13 Search Results for "Bahrani, Maryam"

Document
DOI: 10.4230/LIPIcs.ITCS.2026.65
Characterizing Off-Chain Influence Proof Transaction Fee Mechanisms

Authors: Aadityan Ganesh, Clayton Thomas, and S. Matthew Weinberg

Published in: LIPIcs, Volume 362, 17th Innovations in Theoretical Computer Science Conference (ITCS 2026)

Abstract
Roughgarden [Roughgarden, 2020] initiates the study of Transaction Fee Mechanisms (TFMs), and posits that the on-chain game of a "good" TFM should be on-chain simple (OnC-S), i.e., incentive compatible for both the users and the miner. Recent work of Ganesh, Thomas an Weinberg [Ganesh et al., 2024] posit that they should additionally be Off-Chain Influence-Proof (OffC-IP), which means that the miner cannot achieve any additional revenue by separately conducting an off-chain auction to determine on-chain inclusion. They observe that a cryptographic second-price auction satisfies both properties, but leave open the question of whether other mechanisms (such as those not dependent on cryptography) satisfy these properties. In this paper, we characterize OffC-IP TFMs: They are those satisfying a burn identity relating the burn rule to the allocation rule. In particular, we show that auction is OffC-IP if and only if its (induced direct-revelation) allocation rule X̄(⋅) and burn rule B̅(⋅) (both of which take as input users' values v₁, … , v_n) are truthful when viewing (X̄(⋅), B̅(⋅)) as the allocation and pricing rule of a multi-item auction for a single additive buyer with values (φ(v₁),…, φ(v_n)) equal to the users' virtual values. Building on this burn identity, we characterize OffC-IP and OnC-S TFMs that are deterministic and do not use cryptography: They are posted-price mechanisms with specially-tuned burns. As a corollary, we show that such TFMs can only exist with infinite supply and prior-dependence. However, we show that for randomized TFMs, there are additional OnC-S and OffC-IP auctions that do not use cryptography (even when there is {finite} supply, under prior-dependence with a bounded prior distribution). Holistically, our results show that while OffC-IP is a fairly stringent requirement, families of OffC-IP mechanisms can be found for a variety of settings.
Cite as

Aadityan Ganesh, Clayton Thomas, and S. Matthew Weinberg. Characterizing Off-Chain Influence Proof Transaction Fee Mechanisms. In 17th Innovations in Theoretical Computer Science Conference (ITCS 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 362, pp. 65:1-65:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{ganesh_et_al:LIPIcs.ITCS.2026.65,
  author =	{Ganesh, Aadityan and Thomas, Clayton and Weinberg, S. Matthew},
  title =	{{Characterizing Off-Chain Influence Proof Transaction Fee Mechanisms}},
  booktitle =	{17th Innovations in Theoretical Computer Science Conference (ITCS 2026)},
  pages =	{65:1--65:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-410-9},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{362},
  editor =	{Saraf, Shubhangi},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2026.65},
  URN =		{urn:nbn:de:0030-drops-253527},
  doi =		{10.4230/LIPIcs.ITCS.2026.65},
  annote =	{Keywords: Transaction Fee Mechanism Design, Off-Chain Influence Proofness, Blockchain, Decentralized Finance, Simple Auctions}
}
Document
DOI: 10.4230/LIPIcs.ITCS.2026.93
Analyzing the Economic Impact of Decentralization on Users

Authors: Amit Levy, S. Matthew Weinberg, and Chenghan Zhou

Published in: LIPIcs, Volume 362, 17th Innovations in Theoretical Computer Science Conference (ITCS 2026)

Abstract
We model the ultimate price paid by users of a decentralized ledger as resulting from a two-stage game where Miners (/Proposers/etc.) first purchase blockspace via a Tullock contest, and then price that space to users. When analyzing our distributed ledger model, we find: - A characterization of all possible pure equilibria (although pure equilibria are not guaranteed to exist). - A natural sufficient condition, implied by Regularity (à la [Myerson, 1981]), for existence of a "market-clearing" pure equilibrium where Miners choose to sell all space allocated by the Distributed Ledger Protocol, and that this equilibrium is unique. - The market share of the largest miner is the relevant "measure of decentralization" to determine whether a market-clearing pure equilibrium exists. - Block rewards do not impact users' prices at equilibrium, when pure equilibria exist. But, higher block rewards can cause pure equilibria to exist. We also discuss aspects of our model and how they relate to blockchains deployed in practice. For example, only "patient" users (who are happy for their transactions to enter the blockchain under any miner) would enjoy the conclusions highlighted by our model, whereas "impatient" users (who are interested only for their transaction to be included in the very next block) still face monopoly pricing.
Cite as

