Document Open Access Logo

Incentive Compatibility of Ethereum’s PoS Consensus Protocol

Authors Ulysse Pavloff , Yackolley Amoussou-Guenou , Sara Tucci-Piergiovanni

PDF
Thumbnail PDF

File

LIPIcs.OPODIS.2024.7.pdf
  • Filesize: 0.81 MB
  • 23 pages

Document Identifiers

Author Details

Ulysse Pavloff
  • Université Paris-Saclay, CEA, LIST, Palaiseau, France
Yackolley Amoussou-Guenou
  • Université Paris-Panthéon-Assas, CRED, Paris, France
Sara Tucci-Piergiovanni
  • Université Paris-Saclay, CEA, LIST, Palaiseau, France

Cite As Get BibTex

Ulysse Pavloff, Yackolley Amoussou-Guenou, and Sara Tucci-Piergiovanni. Incentive Compatibility of Ethereum’s PoS Consensus Protocol. In 28th International Conference on Principles of Distributed Systems (OPODIS 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 324, pp. 7:1-7:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024) https://doi.org/10.4230/LIPIcs.OPODIS.2024.7

Abstract

This paper investigates whether following the fork-choice rule in the Ethereum PoS consensus protocol constitutes a Nash equilibrium - i.e., whether the protocol that maintains the canonical chain in Ethereum is incentive-compatible. Specifically, we explore whether selfish participants may attempt to manipulate the fork-choice rule by forking out previous blocks and capturing the rewards associated with those blocks. Our analysis considers two strategies for participants: the obedient strategy, which adheres to the prescribed protocol, and the cunning strategy, which attempts to manipulate the fork-choice rule to gain more rewards. We evaluate the conditions under which selfish participants might deviate from the obedient strategy. We found that, in a synchronous system, following the prescribed fork-choice rule is incentive-compatible. However, in an eventually synchronous system, the protocol is eventually incentive-compatible - that is, only a limited number of proposers will find it profitable to fork the chain during the synchronous period. After this sequence of cunning proposers, subsequent proposers will find it more profitable to follow the protocol.

Subject Classification

ACM Subject Classification
  • Theory of computation → Distributed algorithms
  • Computer systems organization → Dependable and fault-tolerant systems and networks
Keywords
  • Ethereum PoS
  • Game Theory
  • Block Reward

Metrics

  • Access Statistics
  • Total Accesses (updated on a weekly basis)
    0
    PDF Downloads
    0
    Metadata Views

