Collaboration among mobile devices (MDs) is becoming more important, as it could augment computing capacity at the network edge through peer-to-peer service provisioning, and directly enhance real-time computational performance in smart Internet-of-Things applications. As an important aspect of collaboration mechanism, conventional resource trading (RT) among MDs relies on an onsite interaction process, i.e., price negotiation between service providers and requesters, which, however, inevitably incurs excessive latency and degrades RT efficiency. To overcome this challenge, this article adopts the concept of futures contract (FC) used in financial market, and proposes a smart futures for low latency RT. This new technique enables MDs to form trading coalitions and negotiate multilateral forward contracts applied to a collaboration term in the future. To maximize the benefits of self-interested MDs, the negotiation process of FC is modelled as a coalition formation game comprised of three components executed in an iterative manner, i.e., futures resource allocation, revenue sharing and payment allocation, and distributed decision-making of individual MD. Additionally, a FC enforcement scheme is implemented to efficiently manage the onsite resource sharing via recording resource balances of different task-types and MDs. Simulation results prove the superiority of smart futures in RT latency reduction and trading fairness provisioning.
Aiming at insufficient situation to express and operate assets in smart contracts, in this article we attempt to add a new asset model into smart contract language (such as SPESC) through combing method of asset's expressions and transactions in real-world contracts. Moreover, a translation mechanism can be set up to accomplish a conversion from the asset model to an executable contract program. On this basis, we propose a new language design toward asset-driven specific smart contracts, called TA-SPESC. This language complies with the structure of real-world contracts and supports a formal definition composed of four modules: Party, asset, term, and contract attribute. This asset model on it can be used to define various types of rights (including the right of ownership, use, possession, usufruct, and disposition of assets), as well as five asset operations (including asset registration, deposit, withdrawal, transfer, and cancellation) to effectively support asset transaction. More important, a series of generation rules are proposed to translate the TA-SPESC contract to an executable contract program. Moreover, taking house rental contract as an example, we provide a TA-SPESC instance and its specific description of translation process according to the generation rules, which supports a semiautomatic generation to executable programs. Finally, the Solidity codes derived from TA-SPESC contracts are run and tested, and the experiment and comparison results indicate that TA-SPESC contracts have high abstraction and low complexity, as well as versatility and convenience of asset transaction, which lead to more reliable software with less errors and fewer misunderstanding.
The European Union Emissions Trading System (EU ETS) is a major pillar of the European energy policy to reduce greenhouse gas emissions. However, the reportedly pervasive frauds in this market are constraining the beneficial role of the EU ETS. In this conceptual paper, we propose to digitalize the EU ETS by distributed ledger technology (DLT), enabling the verification of authenticity and provenance, proof of ownership, and lifecycle traceability of carbon certificates and assets. Our platform allows verifiable credentials to validate emission allowances, real-time tracking of trading participants’ emissions, and the audit trail reporting of the decentralized trading records. Furthermore, we complement the DLT application concept with a structured interdisciplinary evaluation framework. Our framework and analysis aim to stimulate further interdisciplinary research in this area to support regulators, such as the European Commission, in designing effective digital emissions trading systems.
Tobias Guggenberger, Johannes Sedlmeir, Gilbert Fridgen, André Luckow
Private permissioned blockchains are deployed in ever greater numbers to facilitate cross-organizational processes in various industries, particularly in supply chain management. One popular example of this trend is Hyperledger Fabric. Compared to public permissionless blockchains, it promises improved performance and provides certain features that address key requirements of enterprises. However, also permissioned blockchains are still not as scalable as centralized systems, and due to the scarcity of theoretical results and empirical data, their real-world performance cannot be predicted with the necessary precision. We intend to address this issue by conducting an in-depth performance analysis of Hyperledger Fabric. The paper presents a detailed compilation of various performance characteristics using an enhanced version of the Distributed Ledger Performance Scan (DLPS). Researchers and practitioners alike can use the various performance properties identified and discussed as guidelines to better configure and implement their Hyperledger Fabric network. Likewise, they are encouraged to use the DLPS framework to conduct their measurements.