Amit Levy, S. Matthew Weinberg, and Chenghan Zhou. Analyzing the Economic Impact of Decentralization on Users. In 17th Innovations in Theoretical Computer Science Conference (ITCS 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 362, pp. 93:1-93:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{levy_et_al:LIPIcs.ITCS.2026.93,
  author =	{Levy, Amit and Weinberg, S. Matthew and Zhou, Chenghan},
  title =	{{Analyzing the Economic Impact of Decentralization on Users}},
  booktitle =	{17th Innovations in Theoretical Computer Science Conference (ITCS 2026)},
  pages =	{93:1--93:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-410-9},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{362},
  editor =	{Saraf, Shubhangi},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2026.93},
  URN =		{urn:nbn:de:0030-drops-253805},
  doi =		{10.4230/LIPIcs.ITCS.2026.93},
  annote =	{Keywords: Blockchain, Cryptocurrency, Blockspace Markets, Decentralization, Distributed Ledgers, Equilibrium Analysis, Tullock Contests}
}
Document
DOI: 10.4230/LIPIcs.OPODIS.2025.36
BlindPerm: Efficient MEV Mitigation with an Encrypted Mempool and Permutation

Authors: Alireza Kavousi, Duc V. Le, Philipp Jovanovic, and George Danezis

Published in: LIPIcs, Volume 361, 29th International Conference on Principles of Distributed Systems (OPODIS 2025)

Abstract
Maximal Extractable Value (MEV) is a crucial challenge in blockchains and cryptocurrencies. A principal countermeasure is using encrypted mempools to hide the transaction payloads until they are committed in a block. However, the existing approaches based on encrypted mempools remain vulnerable to metadata leakage and may not provide sufficient mitigation against block producers due to their sole control in block preparation. In this paper, we propose techniques that utilize randomized permutation on the committed block, offering a multi-layer solution. With a focus on proof-of-stake (PoS) committee-based consensus, we then introduce BlindPerm, a framework that enhances an encrypted mempool with permutation and present various optimizations. Notably, we propose a construction where this enhancement comes at essentially no overhead by piggybacking on the encrypted mempool and without relying on any external entity such as randomness beacon. Further, we illustrate the effectiveness of our solutions by running simulations using historical Ethereum data.
Cite as

Alireza Kavousi, Duc V. Le, Philipp Jovanovic, and George Danezis. BlindPerm: Efficient MEV Mitigation with an Encrypted Mempool and Permutation. In 29th International Conference on Principles of Distributed Systems (OPODIS 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 361, pp. 36:1-36:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{kavousi_et_al:LIPIcs.OPODIS.2025.36,
  author =	{Kavousi, Alireza and Le, Duc V. and Jovanovic, Philipp and Danezis, George},
  title =	{{BlindPerm: Efficient MEV Mitigation with an Encrypted Mempool and Permutation}},
  booktitle =	{29th International Conference on Principles of Distributed Systems (OPODIS 2025)},
  pages =	{36:1--36:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-409-3},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{361},
  editor =	{Arusoaie, Andrei and Onica, Emanuel and Spear, Michael and Tucci-Piergiovanni, Sara},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.OPODIS.2025.36},
  URN =		{urn:nbn:de:0030-drops-252091},
  doi =		{10.4230/LIPIcs.OPODIS.2025.36},
  annote =	{Keywords: Encrypted mempool, maximal extractable value, distributed systems}
}
Document
DOI: 10.4230/LIPIcs.AFT.2025.7
Mechanism Design for Automated Market Makers

