Follow blockchain research across journals, conferences, and preprint repositories.
1,455 results · page 33 of 61
Xing Bao, Prakash Mirchandani, Jennifer Shang
No abstract is available for this record.
Oiler Network
No abstract is available for this record.
Daniel Hellwig, Kai Wendt, Volodymyr Babich, Arnd Huchzermeier
No abstract is available for this record.
Xiangyu Du, Zhengwei Jiang, Jun Jiang, Kai Zhang · 8 authors
No abstract is available for this record.
Kushal Soni, Olga De Troyer
No abstract is available for this record.
Matheus V. X. Ferreira, Daniel J. Moroz, David C. Parkes, Mitchell Stern
In recent years, prominent blockchain systems such as Bitcoin and Ethereum have experienced explosive growth in transaction volume, leading to frequent surges in demand for limited block space and causing transaction fees to fluctuate by orders of magnitude. Existing systems sell space using first-price auctions; however, users find it difficult to estimate how much they need to bid in order to get their transactions accepted onto the chain. If they bid too low, their transactions can have long confirmation times. If they bid too high, they pay larger fees than necessary. In light of these issues, new transaction fee mechanisms have been proposed, most notably EIP-1559, aiming to provide better usability. EIP-1559 is a history-dependent mechanism that relies on block utilization to adjust a base fee. We propose an alternative design - a dynamic posted-price mechanism - which uses not only block utilization but also observable bids from past blocks to compute a posted price for subsequent blocks. We show its potential to reduce price volatility by providing examples for which the prices of EIP-1559 are unstable while the prices of the proposed mechanism are stable. More generally, whenever the demand for the blockchain stabilizes, we ask if our mechanism is able to converge to a stable state. Our main result provides sufficient conditions in a probabilistic setting for which the proposed mechanism is approximately welfare optimal and the prices are stable. Our main technical contribution towards establishing stability is an iterative algorithm that, given oracle access to a Lipschitz continuous and strictly concave function f, converges to a fixed point of f.
Alptekın Küpçü, Reihaneh Safavi–Naini
No abstract is available for this record.
Sylvain Carré, Franck Gabriel, Clément Hongler, Gustavo Lacerda · 5 authors
We introduce the SPRIG (Smart Proofs via Recursive Information Gathering) protocol. SPRIG allows agents to propose, question, and defend mathematical proofs in a decentralized fashion. A structure of stakes and bounties aims at producing debates in good faith and if those persist, they must go down to machine-level details, where they can be settled automatically. This combination of economic incentives and an oracle is designed to promote succinct and informative proofs. SPRIG can run autonomously as a smart contract on a blockchain platform, and hence it does not rely on a central trusted institution. We translate SPRIG into a general game-theoretic model and prove that the protocol satisfies two desirable properties: no spamming and monotonicity. We then characterize analytically the equilibrium of a simple two-player specification of the model: this provides important insights into the impact of the protocol’s parameters on the probabilities that it induces type I/II errors. We conclude by discussing the main attacks SPRIG’s designers will need to take into account.
Leonardo Maria De Rossi, Michel Avital, Rob Gleasure
Over the last decade, numerous studies have examined the remarkable appreciation of cryptocurrencies and have typically focused on their price and the factors that predict them. In contrast, this paper argues that the success of a cryptocurrency is determined not only by its monetary value but also by the proliferation of its end users. Specifically, we hypothesize that changes in developers’ and miners’ activities drive the growing proliferation of a cryptocurrency’s end users. Building on the Bitcoin case, we use a time-series model based on 4,285 Bitcoin daily observations to suggest that changes in the number of end users are anticipated by surges or drops in activity by the developers and miners who develop and maintain the network. We further find a limited relationship between these variables and the price of Bitcoin. These results support an alternative view of cryptocurrencies’ success and highlight further research avenues in this nascent domain.
Elvira Albert, Pablo Gordillo, Alejandro Hernández-Cerezo, Clara Rodríguez-Núñez · 5 authors
Abstract The use of the Ethereum blockchain platform [17] has experienced an enormous growth since its very first transaction back in 2015 and, along with it, the verification and optimization of the programs executed in the blockchain (known as Ethereum smart contracts ) have raised considerable interest within the research community.
