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Incentive Compatibility of Ethereum’s PoS Consensus Protocol

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

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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

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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.

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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

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

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