Authors: T-H. Hubert Chan, Ke Wu, and Elaine Shi

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

Abstract
Blockchains have popularized automated market makers (AMMs), applications that run on a blockchain, maintain a pool of crypto-assets, and execute trades with users governed by some pricing function. AMMs have also introduced a significant challenge known as the Miner Extractable Value (MEV). Specifically, miners who control the contents and sequencing of transactions in a block can extract value by front-running and back-running users' transactions, creating arbitrage opportunities that guarantee them risk-free returns. MEV not only harms ordinary users, but more critically, encourages miners to auction off favorable transaction placements to users and arbitragers. This has fostered a more centralized off-chain eco-system, departing from the decentralized equilibrium originally envisioned for the blockchain infrastructure layer. In this paper, we consider how to design AMM mechanisms that eliminate MEV opportunities. Specifically, we propose a new AMM mechanism that processes all transactions contained within a block according to some pre-defined rules, ensuring that some constant potential function is maintained after processing the batch. We show that our new mechanism satisfies two tiers of guarantees. First, for legacy blockchains where each block is proposed by a single (possibly rotating) miner, we prove that our mechanism satisfies arbitrage resilience, i.e., a miner cannot gain risk-free profit. Second, for blockchains where the block proposal process is decentralized and offers sequencing-fairness, we prove a strictly stronger notion called strategy proofness - roughly speaking, we guarantee that any individual user’s best response is to follow the honest strategy. Our results complement prior works on MEV resilience in the following senses. First, prior works have shown impossibilities to address MEV entirely at the consensus level. Our work demonstrates a new paradigm of mechanism design at the application (i.e., smart contract) layer to ensure provable guarantees of strategy proofness. Second, many works have attempted to augment the underlying consensus protocol with extra properties such as sequencing fairness. While most previous works heuristically argued why these extra properties help to mitigate MEV, our work demonstrates in a mathematically formal manner how to leverage such consensus-level properties to aid the design of strategy-proof mechanisms.
Cite as

T-H. Hubert Chan, Ke Wu, and Elaine Shi. Mechanism Design for Automated Market Makers. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 7:1-7:22, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{chan_et_al:LIPIcs.AFT.2025.7,
  author =	{Chan, T-H. Hubert and Wu, Ke and Shi, Elaine},
  title =	{{Mechanism Design for Automated Market Makers}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{7:1--7:22},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.7},
  URN =		{urn:nbn:de:0030-drops-247265},
  doi =		{10.4230/LIPIcs.AFT.2025.7},
  annote =	{Keywords: Mechanism design, game theory, strategy proof, blockchain}
}
Document
DOI: 10.4230/LIPIcs.AFT.2025.21
Pool Formation in Oceanic Games: Shapley Value and Proportional Sharing

Authors: Aggelos Kiayias, Elias Koutsoupias, Evangelos Markakis, and Panagiotis Tsamopoulos

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

Abstract
We study a game-theoretic model for pool formation in Proof of Stake blockchain protocols. In such systems, stakeholders can form pools as a means of obtaining regular rewards from participation in ledger maintenance, with the power of each pool being dependent on its collective stake. The question we are interested in is the design of mechanisms, i.e., "reward sharing schemes," that suitably split rewards among pool members and achieve favorable properties in the resulting pool configuration. With this in mind, we initiate a non-cooperative game-theoretic analysis of the well known Shapley value scheme from cooperative game theory into the context of blockchains. In particular, we focus on the oceanic model of games, proposed by Milnor and Shapley (1978), which is suitable for populations where a small set of large players coexists with a big mass of rather small, negligible players. This provides an appropriate level of abstraction for pool formation processes that occur among the stakeholders of a blockchain. We provide comparisons between the Shapley mechanism and the more standard proportional scheme, in terms of attained decentralization, via a Price of Stability analysis and in terms of susceptibility to Sybil attacks, i.e., the strategic splitting of a players' stake with the intention of participating in multiple pools for increased profit. Interestingly, while the widely deployed proportional scheme appears to have certain advantages, the Shapley value scheme, which rewards higher the most pivotal players, emerges as a competitive alternative, by being able to bypass some of the downsides of proportional sharing in terms of Sybil attack susceptibility, while also not being far from optimal guarantees w.r.t. decentralization. Finally, we also complement our study with some variations of proportional sharing, where the profit is split in proportion to a superadditive or a subadditive function of the stake, showing that our results for the Shapley value scheme are maintained in comparison to these functions as well.
Cite as

Aggelos Kiayias, Elias Koutsoupias, Evangelos Markakis, and Panagiotis Tsamopoulos. Pool Formation in Oceanic Games: Shapley Value and Proportional Sharing. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 21:1-21:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{kiayias_et_al:LIPIcs.AFT.2025.21,
  author =	{Kiayias, Aggelos and Koutsoupias, Elias and Markakis, Evangelos and Tsamopoulos, Panagiotis},
  title =	{{Pool Formation in Oceanic Games: Shapley Value and Proportional Sharing}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{21:1--21:24},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.21},
  URN =		{urn:nbn:de:0030-drops-247409},
  doi =		{10.4230/LIPIcs.AFT.2025.21},
  annote =	{Keywords: Shapley value, Nash equilibria, Price of Stability, Reward sharing schemes, Proof of Stake blockchains}
}
Document
DOI: 10.4230/LIPIcs.AFT.2025.24
Multidimensional Blockchain Fees Are (Essentially) Optimal