David Minarsch, Marco Favorito, Seyed Ali Hosseini, Yuri Turchenkov · 5 authors
No abstract is available for this record.
Ayelet Lotem, Sarah Azouvi, Patrick McCorry, Aviv Zohar
Many prominent smart-contract applications such as payment channels, auctions, and voting systems often involve a mechanism in which some party must respond to a challenge or appeal some action within a fixed time limit. This pattern of challenge-response mechanisms poses great risks if during periods of high transaction volume, the network becomes congested. In this case fee market competition can prevent the inclusion of the response in blocks, causing great harm. As a result, responders are allowed long periods to submit their response and overpay in fees. To overcome these problems and improve challenge-response protocols, we suggest a secure mechanism that detects congestion in blocks and adjusts the deadline of the response accordingly. The responder is thus guaranteed a deadline extension should congestion arise. We lay theoretical foundations for congestion signals in blockchains and then proceed to analyze and discuss possible attacks on the mechanism and evaluate its robustness. Our results show that in Ethereum, using short response deadlines as low as 3 hours, the protocol has >99% defense rate from attacks even by miners with up to 33% of the computational power. Using shorter deadlines such as one hour is also possible with a similar defense rate for attackers with up to 27% of the power.
Carol Alexander, Daniel F. Heck, Andreas Kaeck
No abstract is available for this record.
Alex Chinco
The conventional wisdom is that you must reveal something about how you pick stocks in order to prove that you have stock-picking skill. In this paper I show that, prior to executing any trades, it is possible to prove you have stock-picking skill without revealing any additional information about your underlying trading signal. Here is how the protocol works. The evaluator presents you with a sequence of paired return data sets, one real and the other suitably randomized. A profitable trading signal will only be able to predict the cross-section of returns in the real data set. So by repeatedly using your trading signal to identify the real data set, you can prove that you have stock-picking skill without revealing anything else about your underlying signal. This protocol represents a zero-knowledge proof of stock-picking skill—i.e., a proof which reveals nothing except for the validity of your claim. Zero-knowledge proofs allow any skilled stock picker to advertise his ability without fear of his trading signal getting scooped. As a result, they have important implications for how the active-management industry is organized.
Wenpin Tang, David D. Yao
We propose and study a new class of polynomial voting rules for a general decentralized decision/consensus system, and more specifically for the proof-of-stake protocol. The main idea, inspired by the Penrose square-root law and the more recent quadratic voting rule, is to differentiate a voter’s voting power and the voter’s share (fraction of the total in the system). We show that, whereas voter shares form a martingale process that converges to a Dirichlet distribution, their voting powers follow a supermartingale process that decays to zero over time. This prevents any voter from controlling the voting process and, thus, enhances security. For both limiting results, we also provide explicit rates of convergence. When the initial total volume of votes (or stakes) is large, we show a phase transition in share stability (or the lack thereof), corresponding to the voter’s initial share relative to the total. We also study the scenario in which trading (of votes/stakes) among the voters is allowed and quantify the level of risk sensitivity (or risk aversion) in three categories, corresponding to the voter’s utility being a supermartingale, a submartingale, and a martingale. For each category, we identify the voter’s best strategy in terms of participation and trading. Funding: W. Tang gratefully acknowledges financial support through the National Science Foundation [Grants DMS-2113779 and DMS-2206038] and through a start-up grant at Columbia University. D. D. Yao’s work is part of a Columbia–City University/Hong Kong collaborative project that is supported by InnoHK Initiative, the Government of Hong Kong Special Administrative Region, and the Laboratory for AI-Powered Financial Technologies.
Valeria Fionda, Gianluigi Greco, Marco Antonio Mastratisi
No abstract is available for this record.
Brett Hemenway, Bin Gu, Gerry Tsoukalas, Niuniu Zhang
Non-Fungible Tokens (NFTs) are transforming how content creators, such as artists, price and sell their work. A key feature of NFTs is the inclusion of royalties, which grant creators a share of all future resale proceeds. Although widely used, critics argue that sophisticated speculators, who dominate NFT markets, simply price in royalties upfront, neutralizing their impact. We show this intuition holds only under perfect, frictionless markets. Under more realistic market conditions, royalties enable creators to capitalize on the presence of speculators in at least three ways: They can enable risk sharing (under risk aversion), mitigate information asymmetry (when speculators are better informed), and unlock price discrimination benefits (in multi-unit settings). Moreover, in all three cases, royalties meaningfully expand trade, implying increased transaction volume for platforms. These results offer testable predictions that can guide both empirical research and platform design.
