50 Search Results for "Weinberg, S. Matthew"

Volume

LIPIcs, Volume 282

5th Conference on Advances in Financial Technologies (AFT 2023)

AFT 2023, October 23-25, 2023, Princeton, NJ, USA

Editors: Joseph Bonneau and S. Matthew Weinberg

Document
DOI: 10.4230/LIPIcs.AFT.2024.10
Optimal RANDAO Manipulation in Ethereum

Authors: Kaya Alpturer and S. Matthew Weinberg

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

Abstract
It is well-known that RANDAO manipulation is possible in Ethereum if an adversary controls the proposers assigned to the last slots in an epoch. We provide a methodology to compute, for any fraction α of stake owned by an adversary, the maximum fraction f(α) of rounds that a strategic adversary can propose. We further implement our methodology and compute f(⋅) for all α. For example, we conclude that an optimal strategic participant with 5% of the stake can propose a 5.048% fraction of rounds, 10% of the stake can propose a 10.19% fraction of rounds, and 20% of the stake can propose a 20.68% fraction of rounds.
Cite as

Kaya Alpturer and S. Matthew Weinberg. Optimal RANDAO Manipulation in Ethereum. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 10:1-10:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{alpturer_et_al:LIPIcs.AFT.2024.10,
  author =	{Alpturer, Kaya and Weinberg, S. Matthew},
  title =	{{Optimal RANDAO Manipulation in Ethereum}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{10:1--10:21},
  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.2024.10},
  URN =		{urn:nbn:de:0030-drops-209467},
  doi =		{10.4230/LIPIcs.AFT.2024.10},
  annote =	{Keywords: Proof of Stake, Consensus, Blockchain, Ethereum, Randomness manipulation}
}
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
Track A: Algorithms, Complexity and Games
DOI: 10.4230/LIPIcs.ICALP.2024.115
On the Cut-Query Complexity of Approximating Max-Cut

Authors: Orestis Plevrakis, Seyoon Ragavan, and S. Matthew Weinberg

Published in: LIPIcs, Volume 297, 51st International Colloquium on Automata, Languages, and Programming (ICALP 2024)

Abstract
We consider the problem of query-efficient global max-cut on a weighted undirected graph in the value oracle model examined by [Rubinstein et al., 2018]. Graph algorithms in this cut query model and other query models have recently been studied for various other problems such as min-cut, connectivity, bipartiteness, and triangle detection. Max-cut in the cut query model can also be viewed as a natural special case of submodular function maximization: on query S ⊆ V, the oracle returns the total weight of the cut between S and V\S. Our first main technical result is a lower bound stating that a deterministic algorithm achieving a c-approximation for any c > 1/2 requires Ω(n) queries. This uses an extension of the cut dimension to rule out approximation (prior work of [Graur et al., 2020] introducing the cut dimension only rules out exact solutions). Secondly, we provide a randomized algorithm with Õ(n) queries that finds a c-approximation for any c < 1. We achieve this using a query-efficient sparsifier for undirected weighted graphs (prior work of [Rubinstein et al., 2018] holds only for unweighted graphs). To complement these results, for most constants c ∈ (0,1], we nail down the query complexity of achieving a c-approximation, for both deterministic and randomized algorithms (up to logarithmic factors). Analogously to general submodular function maximization in the same model, we observe a phase transition at c = 1/2: we design a deterministic algorithm for global c-approximate max-cut in O(log n) queries for any c < 1/2, and show that any randomized algorithm requires Ω(n/log n) queries to find a c-approximate max-cut for any c > 1/2. Additionally, we show that any deterministic algorithm requires Ω(n²) queries to find an exact max-cut (enough to learn the entire graph).
Cite as

