Mobile crowdsensing (MCS) is a promising paradigm of large-scale sensing. A group of mobile users is recruited with their smart devices to accomplish various sensing tasks in specific areas. The mobility and intelligence of mobile users enable MCS to achieve a sufficient coverage ratio of sensing tasks or areas. Currently, MCS is generally proposed and implemented in a centralized way under a platform’s control. However, this centralized structure is vulnerable to a single point of failure. The platform’s failure leads to a shutdown of the entire system. In addition, there is a trust issue between the platform and mobile users because of computational transparency and financial security. It is possible that the platform manipulates the working process of MCS to obtain an improper gain. To overcome these problems, we propose a decentralized MCS framework, named ChainSensing, by leveraging blockchain. In ChainSensing, mobile users interact with blockchain via smart contracts to complete their operations, e.g., publishing sensing tasks and submitting collected data. Since there are computationally intensive problems in ChainSensing, e.g., path planning, path selection, and reward determination, it is significantly expensive to solve such problems in blockchain. Therefore, we propose to leverage smart devices and computing oracles to solve these problems. Specifically, we propose a heuristic algorithm to solve the path planning problem in smart devices of mobile users; we employ computing oracles to solve the path selection and reward determination problems. Finally, we conduct numerical simulations based on Ethereum to evaluate the performance of ChainSensing.
P Bhanupriya, Sabitha Gauni, K Kalimuthu, C. T. Manimegalai
Abstract Blockchain has recently become an essential tool which enables sensitive cloud services without the need for central confidence. For example, several different cryptocurrencies were permitted with public blockchains. Unfortunately, confidential details may be exposed on current public blockchain and smart contracts implemented there. Whilst some continuous work is under way to resolve these insecure knowledge leakage problems using advanced cryptography, they need major improvements on current and common Blockchain technology such as Ethereum and are typically costly in computing. On the other hand, blockchain applications were proposed to allow the data exchange among the pre accepted nodes/participants to be more efficient and privacy-preserving. While private blockchains respond to certain challenges of privacy by allowing only the particular community of participants to view sensitive data, they do not allow public transparency for communications because businesses are accepted by a known number of users also cannot be freely viewed. One natural problem is whether we should use public and private Blockchain networks in order to allow effective, improve privacy and accountable applications in view of these findings? In this work, we try in connection with digital auctions to face this challenge. In specific, we provide a newly designed blockchain architecture combined with private and open blockchains which enables sensitive offers to be opened up on a secluded blockchain so solitary the merchant can study the offers, and none of others. We also use shared blockchains to report the public sale winner and to make transfers responsible. Moreover, we demonstrate how we can promote sincere activity among auction participants by using intelligent contracts on public blockchains. Our detailed analytical findings suggest that it’s more cost effective compared to pure public auction implementations based on blockchain.
Charmee Mehta, Ansh Mehta, Sayyam Gada, Neeta Kadukar
Online voting is one of the new, upcoming alternatives to the traditional systems like Electronic Voting Machine (EVM) and age-old ballot paper. Centralized online voting systems are vulnerable to a plethora of problems. Blockchain, with its characteristics, solves many of the problems faced in online voting and traditional systems. Blockchain is immutable i.e. after a vote is cast, it cannot be undone, and it is decentralized and distributed and therefore there is no central authority over the voting system. These characteristics of Blockchain ensure transparency in the election. The paper involves the concept of Blockchain technology and its application in the field of Electronic Voting. The paper proposes a system that implements online voting with an underlying Blockchain system. The proposed system can be implemented to provide services to medium-scale and large-scale corporations. The system has been tested and deployed on the Rinkeby test network, using Ethereum as a framework to develop smart contracts using Solidity. This system can conduct multiple elections simultaneously. This paper also contains a detailed analysis of the operating expenditure in the form of graphs which were tested in several elections. This system has been tested for scalability, efficiency, and usability according to the requirements.