Authors: Guillermo Angeris, Theo Diamandis, and Ciamac Moallemi

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

Abstract
In this paper we show that, using only mild assumptions, dynamic multidimensional blockchain fee markets have strong performance guarantees, even against worst-case adversaries. In particular, we show that the average welfare gap between the following two scenarios is at most O(1/√T), where T is the length of the time horizon considered. In the first scenario, the designer knows all future actions by users and is allowed to fix the optimal prices of resources ahead of time, based on the designer’s oracular knowledge of those actions. In the second, the prices are updated by a very simple algorithm that does not have this oracular knowledge, special cases of which are EIP-4844 and EIP-1559, both fee mechanisms used by the Ethereum blockchain. Roughly speaking, this means that, on average, over a reasonable timescale, there is no difference in welfare between "correctly" fixing the prices, with oracular knowledge of the future, when compared to the proposed algorithm. We show a matching lower bound of Ω(1/√T) for any implementable algorithm and also separately consider the case where the adversary is known to be stochastic.
Cite as

Guillermo Angeris, Theo Diamandis, and Ciamac Moallemi. Multidimensional Blockchain Fees Are (Essentially) Optimal. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 24:1-24:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{angeris_et_al:LIPIcs.AFT.2025.24,
  author =	{Angeris, Guillermo and Diamandis, Theo and Moallemi, Ciamac},
  title =	{{Multidimensional Blockchain Fees Are (Essentially) Optimal}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{24:1--24:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.24},
  URN =		{urn:nbn:de:0030-drops-247433},
  doi =		{10.4230/LIPIcs.AFT.2025.24},
  annote =	{Keywords: Blockchains, transaction fees, online optimization, convex optimization}
}
Document
DOI: 10.4230/LIPIcs.AFT.2025.23
Transaction Fee Market Design for Parallel Execution

Authors: Bahar Acilan, Andrei Constantinescu, Lioba Heimbach, and Roger Wattenhofer

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

Abstract
Given the low throughput of blockchains like Bitcoin and Ethereum, scalability - the ability to process an increasing number of transactions - has become a central focus of blockchain research. One promising approach is the parallelization of transaction execution across multiple threads. However, achieving efficient parallelization requires a redesign of the incentive structure within the fee market. Currently, the fee market does not differentiate between transactions that access multiple high-demand storage keys (i.e., unique identifiers for individual data entries) versus a single low-demand one, as long as they require the same computational effort. Addressing this discrepancy is crucial for enabling more effective parallel execution. In this work, we aim to bridge the gap between the current fee market and the need for parallel execution by exploring alternative fee market designs. To this end, we propose a framework consisting of two key components: a Gas Computation Mechanism (GCM), which quantifies the load a transaction places on the network in terms of parallelization and computation, measured in units of gas, and a Transaction Fee Mechanism (TFM), which assigns a price to each unit of gas. We additionally introduce a set of desirable properties for a GCM, propose several candidate mechanisms, and evaluate them against these criteria. Our analysis highlights two strong candidates: the weighted area GCM, which integrates smoothly with existing TFMs such as EIP‑1559 and satisfies a broad subset of the outlined properties, and the time-proportional makespan GCM, which assigns gas costs based on the context of the entire block’s schedule and, through this dependence on the overall execution outcome, captures the dynamics of parallel execution more accurately.
Cite as

Bahar Acilan, Andrei Constantinescu, Lioba Heimbach, and Roger Wattenhofer. Transaction Fee Market Design for Parallel Execution. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 23:1-23:25, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{acilan_et_al:LIPIcs.AFT.2025.23,
  author =	{Acilan, Bahar and Constantinescu, Andrei and Heimbach, Lioba and Wattenhofer, Roger},
  title =	{{Transaction Fee Market Design for Parallel Execution}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{23:1--23:25},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.23},
  URN =		{urn:nbn:de:0030-drops-247426},
  doi =		{10.4230/LIPIcs.AFT.2025.23},
  annote =	{Keywords: blockchain, transaction fee mechanism, parallel execution}
}
Document
DOI: 10.4230/LIPIcs.AFT.2025.20
Selfish Mining Under General Stochastic Rewards