Orestis Plevrakis, Seyoon Ragavan, and S. Matthew Weinberg. On the Cut-Query Complexity of Approximating Max-Cut. In 51st International Colloquium on Automata, Languages, and Programming (ICALP 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 297, pp. 115:1-115:20, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{plevrakis_et_al:LIPIcs.ICALP.2024.115,
  author =	{Plevrakis, Orestis and Ragavan, Seyoon and Weinberg, S. Matthew},
  title =	{{On the Cut-Query Complexity of Approximating Max-Cut}},
  booktitle =	{51st International Colloquium on Automata, Languages, and Programming (ICALP 2024)},
  pages =	{115:1--115:20},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-322-5},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{297},
  editor =	{Bringmann, Karl and Grohe, Martin and Puppis, Gabriele and Svensson, Ola},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ICALP.2024.115},
  URN =		{urn:nbn:de:0030-drops-202587},
  doi =		{10.4230/LIPIcs.ICALP.2024.115},
  annote =	{Keywords: query complexity, maximum cut, approximation algorithms, graph sparsification}
}
Document
DOI: 10.4230/LIPIcs.ITCS.2024.39
Simple and Optimal Online Contention Resolution Schemes for k-Uniform Matroids

Authors: Atanas Dinev and S. Matthew Weinberg

Published in: LIPIcs, Volume 287, 15th Innovations in Theoretical Computer Science Conference (ITCS 2024)

Abstract
We provide a simple (1-O(1/(√{k)}))-selectable Online Contention Resolution Scheme for k-uniform matroids against a fixed-order adversary. If A_i and G_i denote the set of selected elements and the set of realized active elements among the first i (respectively), our algorithm selects with probability 1-1/(√{k)} any active element i such that |A_{i-1}| + 1 ≤ (1-1/(√{k)})⋅ 𝔼[|G_i|]+√k. This implies a (1-O(1/(√{k)})) prophet inequality against fixed-order adversaries for k-uniform matroids that is considerably simpler than previous algorithms [Alaei, 2014; Azar et al., 2014; Jiang et al., 2022]. We also prove that no OCRS can be (1-Ω(√{(log k)/k}))-selectable for k-uniform matroids against an almighty adversary. This guarantee is matched by the (known) simple greedy algorithm that selects every active element with probability 1-Θ(√{(log k)/k}) [Hajiaghayi et al., 2007].
Cite as

Atanas Dinev and S. Matthew Weinberg. Simple and Optimal Online Contention Resolution Schemes for k-Uniform Matroids. In 15th Innovations in Theoretical Computer Science Conference (ITCS 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 287, pp. 39:1-39:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{dinev_et_al:LIPIcs.ITCS.2024.39,
  author =	{Dinev, Atanas and Weinberg, S. Matthew},
  title =	{{Simple and Optimal Online Contention Resolution Schemes for k-Uniform Matroids}},
  booktitle =	{15th Innovations in Theoretical Computer Science Conference (ITCS 2024)},
  pages =	{39:1--39:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-309-6},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{287},
  editor =	{Guruswami, Venkatesan},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.ITCS.2024.39},
  URN =		{urn:nbn:de:0030-drops-195677},
  doi =		{10.4230/LIPIcs.ITCS.2024.39},
  annote =	{Keywords: online contention resolutions schemes, prophet inequalities, online algorithms, approximation algorithms}
}
Document
Complete Volume
DOI: 10.4230/LIPIcs.AFT.2023
LIPIcs, Volume 282, AFT 2023, Complete Volume

Authors: Joseph Bonneau and S. Matthew Weinberg

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

Abstract
LIPIcs, Volume 282, AFT 2023, Complete Volume
Cite as

5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 1-718, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@Proceedings{bonneau_et_al:LIPIcs.AFT.2023,
  title =	{{LIPIcs, Volume 282, AFT 2023, Complete Volume}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{1--718},
  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},
  URN =		{urn:nbn:de:0030-drops-191884},
  doi =		{10.4230/LIPIcs.AFT.2023},
  annote =	{Keywords: LIPIcs, Volume 282, AFT 2023, Complete Volume}
}
Document
Front Matter
DOI: 10.4230/LIPIcs.AFT.2023.0
Front Matter, Table of Contents, Preface, Conference Organization