References

  1. Ittai Abraham, Lorenzo Alvisi, and Joseph Y. Halpern. Distributed computing meets game theory: combining insights from two fields. SIGACT News, 42(2):69-76, 2011. URL: https://doi.org/10.1145/1998037.1998055.
  2. Ittai Abraham, Danny Dolev, Rica Gonen, and Joseph Y. Halpern. Distributed computing meets game theory: robust mechanisms for rational secret sharing and multiparty computation. In Eric Ruppert and Dahlia Malkhi, editors, Proceedings of the Twenty-Fifth Annual ACM Symposium on Principles of Distributed Computing, PODC 2006, Denver, CO, USA, July 23-26, 2006, pages 53-62. ACM, 2006. URL: https://doi.org/10.1145/1146381.1146393.
  3. Ittai Abraham, Dahlia Malkhi, Kartik Nayak, Ling Ren, and Alexander Spiegelman. Solidus: An incentive-compatible cryptocurrency based on permissionless byzantine consensus. CoRR, abs/1612.02916, 2016. URL: https://arxiv.org/abs/1612.02916.
  4. Amitanand S. Aiyer, Lorenzo Alvisi, Allen Clement, Michael Dahlin, Jean-Philippe Martin, and Carl Porth. BAR fault tolerance for cooperative services. In Andrew Herbert and Kenneth P. Birman, editors, Proceedings of the 20th ACM Symposium on Operating Systems Principles 2005, SOSP 2005, Brighton, UK, October 23-26, 2005, pages 45-58. ACM, 2005. URL: https://doi.org/10.1145/1095810.1095816.
  5. Yackolley Amoussou-Guenou, Bruno Biais, Maria Potop-Butucaru, and Sara Tucci-Piergiovanni. Rational behaviors in committee-based blockchains. In 24th International Conference on Principles of Distributed Systems, OPODIS 2020, December 14-16, 2020, Strasbourg, France (Virtual Conference), volume 184 of LIPIcs, pages 12:1-12:16. Schloss Dagstuhl - Leibniz-Zentrum für Informatik, 2020. URL: https://doi.org/10.4230/LIPICS.OPODIS.2020.12.
  6. Yackolley Amoussou-Guenou, Bruno Biais, Maria Potop-Butucaru, and Sara Tucci-Piergiovanni. Rational vs byzantine players in consensus-based blockchains. In Amal El Fallah Seghrouchni, Gita Sukthankar, Bo An, and Neil Yorke-Smith, editors, Proceedings of the 19th International Conference on Autonomous Agents and Multiagent Systems, AAMAS '20, Auckland, New Zealand, May 9-13, 2020, pages 43-51. International Foundation for Autonomous Agents and Multiagent Systems, 2020. URL: https://doi.org/10.5555/3398761.3398772.
  7. Yackolley Amoussou-Guenou, Antonella Del Pozzo, Maria Potop-Butucaru, and Sara Tucci-Piergiovanni. Dissecting tendermint. In Networked Systems - 7th International Conference, NETYS 2019, Marrakech, Morocco, June 19-21, 2019, Revised Selected Papers, volume 11704 of Lecture Notes in Computer Science, pages 166-182. Springer, 2019. URL: https://doi.org/10.1007/978-3-030-31277-0_11.
  8. Lacramioara Astefanoaei, Pierre Chambart, Antonella Del Pozzo, Thibault Rieutord, Sara Tucci Piergiovanni, and Eugen Zalinescu. Tenderbake - A solution to dynamic repeated consensus for blockchains. In Vincent Gramoli and Mohammad Sadoghi, editors, 4th International Symposium on Foundations and Applications of Blockchain 2021, FAB 2021, May 7, 2021, University of California, Davis, California, USA (Virtual Conference), volume 92 of OASIcs, pages 1:1-1:23. Schloss Dagstuhl - Leibniz-Zentrum für Informatik, 2021. URL: https://doi.org/10.4230/OASICS.FAB.2021.1.
  9. Bruno Biais, Christophe Bisiere, Matthieu Bouvard, and Catherine Casamatta. The blockchain folk theorem. The Review of Financial Studies, 32(5):1662-1715, 2019. Google Scholar
  10. Ethan Buchman, Jae Kwon, and Zarko Milosevic. The latest gossip on BFT consensus. CoRR, abs/1807.04938, 2018. URL: https://arxiv.org/abs/1807.04938.
  11. Vitalik Buterin and Virgil Griffith. Casper the friendly finality gadget. CoRR, abs/1710.09437, 2017. URL: https://arxiv.org/abs/1710.09437.
