12 Search Results for "Monnot, Barnabé"

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.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.2025.31
Trustless Bridges via Random Sampling Light Clients

Authors: Bhargav Nagaraja Bhatt, Fatemeh Shirazi, and Alistair Stewart

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

Abstract
The increasing number of blockchain projects introduced annually has led to a pressing need for secure and efficient interoperability solutions. Currently, the lack of such solutions forces end-users to rely on centralized intermediaries, contradicting the core principle of decentralization and trust minimization in blockchain technology. We propose a decentralized and efficient interoperability solution (aka Bridge Protocol) that operates without additional trust assumptions, relying solely on the Byzantine Fault Tolerance (BFT) properties of the two chains being connected. In particular, relayers (actors that exchange messages between networks) are permissionless and decentralized, hence eliminating any single point of failure. We introduce Random Sampling, a novel technique for on-chain light clients to efficiently follow the history of PoS blockchains by reducing the signature verifications required. Here, the randomness is drawn on-chain, for example, using Ethereum’s RANDAO. We analyze the security of the bridge from a crypto- economic perspective and provide a framework to derive the security parameters. This includes handling subtle concurrency issues and randomness bias in strawman designs. While the protocol is applicable to various PoS chains, we demonstrate the protocol’s practical feasibility by showcasing an instantiated bridge between Polkadot and Ethereum (currently deployed), and discuss some practical security challenges. Furthermore, we evaluate the efficiency of our on-chain light client verifier (implemented as an Ethereum smart contract) against SNARK-based approaches, demonstrating significantly lower gas costs for signature verification - even for validator sets up to 10⁶.
Cite as

Bhargav Nagaraja Bhatt, Fatemeh Shirazi, and Alistair Stewart. Trustless Bridges via Random Sampling Light Clients. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 31:1-31:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{bhatt_et_al:LIPIcs.AFT.2025.31,
  author =	{Bhatt, Bhargav Nagaraja and Shirazi, Fatemeh and Stewart, Alistair},
  title =	{{Trustless Bridges via Random Sampling Light Clients}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{31:1--31:24},
  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.2025.31},
  URN =		{urn:nbn:de:0030-drops-247503},
  doi =		{10.4230/LIPIcs.AFT.2025.31},
  annote =	{Keywords: PoS Blockchains, Trustless Bridges, Light Clients, Decentralised Relayers, RANDAO Bias}
}
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.2025.26
Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest

Authors: Fei Wu, Danning Sui, Thomas Thiery, and Mallesh Pai

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

Abstract
This paper provides a comprehensive empirical analysis of the economics and dynamics behind arbitrages between centralized and decentralized exchanges (CEX-DEX) on Ethereum. We refine heuristics to identify arbitrage transactions from on-chain data and introduce a robust empirical framework to estimate arbitrage revenue without knowing traders' actual behaviors on CEX. Leveraging an extensive dataset spanning 19 months from August 2023 to March 2025, we estimate a total of 233.8M USD extracted by 19 major CEX-DEX searchers from 7,203,560 identified CEX-DEX arbitrages. Our analysis reveals increasing centralization trends as three searchers captured three-quarters of both volume and extracted value. We also demonstrate that searchers' profitability is tied to their integration level with block builders and uncover exclusive searcher-builder relationships and their market impact. Finally, we correct the previously underestimated profitability of block builders who vertically integrate with a searcher. These insights illuminate the darkest corner of the MEV landscape and highlight the critical implications for Ethereum’s decentralization.
Cite as

Fei Wu, Danning Sui, Thomas Thiery, and Mallesh Pai. Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest. In 7th Conference on Advances in Financial Technologies (AFT 2025). Leibniz International Proceedings in Informatics (LIPIcs), Volume 354, pp. 26:1-26:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2025)

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@InProceedings{wu_et_al:LIPIcs.AFT.2025.26,
  author =	{Wu, Fei and Sui, Danning and Thiery, Thomas and Pai, Mallesh},
  title =	{{Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest}},
  booktitle =	{7th Conference on Advances in Financial Technologies (AFT 2025)},
  pages =	{26:1--26:23},
  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.2025.26},
  URN =		{urn:nbn:de:0030-drops-247450},
  doi =		{10.4230/LIPIcs.AFT.2025.26},
  annote =	{Keywords: Decentralized Finance, Maximal Extractable Value, CEX-DEX arbitrages}
}
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.OPODIS.2024.7
Incentive Compatibility of Ethereum’s PoS Consensus Protocol