Dataset retrieved with an Ethereum client, and used by the code hosted here for this paper published in the Proceedings of the Web Conference 2021 (WWW ’21) Abstract: Cryptoassets such as cryptocurrencies and tokens are increasingly traded on decentralized exchanges. The advantage for users is that the funds are not in custody of a centralized external entity. However, these exchanges are prone to manipulative behavior. In this paper, we illustrate how wash trading activity can be identified on two of the first popular limit order book-based decentralized exchanges on the Ethereum blockchain, IDEX and EtherDelta. We identify a lower bound of accounts and trading structures that meet the legal definitions of wash trading, discovering that they are responsible for a wash trading volume in equivalent of 159 million U.S. Dollars. While self-trades and two-account structures are predominant, complex forms also occur. We quantify these activities, finding that on both exchanges, more than 30% of all traded tokens have been subject to wash trading activity. On EtherDelta, 10% of the tokens have almost exclusively been wash traded. All data is made available for future research. Our findings underpin the need for countermeasures that are applicable in decentralized systems.
With the development of blockchain technology, the fields of use of smart contracts are diversifying. Blockchain-based smart contracts are suitable in areas where integrity and transparency must be guaranteed with distributed ledger technology as the core. However, once the system is deployed, it cannot be modified, so it is important to ensure that the system works with the requirements and principles of the smart contract at the design stage. Therefore, in this paper, we aim to show that the system is accurate without contradictions/errors through formal verification using UPPAAL, a formal verification tool for the public descending auction system (Dutch Auction).
This paper presents the current state of the gaming industry, which provides an important background for an effective serious game implementation in mobile crowdsensing. An overview of existing solutions, scientific studies and market research highlights the current trends and the potential applications for citizen-centric platforms in the context of Cyber–Physical–Social systems. The proposed solution focuses on serious games applied in urban water management from the perspective of mobile crowdsensing, with a reward-driven mechanism defined for the crowdsensing tasks. The serious game is designed to provide entertainment value by means of gamified interaction with the environment, while the crowdsensing component involves a set of roles for finding, solving and validating water-related issues. The mathematical model of distance-constrained multi-depot vehicle routing problem with heterogeneous fleet capacity is evaluated in the context of the proposed scenario, with random initial conditions given by the location of players, while the Vickrey–Clarke–Groves auction model provides an alternative to the centralized task allocation strategy, subject to the same evaluation method. A blockchain component based on the Hyperledger Fabric architecture provides the level of trust required for achieving overall platform utility for different stakeholders in mobile crowdsensing.
Modern mathematics is built on the idea that proofs should be translatable\ninto formal proofs, whose validity is an objective question, decidable by a\ncomputer. Yet, in practice, proofs are informal and may omit many details. An\nagent considers a proof valid if they trust that it could be expanded into a\nmachine-verifiable proof. A proof's validity can thus become a subjective\nmatter and lead to a debate, which may be difficult to settle. Hence, while the\nconcept of valid proof is well-defined, the process to establish validity is\nitself a complex multi-agent problem.\n We introduce the SPRIG protocol. SPRIG allows agents to propose and verify\nsuccinct and informative proofs in a decentralized fashion; the trust is\nestablished by agents being able to request more details in the proof steps;\ndebates, if they arise, must isolate details of proofs and, if they persist, go\ndown to machine-level details, where they are automatically settled. A\nstructure of bounties and stakes is set to incentivize agents to act in good\nfaith.\n We propose a game-theoretic discussion of SPRIG, showing how agents with\nvarious types of information interact, leading to a proof tree with an\nappropriate level of detail and to the invalidation of wrong proofs, and we\ndiscuss resilience against various attacks. We then analyze a simplified model,\ncharacterize its equilibria and compute the agents' level of trust.\n SPRIG is designed to run as a smart contract on a blockchain platform. This\nallows anonymous agents to participate in the verification debate, and to\ncontribute with their information. The smart contract mediates the\ninteractions, settles debates, and guarantees that bounties and stakes are paid\nas specified.\n SPRIG enables new applications, such as the issuance of bounties for open\nproblems, and the creation of derivatives markets, allowing agents to inject\nmore information pertaining to proofs.\n
Over the past decade, blockchains and distributed ledger technologies have rapidly evolved. With increasing transaction volumes and the proliferation of decentralized applications based on smart contracts, a need for a deeper understanding arises. We structure the field that we term distributed ledger analytics.