Christos Karapapas, Iakovos Pittaras, George C. Polyzos
We leverage the InterPlanetary File System (IPFS) and Non-Fungible Tokens (NFTs) backed by Distributed Ledger Technologies (DLTs) to build a flexible, decentralized, and fair baseline system for trading games. Our solution creates a fully decentralized system, where new business models are enabled, as the evolvable assets of the games can be resold and priced depending on their rarity, giving also a cut to the digital artist, without the need for a trusted party. The system guarantees that assets will remain online, thus the users do not risk losing control over the artefacts or their value, even if the creator game company loses interest or goes bankrupt.
Emanuel Palm, Olov Schelén, Ulf Bodin, Christian Lagerkvist
Industry 4.0 will require unprecedented degrees of integration across organizational boundaries, which will put new demands on infrastructure for managing agreements between industrial stakeholders. In this paper, we present a system-of-systems architecture for cross-organizational negotiation of Ricardian contracts. We also describe our implementation of it, based on Eclipse Arrowhead, and how it can produce non-repudiable contracts between local clouds, potentially owned by distinct parties. We discuss how our architecture could impact current business paradigms, as well as arguing that our design, in contrast to most solutions based on smart contracts, avoids to deviate significantly from contemporary legal praxis, which should create better opportunity for industry adoption.
Does the proof-of-work consensus protocol serve its intended purpose of supporting decentralized cryptocurrency mining? To address this question, we develop a game-theoretical model in which miners first invest in hardware to improve the efficiency of their operations and then compete for mining rewards in a rent-seeking game. We show that centralization grows with heterogeneity in mining costs, but hardware capacity constraints prevent the most efficient miners from monopolizing the mining process. Investment leads to a more decentralized network unless larger miners have a significant comparative advantage in acquiring new hardware. Our model generates empirically supported implications: (i) mining centralization is countercyclical with respect to mining reward, and (ii) a change in mining reward leads to a less-than-proportional change in hash rates. This paper was accepted by David Simchi-Levi, Special Section of Management Science: Blockchains and Crypto Economics. Supplemental Material: The data file is available at https://doi.org/10.1287/mnsc.2023.4840 .
Kaihua Qin, Liyi Zhou, Pablo Gamito, Philipp Jovanovic · 5 authors
Financial speculators often seek to increase their potential gains with leverage. Debt is a popular form of leverage, and with over 39.88B USD of total value locked (TVL), the Decentralized Finance (DeFi) lending markets are thriving. Debts, however, entail the risks of liquidation, the process of selling the debt collateral at a discount to liquidators. Nevertheless, few quantitative insights are known about the existing liquidation mechanisms. In this paper, to the best of our knowledge, we are the first to study the breadth of the borrowing and lending markets of the Ethereum DeFi ecosystem. We focus on Aave, Compound, MakerDAO, and dYdX, which collectively represent over 85% of the lending market on Ethereum. Given extensive liquidation data measurements and insights, we systematize the prevalent liquidation mechanisms and are the first to provide a methodology to compare them objectively. We find that the existing liquidation designs well incentivize liquidators but sell excessive amounts of discounted collateral at the borrowers' expenses. We measure various risks that liquidation participants are exposed to and quantify the instabilities of existing lending protocols. Moreover, we propose an optimal strategy that allows liquidators to increase their liquidation profit, which may aggravate the loss of borrowers.
Manuel M. T. Chakravarty, Nikos Karayannidis, Aggelos Kiayias, Michael Peyton Jones · 5 authors
Custom currencies (ERC-20) on Ethereum are wildly popular, but they are second class to the primary currency Ether. Custom currencies are more complex and more expensive to handle than the primary currency as their accounting is not natively performed by the underlying ledger, but instead in user-defined contract code. Furthermore, and quite importantly, transaction fees can only be paid in Ether. In this paper, we focus on being able to pay transaction fees in custom currencies. We achieve this by way of a mechanism permitting short term liabilities to pay transaction fees in conjunction with offers of custom currencies to compensate for those liabilities. This enables block producers to accept custom currencies in exchange for settling liabilities of transactions that they process. We present formal ledger rules to handle liabilities together with the concept of babel fees to pay transaction fees in custom currencies. We also discuss how clients can determine what fees they have to pay, and we present a solution to the knapsack problem variant that block producers have to solve in the presence of babel fees to optimise their profits.