Authors: Joseph Bonneau and S. Matthew Weinberg

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

Abstract
Front Matter, Table of Contents, Preface, Conference Organization
Cite as

5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 0:i-0:xx, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{bonneau_et_al:LIPIcs.AFT.2023.0,
  author =	{Bonneau, Joseph and Weinberg, S. Matthew},
  title =	{{Front Matter, Table of Contents, Preface, Conference Organization}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{0:i--0:xx},
  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.2023.0},
  URN =		{urn:nbn:de:0030-drops-191894},
  doi =		{10.4230/LIPIcs.AFT.2023.0},
  annote =	{Keywords: Front Matter, Table of Contents, Preface, Conference Organization}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.1
Privacy-Preserving Transactions with Verifiable Local Differential Privacy

Authors: Danielle Movsowitz Davidow, Yacov Manevich, and Eran Toch

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

Abstract
Privacy-preserving transaction systems on blockchain networks like Monero or Zcash provide complete transaction anonymity through cryptographic commitments or encryption. While this secures privacy, it inhibits the collection of statistical data, which current financial markets heavily rely on for economic and sociological research conducted by central banks, statistics bureaus, and research companies. Differential privacy techniques have been proposed to preserve individuals' privacy while still making aggregate analysis possible. We show that differential privacy and privacy-preserving transactions can coexist. We propose a modular scheme incorporating verifiable local differential privacy techniques into a privacy-preserving transaction system. We devise a novel technique that, on the one hand, ensures unbiased randomness and integrity when computing the differential privacy noise by the user and on the other hand, does not degrade the user’s privacy guarantees.
Cite as

Danielle Movsowitz Davidow, Yacov Manevich, and Eran Toch. Privacy-Preserving Transactions with Verifiable Local Differential Privacy. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 1:1-1:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{movsowitzdavidow_et_al:LIPIcs.AFT.2023.1,
  author =	{Movsowitz Davidow, Danielle and Manevich, Yacov and Toch, Eran},
  title =	{{Privacy-Preserving Transactions with Verifiable Local Differential Privacy}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{1:1--1:23},
  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.2023.1},
  URN =		{urn:nbn:de:0030-drops-191901},
  doi =		{10.4230/LIPIcs.AFT.2023.1},
  annote =	{Keywords: Differential Privacy, Blockchain, Privacy Preserving, Verifiable Privacy}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.2
Correct Cryptocurrency ASIC Pricing: Are Miners Overpaying?

Authors: Aviv Yaish and Aviv Zohar

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

Abstract
Cryptocurrencies that are based on Proof-of-Work (PoW) often rely on special purpose hardware to perform so-called mining operations that secure the system, with miners receiving freshly minted tokens as a reward for their work. A notable example of such a cryptocurrency is Bitcoin, which is primarily mined using application specific integrated circuit (ASIC) based machines. Due to the supposed profitability of cryptocurrency mining, such hardware has been in great demand in recent years, in-spite of high associated costs like electricity. In this work, we show that because mining rewards are given in the mined cryptocurrency, while expenses are usually paid in some fiat currency such as the United States Dollar (USD), cryptocurrency mining is in fact a bundle of financial options. When exercised, each option converts electricity to tokens. We provide a method of pricing mining hardware based on this insight, and prove that any other price creates arbitrage. Our method shows that contrary to the popular belief that mining hardware is worth less if the cryptocurrency is highly volatile, the opposite effect is true: volatility increases value. Thus, if a coin’s volatility decreases, some miners may leave, affecting security. We compare the prices produced by our method to prices obtained from popular tools currently used by miners and show that the latter only consider the expected returns from mining, while neglecting to account for the inherent risk in mining, which is due to the high exchange-rate volatility of cryptocurrencies. Finally, we show that the returns made from mining can be imitated by trading in bonds and coins, and create such imitating investment portfolios. Historically, realized revenues of these portfolios have outperformed mining, showing that indeed hardware is mispriced.
Cite as

