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Documents authored by Ferreira, Matheus V. X.

Document
DOI: 10.4230/LIPIcs.AFT.2024.19
Credible, Optimal Auctions via Public Broadcast

Authors: Tarun Chitra, Matheus V. X. Ferreira, and Kshitij Kulkarni

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

Abstract
We study auction design in a setting where agents can communicate over a censorship-resistant broadcast channel like the ones we can implement over a public blockchain. We seek to design credible, strategyproof auctions in a model that differs from the traditional mechanism design framework because communication is not centralized via the auctioneer. We prove this allows us to design a larger class of credible auctions where the auctioneer has no incentive to be strategic. Intuitively, a decentralized communication model weakens the auctioneer’s adversarial capabilities because they can only inject messages into the communication channel but not delete, delay, or modify the messages from legitimate buyers. Our main result is a separation in the following sense: we give the first instance of an auction that is credible only if communication is decentralized. Moreover, we construct the first two-round auction that is credible, strategyproof, and optimal when bidder valuations are α-strongly regular, for α > 0. Our result relies on mild assumptions - namely, the existence of a broadcast channel and cryptographic commitments.
Cite as

Tarun Chitra, Matheus V. X. Ferreira, and Kshitij Kulkarni. Credible, Optimal Auctions via Public Broadcast. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 19:1-19:16, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{chitra_et_al:LIPIcs.AFT.2024.19,
  author =	{Chitra, Tarun and Ferreira, Matheus V. X. and Kulkarni, Kshitij},
  title =	{{Credible, Optimal Auctions via Public Broadcast}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{19:1--19:16},
  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.2024.19},
  URN =		{urn:nbn:de:0030-drops-209550},
  doi =		{10.4230/LIPIcs.AFT.2024.19},
  annote =	{Keywords: credible auctions, blockchains, cryptographic auctions, optimal auction design, mechanism design with imperfect commitment}
}
Document
Invited Talk
DOI: 10.4230/OASIcs.Tokenomics.2021.6
Dynamic Posted-Price Mechanisms for the Blockchain Transaction Fee Market (Invited Talk)

Authors: Matheus V. X. Ferreira, Daniel J. Moroz, David C. Parkes, and Mitchell Stern

Published in: OASIcs, Volume 97, 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021)

Abstract
In recent years, prominent blockchain systems such as Bitcoin and Ethereum have experienced explosive growth in transaction volume, leading to frequent surges in demand for limited block space and causing transaction fees to fluctuate by orders of magnitude. Existing systems sell space using first-price auctions; however, users find it difficult to estimate how much they need to bid in order to get their transactions accepted onto the chain. If they bid too low, their transactions can have long confirmation times. If they bid too high, they pay larger fees than necessary. In light of these issues, new transaction fee mechanisms have been proposed, most notably EIP-1559, aiming to provide better usability. EIP-1559 is a history-dependent mechanism that relies on block utilization to adjust a base fee. We propose an alternative design - a dynamic posted-price mechanism - which uses not only block utilization but also observable bids from past blocks to compute a posted price for subsequent blocks. We show its potential to reduce price volatility by providing examples for which the prices of EIP-1559 are unstable while the prices of the proposed mechanism are stable. More generally, whenever the demand for the blockchain stabilizes, we ask if our mechanism is able to converge to a stable state. Our main result provides sufficient conditions in a probabilistic setting for which the proposed mechanism is approximately welfare optimal and the prices are stable. Our main technical contribution towards establishing stability is an iterative algorithm that, given oracle access to a Lipschitz continuous and strictly concave function f, converges to a fixed point of f.
Cite as

Matheus V. X. Ferreira, Daniel J. Moroz, David C. Parkes, and Mitchell Stern. Dynamic Posted-Price Mechanisms for the Blockchain Transaction Fee Market (Invited Talk). In 3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021). Open Access Series in Informatics (OASIcs), Volume 97, p. 6:1, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2022)

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@InProceedings{ferreira_et_al:OASIcs.Tokenomics.2021.6,
  author =	{Ferreira, Matheus V. X. and Moroz, Daniel J. and Parkes, David C. and Stern, Mitchell},
  title =	{{Dynamic Posted-Price Mechanisms for the Blockchain Transaction Fee Market}},
  booktitle =	{3rd International Conference on Blockchain Economics, Security and Protocols (Tokenomics 2021)},
  pages =	{6:1--6:1},
  series =	{Open Access Series in Informatics (OASIcs)},
  ISBN =	{978-3-95977-220-4},
  ISSN =	{2190-6807},
  year =	{2022},
  volume =	{97},
  editor =	{Gramoli, Vincent and Halaburda, Hanna and Pass, Rafael},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/OASIcs.Tokenomics.2021.6},
  URN =		{urn:nbn:de:0030-drops-159039},
  doi =		{10.4230/OASIcs.Tokenomics.2021.6},
  annote =	{Keywords: Blockchain, Posted-price mechanism, Credible, Incentive compatibility, Transaction fee market, first-price auction, EIP-1559}
}
Document
DOI: 10.4230/LIPIcs.ITCS.2022.66
Credible, Strategyproof, Optimal, and Bounded Expected-Round Single-Item Auctions for All Distributions

Authors: Meryem Essaidi, Matheus V. X. Ferreira, and S. Matthew Weinberg

Published in: LIPIcs, Volume 215, 13th Innovations in Theoretical Computer Science Conference (ITCS 2022)

Abstract
We consider a revenue-maximizing seller with a single item for sale to multiple buyers with independent and identically distributed valuations. Akbarpour and Li (2020) show that the only optimal, credible, strategyproof auction is the ascending price auction with reserves which has unbounded communication complexity. Recent work of Ferreira and Weinberg (2020) circumvents their impossibility result assuming the existence of cryptographically secure commitment schemes, and designs a two-round credible, strategyproof, optimal auction. However, their auction is only credible when buyers' valuations are MHR or α-strongly regular: they show their auction might not be credible even when there is a single buyer drawn from a non-MHR distribution. In this work, under the same cryptographic assumptions, we identify a new single-item auction that is credible, strategyproof, revenue optimal, and terminates in constant rounds in expectation for all distributions with finite monopoly price.
Cite as

Meryem Essaidi, Matheus V. X. Ferreira, and S. Matthew Weinberg. Credible, Strategyproof, Optimal, and Bounded Expected-Round Single-Item Auctions for All Distributions. In 13th Innovations in Theoretical Computer Science Conference (ITCS 2022). Leibniz International Proceedings in Informatics (LIPIcs), Volume 215, pp. 66:1-66:19, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2022)

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@InProceedings{essaidi_et_al:LIPIcs.ITCS.2022.66,
  author =	{Essaidi, Meryem and Ferreira, Matheus V. X. and Weinberg, S. Matthew},
  title =	{{Credible, Strategyproof, Optimal, and Bounded Expected-Round Single-Item Auctions for All Distributions}},
  booktitle =	{13th Innovations in Theoretical Computer Science Conference (ITCS 2022)},
  pages =	{66:1--66:19},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-217-4},
  ISSN =	{1868-8969},
  year =	{2022},
  volume =	{215},
  editor =	{Braverman, Mark},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2022.66},
  URN =		{urn:nbn:de:0030-drops-156621},
  doi =		{10.4230/LIPIcs.ITCS.2022.66},
  annote =	{Keywords: Credible Auctions, Cryptographically Secure, Single-Item}
}
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