacons have both limitations. In this thesis, we provide a protocol for distributed generation of randomness. Our protocol does not rely on pseudorandomness at all. Similar to some of the previous approaches, it uses random inputs by different participants to generate a final random result. However, the crucial difference is that we provide a game-theoretic guarantee showing that it is in everyone's best interest to submit uniform random numbers. Hence, our approach is the first to incentivize honest behavior instead of just assuming it. Moreover, the approach is trustless and generates unbiased random numbers. It is also tamper-proof and no party can change the output or affect its distribution. Finally, it is designed with modularity in mind and can be easily plugged into existing distributed protocols such as proof-of-stake blockchains.
Smart contracts are programs with data (mutable state); stored on and executed by blockchain platforms. The transactions (or function invocations) dispatched to smart contracts often change their state. In the Ethereum blockchain, nodes (aka miners/validators) can schedule a set of transactions in any order in a block. Multiple transactions in a single block operating on a contract's shared state may yield different outcomes based on their execution order, thus creating a possibility for non-determinism and races between transactions. The resulting issue in Ethereum smart contracts is Transaction Ordering Dependency (TOD). Detecting a TOD requires identifying valid transactions affecting a contract's global/state variables which is equivalent to detecting read-after-write dependencies in race detection, and we expect it to be similarly nontrivial for human developers. In this paper, we identify various TODs, including a novel type previously undocumented in the literature. To detect these TODs, we propose an information flow analysis-based static analyzer, TODler. Our manual evaluation of 108 Ethereum smart contracts shows that TODler outperforms previously available approaches in terms of both run time and precision and also detects the novel TOD pattern identified in this paper.
Rabimba Karanjai, Lei Xu, Nour Diallo, Lin Chen · 5 authors
Function-as-a-service (FaaS) is an emerging computation architecture, which provides high scalability and flexibility. All the existing F aaS systems are owned and managed by a single cloud service provider. While this is not an issue for most existing enterprise applications, such character is not compatible with the decentralization principle of dApp/Web3 applications, more of which are being deployed in the cloud environment. Therefore, there is an urgent need to build a decentralized FaaS, which is managed by multiple cloud service providers and allows a decentralized application to take advantages of FaaS. In this research paper, we propose DeFaaS, a novel system for managing decentralized FaaS using blockchain technology and decentralized API management, where functions are executed on a distributed network of nodes by multi-cloud data centers, rather than on a centralized server. This allows for greater scalability and flexibility, as well as improved security and reliability.
Bing-Yang Lin, Daria Dziubałtowska, Piotr Macek, Andreas Penzkofer · 5 authors
DAG-based DLTs allow for parallel, asynchronous writing access to a ledger. Consequently, the perception of the most recent blocks may differ considerably between nodes, and the underlying network properties of the P2P layer have a direct impact on the performance of the protocol. Moreover, the stronger inter-dependencies of several core components demand a more complex and complete approach to studying such DLTs. This paper presents an agent-based, open-sourced simulator for large-scale networks that implement the leaderless Tangle 2.0 consensus protocol. Its scope includes modelling the underlying peer-to-peer communication with network topology, package loss, heterogeneous latency, the gossip protocol with reliable broadcast qualities, the underlying DAG-based data structure, and the consensus protocol. The simulator allows us to explore the performance of the protocol in different network environments, as well as different attack scenarios.
Fabian Kirstein, Anton Altenbernd, Sonja Schimmler, Manfred Hauswirth
The Data Catalogue Vocabulary (DCAT) standard is a popular RDF vocabulary for publishing metadata about data catalogs and a valuable foundation for creating Knowledge Graphs. It has widespread application in the (Linked) Open Data and scientific communities. However, DCAT does not specify a robust mechanism to create and maintain persistent identifiers for the datasets. It relies on Internationalized Resource Identifiers (IRIs), that are not necessarily unique, resolvable and persistent. This impedes findability, citation abilities, and traceability of derived and aggregated data artifacts. As a remedy, we propose a decentralized identifier registry where persistent identifiers are managed by a set of collaborative distributed nodes. Every node gives full access to all identifiers, since an unambiguous state is shared across all nodes. This facilitates a common view on the identifiers without the need for a (virtually) centralized directory. To support this architecture, we propose a data model and network methodology based on a distributed ledger and the W3C recommendation for Decentralized Identifiers (DID). We implemented our approach as a working prototype on a five-peer test network based on Hyperledger Fabric.