Authors: Maryam Bahrani, Michael Neuder, and S. Matthew Weinberg

Published in: LIPIcs, Volume 354, 7th Conference on Advances in Financial Technologies (AFT 2025)

Abstract
Selfish miners selectively withhold blocks to earn disproportionately high revenue. The vast majority of the selfish mining literature focuses exclusively on block rewards. [Carlsten et al., 2016] is a notable exception, observing that similar strategic behavior is profitable in a zero-block-reward regime (the endgame for Bitcoin’s quadrennial halving schedule) if miners are compensated with transaction fees alone. Neither model fully captures miner incentives today. The block reward remains 3.125 BTC, yet some blocks yield significantly higher revenue. For example, congestion during the launch of the Babylon protocol in August 2024 caused transaction fees to spike from 0.14 BTC to 9.52 BTC, a 68× increase in fees within two blocks. Our results are both practical and theoretical. Of practical interest, we study selfish mining profitability under a combined reward function that more accurately models miner incentives. This analysis enables us to make quantitative claims about protocol risk (e.g., the mining power at which a selfish strategy becomes profitable is reduced by 22% when optimizing over the combined reward function versus block rewards alone) and qualitative observations (e.g., a miner considering both block rewards and transaction fees will mine more or less aggressively respectively than if they cared about either alone). These practical results follow from our novel model and methodology, which constitute our theoretical contributions. We model general, time-accruing stochastic rewards in the Nakamoto Consensus Game, which requires explicit treatment of difficult adjustment and randomness; we characterize reward function structure through a set of properties (e.g., that rewards accrue only as a function of time since the parent block). We present a new methodology to analytically calculate expected selfish miner rewards under a broad class of stochastic reward functions and validate our method numerically by comparing it with the existing literature and simulating the combined reward sources directly.
Cite as

Maryam Bahrani, Michael Neuder, and S. Matthew Weinberg. Selfish Mining Under General Stochastic Rewards. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 20:1-20:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{bahrani_et_al:LIPIcs.AFT.2025.20,
  author =	{Bahrani, Maryam and Neuder, Michael and Weinberg, S. Matthew},
  title =	{{Selfish Mining Under General Stochastic Rewards}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{20:1--20:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-400-0},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{354},
  editor =	{Avarikioti, Zeta and Christin, Nicolas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2025.20},
  URN =		{urn:nbn:de:0030-drops-247396},
  doi =		{10.4230/LIPIcs.AFT.2025.20},
  annote =	{Keywords: Proof-of-Work, Selfish Mining, MEV}
}
Document
DOI: 10.4230/LIPIcs.ESA.2025.52
Beating Competitive Ratio 4 for Graphic Matroid Secretary

Authors: Kiarash Banihashem, MohammadTaghi Hajiaghayi, Dariusz R. Kowalski, Piotr Krysta, Danny Mittal, and Jan Olkowski

Published in: LIPIcs, Volume 351, 33rd Annual European Symposium on Algorithms (ESA 2025)