  12. Vitalik Buterin, Diego Hernandez, Thor Kamphefner, Khiem Pham, Zhi Qiao, Danny Ryan, Juhyeok Sin, Ying Wang, and Yan X. Zhang. Combining GHOST and casper. CoRR, abs/2003.03052, 2020. URL: https://arxiv.org/abs/2003.03052.
  13. Miles Carlsten, Harry A. Kalodner, S. Matthew Weinberg, and Arvind Narayanan. On the instability of bitcoin without the block reward. In Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security, Vienna, Austria, October 24-28, 2016, pages 154-167. ACM, 2016. URL: https://doi.org/10.1145/2976749.2978408.
  14. Francesco D'Amato, Joachim Neu, Ertem Nusret Tas, and David Tse. Goldfish: No more attacks on ethereum?! In Financial Cryptography and Data Security - 28th International Conference, FC 2024, Willemstad, Curaçao, Lecture Notes in Computer Science. Springer, 2024. Google Scholar
  15. Ittay Eyal and Emin Gün Sirer. Majority is not enough: Bitcoin mining is vulnerable. In Nicolas Christin and Reihaneh Safavi-Naini, editors, Financial Cryptography and Data Security - 18th International Conference, FC 2014, Christ Church, Barbados, March 3-7, 2014, Revised Selected Papers, volume 8437 of Lecture Notes in Computer Science, pages 436-454. Springer, 2014. URL: https://doi.org/10.1007/978-3-662-45472-5_28.
  16. Mehdi Fooladgar, Mohammad Hossein Manshaei, Murtuza Jadliwala, and Mohammad Ashiqur Rahman. On incentive compatible role-based reward distribution in algorand. In 50th Annual IEEE/IFIP International Conference on Dependable Systems and Networks, DSN 2020, Valencia, Spain, June 29 - July 2, 2020, pages 452-463. IEEE, 2020. URL: https://doi.org/10.1109/DSN48063.2020.00059.
  17. Cyril Grunspan and Ricardo Pérez-Marco. Selfish mining in ethereum. In 2nd International Conference on Mathematical Research for Blockchain Economy, MARBLE 2020, online, August 24, 2020, Springer Proceedings in Business and Economics, pages 65-90. Springer, 2020. URL: https://doi.org/10.1007/978-3-030-53356-4_5.
  18. Joseph Y. Halpern and Xavier Vilaça. Rational consensus: Extended abstract. In Proceedings of the 2016 ACM Symposium on Principles of Distributed Computing, PODC 2016, Chicago, IL, USA, July 25-28, 2016, pages 137-146. ACM, 2016. URL: https://doi.org/10.1145/2933057.2933088.
  19. Dimitris Karakostas, Aggelos Kiayias, and Thomas Zacharias. Blockchain nash dynamics and the pursuit of compliance. In Maurice Herlihy and Neha Narula, editors, Proceedings of the 4th ACM Conference on Advances in Financial Technologies, AFT 2022, Cambridge, MA, USA, September 19-21, 2022, pages 281-293. ACM, 2022. URL: https://doi.org/10.1145/3558535.3559781.
  20. Abhiram Kothapalli, Andrew Miller, and Nikita Borisov. Smartcast: An incentive compatible consensus protocol using smart contracts. In Financial Cryptography and Data Security - FC 2017 International Workshops, WAHC, BITCOIN, VOTING, WTSC, and TA, Sliema, Malta, April 7, 2017, Revised Selected Papers, volume 10323 of Lecture Notes in Computer Science, pages 536-552. Springer, 2017. URL: https://doi.org/10.1007/978-3-319-70278-0_34.
  21. Cosimo Laneve, Sergio Solmonte, and Adele Veschetti. A stochastic analysis of the gasper protocol. In IEEE International Conference on Pervasive Computing and Communications Workshops and other Affiliated Events, PerCom 2024 - Workshops, Biarritz, France, March 11-15, 2024, pages 518-523. IEEE, 2024. URL: https://doi.org/10.1109/PERCOMWORKSHOPS59983.2024.10502866.
  22. Ryuya Nakamura. Prevention of bouncing attack on ffg, 2019. URL: https://ethresear.ch/t/prevention-of-bouncing-attack-on-ffg/6114.
  23. Kartik Nayak, Srijan Kumar, Andrew Miller, and Elaine Shi. Stubborn mining: Generalizing selfish mining and combining with an eclipse attack. In IEEE European Symposium on Security and Privacy, EuroS&P 2016, Saarbrücken, Germany, March 21-24, 2016, pages 305-320. IEEE, 2016. URL: https://doi.org/10.1109/EUROSP.2016.32.