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

Published in: LIPIcs, Volume 324, 28th International Conference on Principles of Distributed Systems (OPODIS 2024)

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.
Cite as

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)

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@InProceedings{pavloff_et_al:LIPIcs.OPODIS.2024.7,
  author =	{Pavloff, Ulysse and Amoussou-Guenou, Yackolley and Tucci-Piergiovanni, Sara},
  title =	{{Incentive Compatibility of Ethereum’s PoS Consensus Protocol}},
  booktitle =	{28th International Conference on Principles of Distributed Systems (OPODIS 2024)},
  pages =	{7:1--7:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-360-7},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{324},
  editor =	{Bonomi, Silvia and Galletta, Letterio and Rivi\`{e}re, Etienne and Schiavoni, Valerio},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.OPODIS.2024.7},
  URN =		{urn:nbn:de:0030-drops-225431},
  doi =		{10.4230/LIPIcs.OPODIS.2024.7},
  annote =	{Keywords: Ethereum PoS, Game Theory, Block Reward}
}
Document
DOI: 10.4230/LIPIcs.OPODIS.2024.8
Optimal Multilevel Slashing for Blockchains

Authors: Kenan Wood, Hammurabi Mendes, and Jonad Pulaj

Published in: LIPIcs, Volume 324, 28th International Conference on Principles of Distributed Systems (OPODIS 2024)

Abstract
We present the notion of multilevel slashing, where proof-of-stake blockchain validators can obtain gradual levels of assurance that a certain block is bound to be finalized in a global consensus procedure, unless an increasing and optimally large number of Byzantine processes have their staked assets slashed - that is, deducted - due to provably incorrect behavior. Our construction is a highly parameterized generalization of combinatorial intersection systems based on finite projective spaces, with asymptotic high availability and optimal slashing properties. Even under weak conditions, we show that our construction has asymptotically optimal slashing properties with respect to message complexity and validator load; this result also illustrates a fundamental trade off between message complexity, load, and slashing. In addition, we show that any intersection system whose ground elements are disjoint subsets of nodes (e.g. "committees" in committee-based consensus protocols) has asymptotic high availability under similarly weak conditions. Finally, our multilevel construction gives the flexibility to blockchain validators to decide how many "levels" of finalization assurance they wish to obtain. This functionality can be seen either as (i) a form of an early, slashing-based block finalization; or (ii) a service to support reorg tolerance.
Cite as

Kenan Wood, Hammurabi Mendes, and Jonad Pulaj. Optimal Multilevel Slashing for Blockchains. In 28th International Conference on Principles of Distributed Systems (OPODIS 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 324, pp. 8:1-8:18, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{wood_et_al:LIPIcs.OPODIS.2024.8,
  author =	{Wood, Kenan and Mendes, Hammurabi and Pulaj, Jonad},
  title =	{{Optimal Multilevel Slashing for Blockchains}},
  booktitle =	{28th International Conference on Principles of Distributed Systems (OPODIS 2024)},
  pages =	{8:1--8:18},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-360-7},
  ISSN =	{1868-8969},
  year =	{2025},
  volume =	{324},
  editor =	{Bonomi, Silvia and Galletta, Letterio and Rivi\`{e}re, Etienne and Schiavoni, Valerio},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.OPODIS.2024.8},
  URN =		{urn:nbn:de:0030-drops-225445},
  doi =		{10.4230/LIPIcs.OPODIS.2024.8},
  annote =	{Keywords: Blockchains, Finality, Slashablility, Committees, Availability}
}
Document
DOI: 10.4230/LIPIcs.AFT.2024.20
Optimizing Exit Queues for Proof-Of-Stake Blockchains: A Mechanism Design Approach

