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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.ITCS.2020.61

Implementation in Advised Strategies: Welfare Guarantees from Posted-Price Mechanisms When Demand Queries Are NP-Hard

Authors: Linda Cai, Clay Thomas, and S. Matthew Weinberg

Published in: LIPIcs, Volume 151, 11th Innovations in Theoretical Computer Science Conference (ITCS 2020)

Abstract

State-of-the-art posted-price mechanisms for submodular bidders with m items achieve approximation guarantees of O((log log m)^3) [Sepehr Assadi and Sahil Singla, 2019]. Their truthfulness, however, requires bidders to compute an NP-hard demand-query. Some computational complexity of this form is unavoidable, as it is NP-hard for truthful mechanisms to guarantee even an m^(1/2-ε)-approximation for any ε > 0 [Shahar Dobzinski and Jan Vondrák, 2016]. Together, these establish a stark distinction between computationally-efficient and communication-efficient truthful mechanisms. We show that this distinction disappears with a mild relaxation of truthfulness, which we term implementation in advised strategies. Specifically, advice maps a tentative strategy either to that same strategy itself, or one that dominates it. We say that a player follows advice as long as they never play actions which are dominated by advice. A poly-time mechanism guarantees an α-approximation in implementation in advised strategies if there exists advice (which runs in poly-time) for each player such that an α-approximation is achieved whenever all players follow advice. Using an appropriate bicriterion notion of approximate demand queries (which can be computed in poly-time), we establish that (a slight modification of) the [Sepehr Assadi and Sahil Singla, 2019] mechanism achieves the same O((log log m)^3)-approximation in implementation in advised strategies.

Cite as

Linda Cai, Clay Thomas, and S. Matthew Weinberg. Implementation in Advised Strategies: Welfare Guarantees from Posted-Price Mechanisms When Demand Queries Are NP-Hard. In 11th Innovations in Theoretical Computer Science Conference (ITCS 2020). Leibniz International Proceedings in Informatics (LIPIcs), Volume 151, pp. 61:1-61:32, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2020)

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@InProceedings{cai_et_al:LIPIcs.ITCS.2020.61,
  author =	{Cai, Linda and Thomas, Clay and Weinberg, S. Matthew},
  title =	{{Implementation in Advised Strategies: Welfare Guarantees from Posted-Price Mechanisms When Demand Queries Are NP-Hard}},
  booktitle =	{11th Innovations in Theoretical Computer Science Conference (ITCS 2020)},
  pages =	{61:1--61:32},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-134-4},
  ISSN =	{1868-8969},
  year =	{2020},
  volume =	{151},
  editor =	{Vidick, Thomas},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2020.61},
  URN =		{urn:nbn:de:0030-drops-117464},
  doi =		{10.4230/LIPIcs.ITCS.2020.61},
  annote =	{Keywords: Combinatorial auctions, Posted-Price mechanisms, Submodular valuations, Incentive compatible}
}

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Profitable Manipulations of Cryptographic Self-Selection Are Statistically Detectable

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Implementation in Advised Strategies: Welfare Guarantees from Posted-Price Mechanisms When Demand Queries Are NP-Hard

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