Jun Aoyagi, Yuki Ito
No abstract is available for this record.
Larry Bridgesmith, Adel Elmessiry, Mohamed Marei
No abstract is available for this record.
Joshua S. Gans, Richard Holden
Blockchain consensus is a state whereby each node in a network agrees on the current state of the blockchain. Existing protocols achieve consensus via a contest or voting procedure to select one node as a dictator to propose new blocks. However, this procedure can still lead to potential attacks that make consensus harder to achieve or lead to coordination issues if multiple, competing chains (i.e., forks) are created with the potential that an untruthful fork might be selected. We explore the potential for mechanisms to be used to achieve consensus that are triggered when there is a dispute impeding consensus. Using the feature that nodes stake tokens in proof of stake (POS) protocols, we construct revelation mechanisms in which the unique (subgame perfect) equilibrium involves validating nodes propose truthful blocks using only the information that exists amongst all nodes. We construct operationally and computationally simple mechanisms under both Byzantine Fault Tolerance and a Longest Chain Rule, and discuss their robustness to attacks. Our perspective is that the use of simple mechanisms is an unexplored area of blockchain consensus and has the potential to mitigate known trade-offs and enhance scalability.
Reiko Heckel, Zobia Erum, Nitia Rahmi, Albert Pul
No abstract is available for this record.
Namrata Jain, Kosuke Kaneko, Subodh Sharma
No abstract is available for this record.
Lin William Cong, Xiang Hui, Catherine E. Tucker, Luofeng Zhou
Blockchain-based smart contracts can potentially replace certain traditional contracts through decentralized enforcement and reduced transaction costs. However, scalability is a key bottleneck hindering their broader application and adoption, often leading to concentrated or exclusive networks. To avoid falling short of the original promise of the technology, firms actively explore “layer-2” methods for scaling. We provide some initial evidence on the economic implications of a layer-2 scaling solution, which moves information aggregation from on-chain to off-chain peer-to-peer networks. A parallel-system experiment allows clean identification because we observe the same unit in the treatment and control systems at the same time. We find that this scaling solution reduces operating costs by 76%, and importantly, leads to decentralization with lower market concentration and more participation, which in turn improves data accuracy. The findings provide insights on how blockchain and smart contracting technologies evolve toward achieving decentralized and scalable trust. This paper was accepted by David Simchi-Levi, information systems. Funding: W. Cong received funding from Ripple’s university blockchain research initiative (UBRI). Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.00281 .
Hyoungsung Kim, Hyun‐Sik Kim, Yong-Suk Park
Decentralized Finance (DeFi) is an emerging financial service model based on blockchain technology. DeFi composability denotes the ability for different DeFi services to interact with one another resulting in new forms of financial services. The DeFi ecosystem is largely based on ERC-20 tokens that can represent the value of an asset. Collateralized assets in DeFi composability are locked and additional profit cannot be generated. In this paper, we propose a method to generate profit from locked assets by using ERC-721 Non-Fungible Tokens (NFTs) and perpetual contracts. NFT represents the rights to a certain asset. A perpetual contract is a futures contract that does not have an expiration date. We propose perpetual contract NFT, a new form of NFT that can be used as collateral, which exploits perpetual futures contracts in the cryptocurrency derivatives market. Collateral needs to be provided to back the value of a perpetual contract. If the perpetual contract is minted as NFT, the resulting NFT represents the rights to the perpetual contract and its collateral. Therefore, the perpetual contact NFT itself can be used as collateral for DeFi composability. A proof-of-concept smart contract and a web application for perpetual contract NFT are provided to demonstrate its functionality. To validate the profitability of the perpetual contract NFT using a real-world scenario, we experiment with the position NFT of Uniswap v3 decentralized exchange. The position NFT is a form of perpetual contract NFT. Specifically, we present validation with three types of pools: stablecoins, stablecoin/wrapped tokens pair, and wrapped tokens.