Cryptocurrencies such as Bitcoin are breakthrough financial technologies that promise to revolutionize the digital economy. Unfortunately, their long-term adoption in the business world is imperiled by a lack of stability that manifests as dramatic swings in transaction fees and severe participant dissatisfaction. To date, there has been little academic effort to study how system participants react to volatility in fee movements. Our study addresses this research gap by conceptualizing the Bitcoin platform as a data space market and studying how market equilibrium forms between users who demand data space while trying to avoid transaction delays, and miners who supply data space while trying to maximize fee revenues. Our empirical analysis based on past bitcoin transactions reveals the existence of a relatively flat downward-sloping demand curve and a much steeper upward-sloping supply curve. Regarding users, the inelastic nature of demand signals the utility of Bitcoin as a niche platform for transactions that are otherwise difficult to conduct. This result challenges the belief that users may easily abandon Bitcoin technology given rising transaction costs. We also find that the use of bitcoins as a trading asset is associated with higher levels of tolerance to fees. Regarding miners, the comparatively elastic nature of supply indicates that higher fees stimulate mining by a larger magnitude than suppressing demand. This finding implies that, ceteris paribus, the Bitcoin system turns to self-regulate transaction fees in an efficient manner. Our work has implications for the management of congestion in blockchain-based systems and more broadly for the stability of cryptocurrency markets.
<div>In cross-chain scenarios, there are different blockchains, which need to cooperate. Cooperation among different blockchains is done by smart contracts that work together to complete cross-chain tasks. When numerous cooperative smart contracts are involved, smart contracts form a complex interaction network, which makes it difficult to evaluate the cooperation. It needs a common model to quantitatively analyze the cross-chain cooperation of associated smart contracts. In this paper, we model the cooperation among smart contracts as conditions and their corresponding actions, the condition-trigger model. Then we propose the method to calculate the cooperation probabilities by the graph weight. As the edge weight lacks the information of interaction probabilities, we introduce the dimension of the edge weight to calculate the probabilities. Finally, we verify the proposed condition-trigger model and its different types. It demonstrates that our proposed methods can effectively analyze the cross-chain cooperation among smart contracts.</div>
Igor Struchkov, Alexey Lukashin, Bogdan Kuznetsov, Igor Mikhalev · 5 authors
Decentralized financial applications running on blockchains using smart contracts have attracted a lot of attention recently. One important class of such applications is decentralized digital asset exchanges. In this paper we present an agent-based modeling approach for decentralized exchanges that allowed us to achieve realistic results both in normal and stress market conditions and also investigate the impact of front runners on the distribution of profits. We also compare the results of the two exchanges - Uniswap and Liquifi - to evaluate the effect of the proposed solution for the price slippage and front running problems.
In our model, a venture seeks capital through an initial coin offering (ICO). The ICO enables the venture to collect demand information from decentralized investors. The venture makes a tradeoff between ensuring the project’s success and forecasting market demand through token size and token price. We find that the higher the demand uncertainty and production cost, the greater the venture’s incentive to learn from its investors. To identify when the venture has an incentive to raise funds through an ICO, we compare it with traditional bank financing and analyze the venture’s preference between the two financing options. The results show that when demand uncertainty is high, an ICO can provide both financing and information benefits, whereas when demand uncertainty is low, although the venture does not collect information through an ICO, it can still get financing benefit. Only when demand uncertainty is intermediate, the venture prefers bank financing. In addition, we find that although the revenue sharing effect of the ICO results in an underinvestment issue, it can also alleviate the loss caused by the increased cost of production. Therefore, with high information accuracy, as production cost goes up, ICOs become more attractive than bank financing for the venture.