Sam M. Werner, Daniel Pérez, Lewis Gudgeon, Ariah Klages‐Mundt · 6 authors
Decentralized Finance (DeFi), a blockchain powered peer-to-peer financial system, is mushrooming. Two years ago the total value locked in DeFi systems was approximately 700m USD, now, as of April 2022, it stands at around 150bn USD. The frenetic evolution of the ecosystem has created challenges in understanding the basic principles of these systems and their security risks. In this Systematization of Knowledge (SoK) we delineate the DeFi ecosystem along the following axes: its primitives, its operational protocol types and its security. We provide a distinction between technical security, which has a healthy literature, and economic security, which is largely unexplored, connecting the latter with new models and thereby synthesizing insights from computer science, economics and finance. Finally, we outline the open research challenges in the ecosystem across these security types.
Financial regulators have long-standing concerns about fully decentralized exchanges that run 'on-chain' without any obvious regulatory hooks. The popularity of Uniswap, an automated market makers (AMM), made these concerns a reality. AMMs implement a lightweight dealer-based trading system, but they are unlike anything on Wall Street, require fees intrinsically, and are susceptible to front-running attacks. This leaves the following research questions we address in this paper: (1) are conventional (i.e., order books), secure (i.e., resistant to front-running and price manipulation) and fully decentralized exchanges feasible on a public blockchain like Ethereum, (2) what is the performance profile, and (3) how much do Layer 2 techniques (e.g., Arbitrum) increase performance? To answer these questions, we implement, benchmark, and experiment with an Ethereum-based call market exchange called Lissy. We confirm the functionality is too heavy for Ethereum today (you cannot expect to exceed a few hundred trade executions per block) but show it scales dramatically (99.88% gas cost reduction) on Arbitrum.
This paper presents EDSC, a novel smart contract platform design based on the event-driven execution model as opposed to the traditionally employed transaction-driven execution model. We reason that such a design is a better fit for many emerging smart contract applications and is better positioned to address the scalability and performance challenges plaguing the smart contract ecosystem. We propose EDSC's design under the Ethereum framework, and the design can be easily adapted for other existing smart contract platforms. We have conducted implementation using Ethereum client and experiments where performance modeling results show on average 2.2 to 4.6 times reduced total latency of event triggered smart contracts, which demonstrates its effectiveness for supporting contracts that demand timely execution based on events. In addition, we discuss example use cases to demonstrate the design's utility and comment on its potential security dynamics.
Atefeh Mashatan, Victoria L. Lemieux, Seung Hwan Lee, Przemysław Szufel · 5 authors
This paper discusses the problem of double-ending fraud in real estate transactions – a type of transactional fraud wherein agents handling real estate transactions unfairly benefit (e.g., by simultaneously representing both the buy and sell side of a real estate transaction in a manner that unfairly boosts the commission they receive, or colluding to increase their commission in a real estate transaction at the expense of the buyer and/or seller of the real property). The paper proposes a unique blockchain solution design that leverages blockchain's properties of transparency and ability to create tamper-resistant audit trails to reduce opportunities for double-ending fraud and increase real estate market participants' trust in the handling of their transactions. The paper discusses the implementation of a prototype of the solution based on hyperledger fabric and sails; it presents the results of an agent-based modelling simulation validating that the inherent transparency of the proposed design offers optimal allocation for both sellers and buyers.