Authors: Michael Neuder, Mallesh Pai, and Max Resnick

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

Abstract
Byzantine fault-tolerant consensus protocols have provable safety and liveness properties for static validator sets. In practice, however, the validator set changes over time, potentially eroding the protocol’s security guarantees. For example, systems with accountable safety may lose some of that accountability over time as adversarial validators exit. As a result, protocols must rate limit entry and exit so that the set changes slowly enough to ensure security. Here, the system designer faces a fundamental trade-off. The harder it is to exit the system, the less attractive staking becomes; alternatively, the easier it is to exit the system, the less secure the protocol will be. This paper provides the first systematic study of exit queues for Proof-of-Stake blockchains. Given a collection of validator-set consistency constraints imposed by the protocol, the social planner’s goal is to provide a constrained-optimal mechanism that minimizes disutility for the participants. We introduce the MINSLACK mechanism, a dynamic capacity first-come-first-served queue in which the amount of stake that can exit in a period depends on the number of previous exits and the consistency constraints. We show that MINSLACK is optimal when stakers equally value the processing of their withdrawal. When stakers values are heterogeneous, the optimal mechanism resembles a priority queue with dynamic capacity. However, this mechanism must reserve exit capacity for the future in case a staker with a much higher need for liquidity arrives. We conclude with a survey of known consistency constraints and highlight the diversity of existing exit mechanisms.
Cite as

Michael Neuder, Mallesh Pai, and Max Resnick. Optimizing Exit Queues for Proof-Of-Stake Blockchains: A Mechanism Design Approach. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 20:1-20:22, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{neuder_et_al:LIPIcs.AFT.2024.20,
  author =	{Neuder, Michael and Pai, Mallesh and Resnick, Max},
  title =	{{Optimizing Exit Queues for Proof-Of-Stake Blockchains: A Mechanism Design Approach}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{20:1--20:22},
  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.2024.20},
  URN =		{urn:nbn:de:0030-drops-209564},
  doi =		{10.4230/LIPIcs.AFT.2024.20},
  annote =	{Keywords: Mechanism Design, Market Design, Accountable Safety, Proof-of-Stake, Blockchain}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.4
Designing Multidimensional Blockchain Fee Markets

Authors: Theo Diamandis, Alex Evans, Tarun Chitra, and Guillermo Angeris

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

Abstract
Public blockchains implement a fee mechanism to allocate scarce computational resources across competing transactions. Most existing fee market designs utilize a joint, fungible unit of account (e.g., gas in Ethereum) to price otherwise non-fungible resources such as bandwidth, computation, and storage, by hardcoding their relative prices. Fixing the relative price of each resource in this way inhibits granular price discovery, limiting scalability and opening up the possibility of denial-of-service attacks. As a result, many prominent networks such as Ethereum and Solana have proposed multidimensional fee markets. In this paper, we provide a principled way to design fee markets that efficiently price multiple non-fungible resources. Starting from a loss function specified by the network designer, we show how to dynamically compute prices that align the network’s incentives (to minimize the loss) with those of the users and miners (to maximize their welfare), even as demand for these resources changes. We derive an EIP-1559-like mechanism from first principles as an example. Our pricing mechanism follows from a natural decomposition of the network designer’s problem into two parts that are related to each other via the resource prices. These results can be used to efficiently set fees in order to improve network performance.
Cite as

Theo Diamandis, Alex Evans, Tarun Chitra, and Guillermo Angeris. Designing Multidimensional Blockchain Fee Markets. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 4:1-4:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{diamandis_et_al:LIPIcs.AFT.2023.4,
  author =	{Diamandis, Theo and Evans, Alex and Chitra, Tarun and Angeris, Guillermo},
  title =	{{Designing Multidimensional Blockchain Fee Markets}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{4:1--4:23},
  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.2023.4},
  URN =		{urn:nbn:de:0030-drops-191933},
  doi =		{10.4230/LIPIcs.AFT.2023.4},
  annote =	{Keywords: Blockchains, transaction fees, convex optimization, mechanism design}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.30
Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols

Authors: Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan, Nihar Shah, and Barnabé Monnot