  24. Joachim Neu, Ertem Nusret Tas, and David Tse. Ebb-and-flow protocols: A resolution of the availability-finality dilemma. In 42nd IEEE Symposium on Security and Privacy, SP 2021, San Francisco, CA, USA, 24-27 May 2021, pages 446-465. IEEE, 2021. URL: https://doi.org/10.1109/SP40001.2021.00045.
  25. Joachim Neu, Ertem Nusret Tas, and David Tse. Two more attacks on proof-of-stake ghost/ethereum. In Jorge M. Soares, Dawn Song, and Marko Vukolic, editors, Proceedings of the 2022 ACM Workshop on Developments in Consensus, ConsensusDay 2022, Los Angeles, CA, USA, 7 November 2022, pages 43-52. ACM, 2022. URL: https://doi.org/10.1145/3560829.3563560.
  26. Ulysse Pavloff, Yackolley Amoussou-Guenou, and Sara Tucci Piergiovanni. Ethereum proof-of-stake under scrutiny. In Proceedings of the 38th ACM/SIGAPP Symposium on Applied Computing, SAC 2023, Tallinn, Estonia, March 27-31, 2023, pages 212-221. ACM, 2023. URL: https://doi.org/10.1145/3555776.3577655.
  27. Ulysse Pavloff, Yackolley Amoussou-Guenou, and Sara Tucci Piergiovanni. Byzantine attacks exploiting penalties in ethereum pos. In 54th Annual IEEE/IFIP International Conference on Dependable Systems and Networks, DSN 2024, Brisbane, Australia, June 24-27, 2024, pages 53-65. IEEE, 2024. URL: https://doi.org/10.1109/DSN58291.2024.00020.
  28. Ayelet Sapirshtein, Yonatan Sompolinsky, and Aviv Zohar. Optimal selfish mining strategies in bitcoin. In Financial Cryptography and Data Security - 20th International Conference, FC 2016, Christ Church, Barbados, February 22-26, 2016, Revised Selected Papers, volume 9603 of Lecture Notes in Computer Science, pages 515-532. Springer, 2016. URL: https://doi.org/10.1007/978-3-662-54970-4_30.
  29. Caspar Schwarz-Schilling, Joachim Neu, Barnabé Monnot, Aditya Asgaonkar, Ertem Nusret Tas, and David Tse. Three attacks on proof-of-stake ethereum. In Ittay Eyal and Juan A. Garay, editors, Financial Cryptography and Data Security - 26th International Conference, FC 2022, Grenada, May 2-6, 2022, Revised Selected Papers, volume 13411 of Lecture Notes in Computer Science, pages 560-576. Springer, 2022. URL: https://doi.org/10.1007/978-3-031-18283-9_28.
  30. Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan, Nihar Shah, and Barnabé Monnot. Time is money: Strategic timing games in proof-of-stake protocols. In 5th Conference on Advances in Financial Technologies, AFT 2023, October 23-25, 2023, Princeton, NJ, USA, volume 282 of LIPIcs, pages 30:1-30:17. Schloss Dagstuhl - Leibniz-Zentrum für Informatik, 2023. URL: https://doi.org/10.4230/LIPICS.AFT.2023.30.
  31. Itay Tsabary and Ittay Eyal. The gap game. In Proceedings of the 2018 ACM SIGSAC Conference on Computer and Communications Security, CCS 2018, Toronto, ON, Canada, October 15-19, 2018, pages 713-728. ACM, 2018. URL: https://doi.org/10.1145/3243734.3243737.
  32. Mingfei Zhang, Rujia Li, and Sisi Duan. Max attestation matters: Making honest parties lose their incentives in ethereum pos. IACR Cryptol. ePrint Arch., page 1622, 2023. URL: https://eprint.iacr.org/2023/1622.
  33. Roi Bar Zur, Ittay Eyal, and Aviv Tamar. Efficient mdp analysis for selfish-mining in blockchains. In Proceedings of the 2nd ACM Conference on Advances in Financial Technologies, AFT '20, pages 113-131, New York, NY, USA, 2020. Association for Computing Machinery. URL: https://doi.org/10.1145/3419614.3423264.
Questions / Remarks / Feedback
X

Feedback for Dagstuhl Publishing


Thanks for your feedback!

Feedback submitted

Could not send message

Please try again later or send an E-mail
© 2023-2024 Schloss Dagstuhl – LZI GmbH About DROPS Imprint Privacy Contact