In this paper, a novel Byzantine consensus protocol among $n$ players is proposed for the partially synchronous model. In particular, by assuming that standard cryptography is unbreakable, and that $n>\max\bigl(\frac{3}{2}k+3t,2(k+t)\bigr)$, this protocol is an equilibrium where no coalition of $k$ rational players can coordinate to increase their expected utility regardless of the arbitrary behavior of up to $t$ Byzantine players. We show that a baiting strategy is necessary and sufficient to solve this, so-called rational agreement problem. First, we show that it is impossible to solve this rational agreement problem without implementing a baiting strategy, a strategy that rewards rational players for betraying its coalition, by exposing undeniable proofs of fraud. Second, we propose the Huntsman protocol that solves the rational agreement problem by building recent advances in the context of accountable Byzantine agreement in partial synchrony. This protocol finds applications in distributed ledgers where players are incentivized to steal assets by leading other players to a disagreement on two distinct decisions where they ``double spend''.
Stock markets have a centralized structure that has a number of intermediaries and operational trade policies contributing to high transaction times. Blockchain has the capability to optimize market transactions using automation with high security to create a peer-to-peer trading environment. It reduces operational risk by enabling transparency, certitude and interoperability in fragmented market systems to eliminate the need for third party regulators to a large extent. In this paper, a decentralized stock exchange system is implemented with Distributed Ledger Technology (DLT) on Ethereum for executing trades by separating concerns into three different smart contracts: buyer, seller and exchange. The self-enforcing smart contracts used are highly flexible and optimized for parallel operation due to functional abstraction. The multi-contract model is compared to a single contract model, which handles all three aspects within the same contract, by executing sample trading data from NASDAQ. Transaction fees for the miner at 161 Gwei is 27.96% lesser for the single-contract system and 98.75% lesser for the multi-contract system than the brokerage fees of traditional traders for the same transactions. Experimental results indicate that the separation of concern results in transaction costs being 98.26% lower and transaction time being 28.70% lower than having a single contract.
Payment channel networks (PCNs) are proposed to improve the cryptocurrency scalability by settling off-chain transactions. However, PCN introduces an undesirable assumption that a channel participant must stay online and be synchronized with the blockchain to defend against frauds. To alleviate this issue, watchtowers have been introduced, such that a hiring party can employ a watchtower to monitor the channel for fraud. However, a watchtower might profit from colluding with a cheating counterparty and fail to perform this job. Existing solutions either focus on heavy cryptographic techniques or require a large collateral. In this work, we leverage smart contracts through economic approaches to counter collusions for watchtowers in PCNs. This brings distrust between the watchtower and the counterparty, so that rational parties do not collude or cheat. We provide detailed analyses on the contracts and rigorously prove that the contracts are effective to counter collusions with minimal on-chain operations. In particular, a watchtower only needs to lock a small collateral, which incentivizes participation of watchtowers and users. We also provide an implementation of the contracts in Solidity and execute them on Ethereum to demonstrate the scalability and efficiency of the contracts.
Youssef Faqir-Rhazoui, Miller-Janny Ariza-Garzón, Javier Arroyo, Samer Hassan
Blockchain technology has enabled a thriving emergent ecosystem of tools and communities actively using decentralized systems. However, most blockchain infrastructure (e.g. Ethereum) requires users to pay some fees to execute their desired actions in these novel online services. To which extent an increase in the price of such fees negatively affects user activity? Would significant price surges deter users from using blockchain-enabled online services? In this work, we study the 2020 surge of transaction fee price in the Ethereum network, and analyze how that affected user activities. Our use cases are the blockchain-enabled Decentralized Autonomous Organizations (DAOs) from the platforms DAOstack and DAOhaus. Thus, we analyzed 5,580 transactions from 7,825 users grouped in 191 DAO communities, using a VAR model with a daily time series of the average fee value and the DAO operations. Our results show just a minor influence of the fee (gas) price and the activity of DAO users. The insensitivity of the activity to the fee price is an anomaly in a supposedly self-regulated market, and we consider this should be tackled in future implementations.