Stefan Dziembowski, Grzegorz Fabiański, Sebastian Faust, Siavash Riahi
Blockchain is a disruptive new technology introduced around a decade ago. It can be viewed as a method for recording timestamped transactions in a public database. Most of blockchain protocols do not scale well, i.e., they cannot process quickly large amounts of transactions. A natural idea to deal with this problem is to use the blockchain only as a timestamping service, i.e., to hash several transactions tx_1,…,tx_m into one short string, and just put this string on the blockchain, while at the same time posting the hashed transactions tx_1,…,tx_m to some public place on the Internet ("off-chain"). In this way the transactions tx_i remain timestamped, but the amount of data put on the blockchain is greatly reduced. This idea was introduced in 2017 under the name Plasma by Poon and Buterin. Shortly after this proposal, several variants of Plasma have been proposed. They are typically built on top of the Ethereum blockchain, as they strongly rely on so-called smart contracts (in order to resolve disputes between the users if some of them start cheating). Plasmas are an example of so-called off-chain protocols. In this work we initiate the study of the inherent limitations of Plasma protocols. More concretely, we show that in every Plasma system the adversary can either (a) force the honest parties to communicate a lot with the blockchain, even though they did not intend to (this is traditionally called mass exit); or (b) an honest party that wants to leave the system needs to quickly communicate large amounts of data to the blockchain. What makes these attacks particularly hard to handle in real life is that these attacks do not have so-called uniquely attributable faults, i.e. the smart contract cannot determine which party is malicious, and hence cannot force it to pay the fees for the blockchain interaction. An important implication of our result is that the benefits of two of the most prominent Plasma types, called Plasma Cash and Fungible Plasma, cannot be achieved simultaneously. Besides of the direct implications on real-life cryptocurrency research, we believe that this work may open up a new line of theoretical research, as, up to our knowledge, this is the first work that provides an impossibility result in the area of off-chain protocols.
In river systems, costly upstream pollution abatement creates downstream welfare gains. Absent adequate agreement on how to share the gains, upstream regions lack incentives to reduce pollution levels. We develop a model that makes explicit the impact of water quality on production benefits and suggest a solution for sharing the gains of optimal pollution abatement, namely the Shapley value of an underlying convex cooperative game. We provide a decentralized implementation through a smart contract to automate negotiations and payments. In effect, it ensures a socially optimal agreement supported by fair compensations to regions that turn to cleaner production from those that pollute.
When economic agents have private information, the agents will be incentivised to use this information advantage by acting in a manner that does not always coincide with production and social efficiency, or the interests of the principal. This thesis investigates details specific to designing a contract with blockchain technology and smart contracts that consistently elicit efficiency and good behaviour with the best possible outcome for participating agents. We use the lens of the principal agent theory to show that implementing blockchain technology and smart contracts in contractual agreements can alleviate problems associated with information asymmetry that arise when one party holds its information private. Information asymmetry has a significant economic impact in principal agent relationships.
Using data from one of the first and most popular decentralized lending protocols, MakerDao, we study whether computer-language-based information lends itself for the efficient use of information in a market that features real-time transparency. We first find that there is persistent cross-sectional difference in performance, where persistence increases with investors sophistication. We then study how different types of processing costs affect the extent to which investors use past loan performance to mimic experts in real time (i.e., efficient mimicking). Our results show that awareness costs, proxied by loan activity level, hinder efficient mimicking. More importantly, acquisition and integration costs associated with translating code-based information into useful trading signals impedes investors’ ability to take advantage of information embedded in smart contracts. Our paper has important implications for regulators and practitioners aiming at more efficient use of information in smart contracts and on blockchain.
How might modern settlement systems with distributed ledger technology achieve zero settlement risk? We consider the design of settlement systems that satisfies two integral features: information-leakage proof and zero settlement risk. Legacy settlement systems partition private information but are vulnerable to settlement fails. A token system with dynamic ownership representation, or a dynamic ledger, can be designed to achieve both, as long as it employs a protocol that enforces two restrictions: programs must be immediately implemented and must involve transactions based on verifiable claims. We show how such a system can support various arrangements, including insurance, derivatives, collateralized loans, and securitization.