Abstract
One of the classic problems in online decision-making is the secretary problem, where the goal is to hire the best secretary out of n rankable applicants or, in a natural extension, to maximize the probability of selecting the largest number from a sequence arriving in random order. Many works have considered generalizations of this problem where one can accept multiple values subject to a combinatorial constraint. The seminal work of Babaioff, Immorlica, Kempe, and Kleinberg (SODA'07, JACM'18) proposed the matroid secretary conjecture, suggesting that there exists an O(1)-competitive algorithm for the matroid constraint, and many works since have attempted to obtain algorithms for both general matroids and specific classes of matroids. The ultimate goal of these results is to obtain an e-competitive algorithm, and the strong matroid secretary conjecture states that this is possible for general matroids. One of the most important classes of matroids is the graphic matroid, where a set of edges in a graph is deemed independent if it contains no cycle. Given the rich combinatorial structure of graphs, obtaining algorithms for these matroids is often seen as a good first step towards solving the problem for general matroids. For matroid secretary, Babaioff et al. (SODA'07, JACM'18) first studied graphic matroid case and obtained a 16-competitive algorithm. Subsequent works have improved the competitive ratio, most recently to 4 by Soto, Turkieltaub, and Verdugo (SODA'18). In this paper, we break the 4-competitive barrier for the problem, obtaining a new algorithm with a competitive ratio of 3.95. For the special case of simple graphs (i.e., graphs that do not contain parallel edges) we further improve this to 3.77. Intuitively, solving the problem for simple graphs is easier as they do not contain cycles of length two. A natural question that arises is whether we can obtain a ratio arbitrarily close to e by assuming the graph has a large enough girth. We answer this question affirmatively, proving that one can obtain a competitive ratio arbitrarily close to e even for constant values of girth, providing further evidence for the strong matroid secretary conjecture. We further show that this bound is tight: for any constant g, one cannot obtain a competitive ratio better than e even if we assume that the input graph has girth at least g. To our knowledge, such a bound was not previously known even for simple graphs.
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Kiarash Banihashem, MohammadTaghi Hajiaghayi, Dariusz R. Kowalski, Piotr Krysta, Danny Mittal, and Jan Olkowski. Beating Competitive Ratio 4 for Graphic Matroid Secretary. In 33rd Annual European Symposium on Algorithms (ESA 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 351, pp. 52:1-52:16, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{banihashem_et_al:LIPIcs.ESA.2025.52,
  author =	{Banihashem, Kiarash and Hajiaghayi, MohammadTaghi and Kowalski, Dariusz R. and Krysta, Piotr and Mittal, Danny and Olkowski, Jan},
  title =	{{Beating Competitive Ratio 4 for Graphic Matroid Secretary}},
  booktitle =	{33rd Annual European Symposium on Algorithms (ESA 2025)},
  pages =	{52:1--52:16},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-395-9},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{351},
  editor =	{Benoit, Anne and Kaplan, Haim and Wild, Sebastian and Herman, Grzegorz},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ESA.2025.52},
  URN =		{urn:nbn:de:0030-drops-245205},
  doi =		{10.4230/LIPIcs.ESA.2025.52},
  annote =	{Keywords: online algorithms, graphic matroids, secretary problem}
}
Document
DOI: 10.4230/LIPIcs.AFT.2024.29
Transaction Fee Mechanism Design in a Post-MEV World

Authors: Maryam Bahrani, Pranav Garimidi, and Tim Roughgarden

Published in: LIPIcs, Volume 316, 6th Conference on Advances in Financial Technologies (AFT 2024)

Abstract
The incentive-compatibility properties of blockchain transaction fee mechanisms have been investigated with passive block producers that are motivated purely by the net rewards earned at the consensus layer. This paper introduces a model of active block producers that have their own private valuations for blocks (representing, for example, additional value derived from the application layer). The block producer surplus in our model can be interpreted as one of the more common colloquial meanings of the phrase "maximal extractable value (MEV)." We first prove that transaction fee mechanism design is fundamentally more difficult with active block producers than with passive ones: With active block producers, no non-trivial or approximately welfare-maximizing transaction fee mechanism can be incentive-compatible for both users and block producers. These results can be interpreted as a mathematical justification for augmenting transaction fee mechanisms with additional components such as order flow auctions, block producer competition, trusted hardware, or cryptographic techniques. We then consider a more fine-grained model of block production that more accurately reflects current practice, in which we distinguish the roles of "searchers" (who actively identify opportunities for value extraction from the application layer and compete for the right to take advantage of them) and "proposers" (who participate directly in the blockchain protocol and make the final choice of the published block). Searchers can effectively act as an "MEV oracle" for a transaction fee mechanism, thereby enlarging the design space. Here, we first consider a TFM that is inspired by how searchers have traditionally been incorporated into the block production process, with each transaction effectively sold off to a searcher through a first-price auction. We then explore the TFM design space with searchers more generally, and design a mechanism that circumvents our impossibility results for TFMs without searchers. Our mechanism (the "SAKA" mechanism) is incentive-compatible (for users, searchers, and the block producer), sybil-proof, and guarantees roughly 50% of the maximum-possible welfare when transaction sizes are small relative to block sizes. We conclude with a matching negative result: even when transaction sizes are small, no DSIC and sybil-proof deterministic TFM can guarantee more than 50% of the maximum-possible welfare.
Cite as

