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DOI: 10.4230/LIPIcs.AFT.2026.16

On Sybil-Proof Mechanisms (Extended Abstract)

Authors: Minghao Pan, Bruno Mazorra, Christoph Schlegel, and Akaki Mamageishvili

Published in: LIPIcs, Volume 395, 8th Conference on Advances in Financial Technologies (AFT 2026)

Abstract

We show that in the single-parameter mechanism design environment, the only non-wasteful, symmetric, incentive compatible and Sybil-proof direct mechanism is a second price auction with symmetric tie-breaking. Thus, if there is private information, lotteries or other mechanisms that do not always allocate to a highest-value bidder are not Sybil-proof or not incentive compatible. Moreover, we show that our main (im)possibility result extends beyond linear valuations, but not to multi-unit object allocation with unit-demand bidders. We also provide examples of mechanisms (with higher interim payoff for the bidders than a second price auction) that satisfy all of the other axioms and a weaker, Bayesian notion of Sybil-proofness. Thus, our (im)possibility result does not generalise to the Bayesian setting and we have a larger design space: With Sybil constraints, equivalence between dominant strategy and Bayesian implementation (that holds in classical single-parameter mechanism design without Sybils) no longer holds.

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Minghao Pan, Bruno Mazorra, Christoph Schlegel, and Akaki Mamageishvili. On Sybil-Proof Mechanisms (Extended Abstract). In 8th Conference on Advances in Financial Technologies (AFT 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 395, pp. 16:1-16:3, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{pan_et_al:LIPIcs.AFT.2026.16,
  author =	{Pan, Minghao and Mazorra, Bruno and Schlegel, Christoph and Mamageishvili, Akaki},
  title =	{{On Sybil-Proof Mechanisms}},
  booktitle =	{8th Conference on Advances in Financial Technologies (AFT 2026)},
  pages =	{16:1--16:3},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-451-2},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{395},
  editor =	{Kiayias, Aggelos and Kyropoulou, Maria},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2026.16},
  URN =		{urn:nbn:de:0030-drops-278700},
  doi =		{10.4230/LIPIcs.AFT.2026.16},
  annote =	{Keywords: Sybils, Mechanism Design, Blockchain}
}

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DOI: 10.4230/LIPIcs.AFT.2026.19

Competing Auctions in Intermediated Markets

Authors: Bruno Mazorra, Minghao Pan, and Christoph Schlegel

Published in: LIPIcs, Volume 395, 8th Conference on Advances in Financial Technologies (AFT 2026)

Abstract

We analyze competing auctions in intermediated markets, where a seller selects among parallel mechanisms for the sale of a single good, most prominently the relay-and-protocol architecture of proposer-builder separation in Ethereum. When the intermediary can enforce single-homing on its bidders, sealed-bid second-price intermediary auctions fully unravel into the sealed first-price principal auction; open bidding-format intermediaries unravel only partially, collapsing into first-price in equilibrium under symmetric latency and sorting fast bidders to the intermediary under asymmetric latency. Any last-look advantage is removed through the availability of a credible sealed bidding channel. These results extend to multi-plexing environments (no enforcement by the intermediary). While the unraveling result indicates that the availability of a sealed first-price bidding channel pushes the overall market to the same auction structure, the very assumption of the credibility of such a channel is problematic, as the seller may have an incentive to leak information: a first-price auction is leakage-resistant in the presence of a single "fast" bidder but not against two or more. However, if the seller can credibly commit to not leak bids, it is optimal for them to do so. A main motivation is the forthcoming Glamsterdam update of Ethereum: our analysis suggests that the availability of an in-protocol (first-price) bidding channel severely limits the design space for out-of-protocol auctions by relays and other intermediaries.

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Bruno Mazorra, Minghao Pan, and Christoph Schlegel. Competing Auctions in Intermediated Markets. In 8th Conference on Advances in Financial Technologies (AFT 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 395, pp. 19:1-19:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{mazorra_et_al:LIPIcs.AFT.2026.19,
  author =	{Mazorra, Bruno and Pan, Minghao and Schlegel, Christoph},
  title =	{{Competing Auctions in Intermediated Markets}},
  booktitle =	{8th Conference on Advances in Financial Technologies (AFT 2026)},
  pages =	{19:1--19:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-451-2},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{395},
  editor =	{Kiayias, Aggelos and Kyropoulou, Maria},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2026.19},
  URN =		{urn:nbn:de:0030-drops-278738},
  doi =		{10.4230/LIPIcs.AFT.2026.19},
  annote =	{Keywords: Competing auctions, proposer-builder separation, maximal extractable value}
}

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Documents authored by Pan, Minghao

On Sybil-Proof Mechanisms (Extended Abstract)

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Competing Auctions in Intermediated Markets

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