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

Abstract
We propose a model suggesting that rational consensus participants may play timing games, and strategically delay their block proposal to optimize MEV capture, while still ensuring the proposal’s inclusion in the canonical chain. In this context, ensuring economic fairness among consensus participants is critical to preserving decentralization. We contend that a model grounded in rational consensus participation provides a more accurate portrayal of behavior in economically incentivized systems such as blockchain protocols. We empirically investigate timing games on the Ethereum network and demonstrate that while timing games are worth playing, they are not currently being exploited by consensus participants. By quantifying the marginal value of time, we uncover strong evidence pointing towards their future potential, despite the limited exploitation of MEV capture observed at present.
Cite as

Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan, Nihar Shah, and Barnabé Monnot. Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 30:1-30:17, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{schwarzschilling_et_al:LIPIcs.AFT.2023.30,
  author =	{Schwarz-Schilling, Caspar and Saleh, Fahad and Thiery, Thomas and Pan, Jennifer and Shah, Nihar and Monnot, Barnab\'{e}},
  title =	{{Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{30:1--30:17},
  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.2023.30},
  URN =		{urn:nbn:de:0030-drops-192193},
  doi =		{10.4230/LIPIcs.AFT.2023.30},
  annote =	{Keywords: blockchain, proof-of-stake, game theory, maximal extractable value}
}
Document
DOI: 10.4230/LIPIcs.STACS.2019.31
Wealth Inequality and the Price of Anarchy

Authors: Kurtuluş Gemici, Elias Koutsoupias, Barnabé Monnot, Christos H. Papadimitriou, and Georgios Piliouras

Published in: LIPIcs, Volume 126, 36th International Symposium on Theoretical Aspects of Computer Science (STACS 2019)

Abstract
The price of anarchy quantifies the degradation of social welfare in games due to the lack of a centralized authority that can enforce the optimal outcome. It is known that, in certain games, such effects can be ameliorated via tolls or taxes. This leads to a natural, but largely unexplored, question: what is the effect of such transfers on social inequality? We study this question in nonatomic congestion games, arguably one of the most thoroughly studied settings from the perspective of the price of anarchy. We introduce a new model that incorporates the income distribution of the population and captures the income elasticity of travel time (i.e., how does loss of time translate to lost income). This allows us to argue about the equality of wealth distribution both before and after employing a mechanism. We establish that, under reasonable assumptions, tolls always increase inequality in symmetric congestion games under any reasonable metric of inequality such as the Gini index. We introduce the inequity index, a novel measure for quantifying the magnitude of these forces towards a more unbalanced wealth distribution and show it has good normative properties (robustness to scaling of income, no-regret learning). We analyze inequity both in theoretical settings (Pigou’s network under various wealth distributions) as well as experimental ones (based on a large scale field experiment in Singapore). Finally, we provide an algorithm for computing optimal tolls for any point of the trade-off of relative importance of efficiency and equality. We conclude with a discussion of our findings in the context of theories of justice as developed in contemporary social sciences and present several directions for future research.
Cite as

Kurtuluş Gemici, Elias Koutsoupias, Barnabé Monnot, Christos H. Papadimitriou, and Georgios Piliouras. Wealth Inequality and the Price of Anarchy. In 36th International Symposium on Theoretical Aspects of Computer Science (STACS 2019). Leibniz International Proceedings in Informatics (LIPIcs), Volume 126, pp. 31:1-31:16, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2019)

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@InProceedings{gemici_et_al:LIPIcs.STACS.2019.31,
  author =	{Gemici, Kurtulu\c{s} and Koutsoupias, Elias and Monnot, Barnab\'{e} and Papadimitriou, Christos H. and Piliouras, Georgios},
  title =	{{Wealth Inequality and the Price of Anarchy}},
  booktitle =	{36th International Symposium on Theoretical Aspects of Computer Science (STACS 2019)},
  pages =	{31:1--31:16},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-100-9},
  ISSN =	{1868-8969},
  year =	{2019},
  volume =	{126},
  editor =	{Niedermeier, Rolf and Paul, Christophe},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.STACS.2019.31},
  URN =		{urn:nbn:de:0030-drops-102707},
  doi =		{10.4230/LIPIcs.STACS.2019.31},
  annote =	{Keywords: congestion games, inequality}
}
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