Maryam Bahrani, Pranav Garimidi, and Tim Roughgarden. Transaction Fee Mechanism Design in a Post-MEV World. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 29:1-29:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{bahrani_et_al:LIPIcs.AFT.2024.29,
  author =	{Bahrani, Maryam and Garimidi, Pranav and Roughgarden, Tim},
  title =	{{Transaction Fee Mechanism Design in a Post-MEV World}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{29:1--29:24},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-345-4},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{316},
  editor =	{B\"{o}hme, Rainer and Kiffer, Lucianna},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2024.29},
  URN =		{urn:nbn:de:0030-drops-209658},
  doi =		{10.4230/LIPIcs.AFT.2024.29},
  annote =	{Keywords: MEV, Transaction Fee Mechanisms, Auctions}
}
Document
DOI: 10.4230/LIPIcs.AFT.2024.30
Profitable Manipulations of Cryptographic Self-Selection Are Statistically Detectable

Authors: Linda Cai, Jingyi Liu, S. Matthew Weinberg, and Chenghan Zhou

Published in: LIPIcs, Volume 316, 6th Conference on Advances in Financial Technologies (AFT 2024)

Abstract
Cryptographic Self-Selection is a common primitive underlying leader-selection for Proof-of-Stake blockchain protocols. The concept was first popularized in Algorand [Jing Chen and Silvio Micali, 2019], who also observed that the protocol might be manipulable. [Matheus V. X. Ferreira et al., 2022] provide a concrete manipulation that is strictly profitable for a staker of any size (and also prove upper bounds on the gains from manipulation). Separately, [Maryam Bahrani and S. Matthew Weinberg, 2024; Aviv Yaish et al., 2023] initiate the study of undetectable profitable manipulations of consensus protocols with a focus on the seminal Selfish Mining strategy [Eyal and Sirer, 2014] for Bitcoin’s Proof-of-Work longest-chain protocol. They design a Selfish Mining variant that, for sufficiently large miners, is strictly profitable yet also indistinguishable to an onlooker from routine latency (that is, a sufficiently large profit-maximizing miner could use their strategy to strictly profit over being honest in a way that still appears to the rest of the network as though everyone is honest but experiencing mildly higher latency. This avoids any risk of negatively impacting the value of the underlying cryptocurrency due to attack detection). We investigate the detectability of profitable manipulations of the canonical cryptographic self-selection leader selection protocol introduced in [Jing Chen and Silvio Micali, 2019] and studied in [Matheus V. X. Ferreira et al., 2022], and establish that for any player with α < (3-√5)/2 ≈ 0.38 fraction of the total stake, every strictly profitable manipulation is statistically detectable. Specifically, we consider an onlooker who sees only the random seed of each round (and does not need to see any other broadcasts by any other players). We show that the distribution of the sequence of random seeds when any player is profitably manipulating the protocol is inconsistent with any distribution that could arise by honest stakers being offline or timing out (for a natural stylized model of honest timeouts).
Cite as

Linda Cai, Jingyi Liu, S. Matthew Weinberg, and Chenghan Zhou. Profitable Manipulations of Cryptographic Self-Selection Are Statistically Detectable. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 30:1-30:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{cai_et_al:LIPIcs.AFT.2024.30,
  author =	{Cai, Linda and Liu, Jingyi and Weinberg, S. Matthew and Zhou, Chenghan},
  title =	{{Profitable Manipulations of Cryptographic Self-Selection Are Statistically Detectable}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{30:1--30:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-345-4},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{316},
  editor =	{B\"{o}hme, Rainer and Kiffer, Lucianna},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2024.30},
  URN =		{urn:nbn:de:0030-drops-209660},
  doi =		{10.4230/LIPIcs.AFT.2024.30},
  annote =	{Keywords: Blockchain, Cryptocurrency, Proof-of-Stake, Strategic Mining, Statistical Detection}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.21
When Bidders Are DAOs

Authors: Maryam Bahrani, Pranav Garimidi, and Tim Roughgarden

Published in: LIPIcs, Volume 282, 5th Conference on Advances in Financial Technologies (AFT 2023)