Lucas Massoni Sguerra, Pierre Jouvelot, Emilio Jesús Gallego Arias, Gérard Memmi · 5 authors
The second generation of blockchains introduces the notion of "smart contract" to decentralized ledgers, but with each new blockchain system comes di erent consensus mechanisms or di erent approaches on how to assess the cost of computation inside the chain, both aspects that a ect the e ciency of the systems as a decentralized computer. We present an experimental comparison of two blockchain systems, namely Ethereum and Tezos, from the perspective of smart contracts, centered around the same implementation of a VCG for Sponsored Search auction algorithm, respectively encoded in Solidity and SmartPy. Our analysis shows the feasibility of implementing an algorithm for sponsored search in such an environment while providing information on how useful these systems can be for this type of smart contracts.
E Chen, Bohan Qin, Yan Zhu, Weijing Song · 7 authors
In recent years, advanced smart contract languages (ASCLs) have been proposed to solve the problem of difficult reading, comprehension, and collaboration when writing smart legal contracts among people in different fields. However, this kind of languages are still hard to put into practice due to the lack of an effective conversion method from the ASCLs to executable smart contract programs. Aiming at this problem, we take SPESC as example to explore how to design conversion rules from the contract in it to the target programming language in Solidity, and to propose a three-layer smart contract framework, including advanced smart-contract layer, general smart-contract layer, and executable machine-code layer. These rules provide an approach to convert the definition of SPESC contracting parties into party-contracts on target language, as well as to produce SPESC contract terms into main-contract on target language. Moreover, the proposed framework specifies not only program architecture and storage structure on general smart-contract layer, but also important mechanisms, including personnel management, timing control, exception handling, etc., which can assist programmers to write smart contract programs. Furthermore, taking four SPESC contracts as testing objects, we provide the whole process of converting from SPESC contracts to Solidity programs by the SPESC-Translator, and verify the efficiency and security of the conversion process, including coding, deploying, running, and testing through Ethereum. The instance results show that the conversion rules and the three-layer framework can simplify the writing of smart contracts, standardize the program structure, and help programmers to verify the correctness of the contract programs.
Rabimba Karanjai, Lei Xu, Zhimin Gao, Lin Chen · 6 authors
In this paper, we present the design and implementation of a conditional cryptocurrency system with privacy protection. Unlike the existing approaches that often depend on smart contracts where cryptocurrencies are first locked in a vault, and then released according to event triggers, the conditional cryptocurrency system encodes event outcome as part of a cryptocurrency note in a UTXO based system. Without relying on any triggering mechanism, the proposed system separates event processing from conditional coin transaction processing where conditional cryptocurrency notes can be transferred freely in an asynchronous manner, only with their asset values conditional to the linked event outcomes. The main advantage of such design is that it enables free trade of conditional assets and prevents assets from being locked. In this work, we demonstrate a method of confidential conditional coin by extending the Zerocoin data model and protocol. The system is implemented and evaluated using xJsnark.
Natkamon Tovanich, Nicolas Soulié, Nicolas Heulot, Petra Isenberg
We provide an empirical analysis of pool hopping behavior among 15 mining pools throughout Bitcoin's history. Mining pools have emerged as major players to ensure that the Bitcoin system stays secure, valid, and stable. Individual miners join mining pools to benefit from a more predictable income. Many questions remain open regarding how mining pools have evolved throughout Bitcoin's history and when and why miners join or leave mining pools. We propose a heuristic algorithm to extract the payout flow from mining pools and detect the pools' migration of miners. Our results showed that payout schemes and pool fees influence miners' decisions to join, change, or exit from a mining pool, thus affecting the dynamics of mining pool market shares. Our analysis provides evidence that mining activity becomes an industry as miners' decisions follow classical economic rationale.