Abstract
In a typical decentralized autonomous organization (DAO), people organize themselves into a group that is programmatically managed. DAOs can act as bidders in auctions (with ConstitutionDAO being one notable example), with a DAO’s bid typically treated by the auctioneer as if it had been submitted by an individual, without regard to any details of the internal DAO dynamics. The goal of this paper is to study auctions in which the bidders are DAOs. More precisely, we consider the design of two-level auctions in which the "participants" are groups of bidders rather than individuals. Bidders form DAOs to pool resources, but must then also negotiate the terms by which the DAO’s winnings are shared. We model the outcome of a DAO’s negotiations through an aggregation function (which aggregates DAO members' bids into a single group bid) and a budget-balanced cost-sharing mechanism (that determines DAO members' access to the DAO’s allocation and distributes the aggregate payment demanded from the DAO to its members). DAOs' bids are processed by a direct-revelation mechanism that has no knowledge of the DAO structure (and thus treats each DAO as an individual). Within this framework, we pursue two-level mechanisms that are incentive-compatible (with truthful bidding a dominant strategy for each member of each DAO) and approximately welfare-optimal. We prove that, even in the case of a single-item auction, the DAO dynamics hidden from the outer mechanism preclude incentive-compatible welfare maximization: No matter what the outer mechanism and the cost-sharing mechanisms used by DAOs, the welfare of the resulting two-level mechanism can be a ≈ ln n factor less than the optimal welfare (in the worst case over DAOs and valuation profiles). We complement this lower bound with a natural two-level mechanism that achieves a matching approximate welfare guarantee. This upper bound also extends to multi-item auctions in which individuals have additive valuations. Finally, we show that our positive results cannot be extended much further: Even in multi-item settings in which bidders have unit-demand valuations, truthful two-level mechanisms form a highly restricted class and as a consequence cannot guarantee any non-trivial approximation of the maximum social welfare.
Cite as

Maryam Bahrani, Pranav Garimidi, and Tim Roughgarden. When Bidders Are DAOs. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 21:1-21:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{bahrani_et_al:LIPIcs.AFT.2023.21,
  author =	{Bahrani, Maryam and Garimidi, Pranav and Roughgarden, Tim},
  title =	{{When Bidders Are DAOs}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{21:1--21:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-303-4},
  ISSN =	{1868-8969},
  year =	{2023},
  volume =	{282},
  editor =	{Bonneau, Joseph and Weinberg, S. Matthew},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2023.21},
  URN =		{urn:nbn:de:0030-drops-192108},
  doi =		{10.4230/LIPIcs.AFT.2023.21},
  annote =	{Keywords: Auctions, DAOs}
}
Document
Track A: Algorithms, Complexity and Games
DOI: 10.4230/LIPIcs.ICALP.2020.8
Asynchronous Majority Dynamics in Preferential Attachment Trees

Authors: Maryam Bahrani, Nicole Immorlica, Divyarthi Mohan, and S. Matthew Weinberg

Published in: LIPIcs, Volume 168, 47th International Colloquium on Automata, Languages, and Programming (ICALP 2020)

Abstract
We study information aggregation in networks where agents make binary decisions (labeled incorrect or correct). Agents initially form independent private beliefs about the better decision, which is correct with probability 1/2+δ. The dynamics we consider are asynchronous (each round, a single agent updates their announced decision) and non-Bayesian (agents simply copy the majority announcements among their neighbors, tie-breaking in favor of their private signal). Our main result proves that when the network is a tree formed according to the preferential attachment model [Barabási and Albert, 1999], with high probability, the process stabilizes in a correct majority within O(n log n/log log n) rounds. We extend our results to other tree structures, including balanced M-ary trees for any M.
Cite as

Maryam Bahrani, Nicole Immorlica, Divyarthi Mohan, and S. Matthew Weinberg. Asynchronous Majority Dynamics in Preferential Attachment Trees. In 47th International Colloquium on Automata, Languages, and Programming (ICALP 2020). Leibniz International Proceedings in Informatics (LIPIcs), Volume 168, pp. 8:1-8:14, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2020)

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@InProceedings{bahrani_et_al:LIPIcs.ICALP.2020.8,
  author =	{Bahrani, Maryam and Immorlica, Nicole and Mohan, Divyarthi and Weinberg, S. Matthew},
  title =	{{Asynchronous Majority Dynamics in Preferential Attachment Trees}},
  booktitle =	{47th International Colloquium on Automata, Languages, and Programming (ICALP 2020)},
  pages =	{8:1--8:14},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-138-2},
  ISSN =	{1868-8969},
  year =	{2020},
  volume =	{168},
  editor =	{Czumaj, Artur and Dawar, Anuj and Merelli, Emanuela},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ICALP.2020.8},
  URN =		{urn:nbn:de:0030-drops-124156},
  doi =		{10.4230/LIPIcs.ICALP.2020.8},
  annote =	{Keywords: Opinion Dynamics, Information Cascades, Preferential Attachment, Majority Dynamics, non-Bayesian Asynchronous Learning, Stochastic Processes}
}
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