Aviv Yaish and Aviv Zohar. Correct Cryptocurrency ASIC Pricing: Are Miners Overpaying?. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 2:1-2:25, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{yaish_et_al:LIPIcs.AFT.2023.2,
  author =	{Yaish, Aviv and Zohar, Aviv},
  title =	{{Correct Cryptocurrency ASIC Pricing: Are Miners Overpaying?}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{2:1--2:25},
  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.2023.2},
  URN =		{urn:nbn:de:0030-drops-191919},
  doi =		{10.4230/LIPIcs.AFT.2023.2},
  annote =	{Keywords: Cryptocurrency, Blockchain, Proof of Work, Economics}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.3
F3B: A Low-Overhead Blockchain Architecture with Per-Transaction Front-Running Protection

Authors: Haoqian Zhang, Louis-Henri Merino, Ziyan Qu, Mahsa Bastankhah, Vero Estrada-Galiñanes, and Bryan Ford

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

Abstract
Front-running attacks, which benefit from advanced knowledge of pending transactions, have proliferated in the blockchain space since the emergence of decentralized finance. Front-running causes devastating losses to honest participants and continues to endanger the fairness of the ecosystem. We present Flash Freezing Flash Boys (F3B), a blockchain architecture that addresses front-running attacks by using threshold cryptography. In F3B, a user generates a symmetric key to encrypt their transaction, and once the underlying consensus layer has finalized the transaction, a decentralized secret-management committee reveals this key. F3B mitigates front-running attacks because, before the consensus group finalizes it, an adversary can no longer read the content of a transaction, thus preventing the adversary from benefiting from advanced knowledge of pending transactions. Unlike other mitigation systems, F3B properly ensures that all unfinalized transactions, even with significant delays, remain private by adopting per-transaction protection. Furthermore, F3B addresses front-running at the execution layer; thus, our solution is agnostic to the underlying consensus algorithm and compatible with existing smart contracts. We evaluated F3B on Ethereum with a modified execution layer and found only a negligible (0.026%) increase in transaction latency, specifically due to running threshold decryption with a 128-member secret-management committee after a transaction is finalized; this indicates that F3B is both practical and low-cost.
Cite as

Haoqian Zhang, Louis-Henri Merino, Ziyan Qu, Mahsa Bastankhah, Vero Estrada-Galiñanes, and Bryan Ford. F3B: A Low-Overhead Blockchain Architecture with Per-Transaction Front-Running Protection. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 3:1-3:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{zhang_et_al:LIPIcs.AFT.2023.3,
  author =	{Zhang, Haoqian and Merino, Louis-Henri and Qu, Ziyan and Bastankhah, Mahsa and Estrada-Gali\~{n}anes, Vero and Ford, Bryan},
  title =	{{F3B: A Low-Overhead Blockchain Architecture with Per-Transaction Front-Running Protection}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{3:1--3:23},
  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.2023.3},
  URN =		{urn:nbn:de:0030-drops-191921},
  doi =		{10.4230/LIPIcs.AFT.2023.3},
  annote =	{Keywords: Blockchain, DeFi, Front-running Mitigation}
}
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.2023.5
Security Analysis of Filecoin’s Expected Consensus in the Byzantine vs Honest Model

Authors: Xuechao Wang, Sarah Azouvi, and Marko Vukolić

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

Abstract
Filecoin is the largest storage-based open-source blockchain, both by storage capacity (>11EiB) and market capitalization. This paper provides the first formal security analysis of Filecoin’s consensus (ordering) protocol, Expected Consensus (EC). Specifically, we show that EC is secure against an arbitrary adversary that controls a fraction β of the total storage for β m < 1- e^{-(1-β)m}, where m is a parameter that corresponds to the expected number of blocks per round, currently m = 5 in Filecoin. We then present an attack, the n-split attack, where an adversary splits the honest miners between multiple chains, and show that it is successful for β m ≥ 1- e^{-(1-β)m}, thus proving that β m = 1- e^{-(1-β)m} is the tight security threshold of EC. This corresponds roughly to an adversary with 20% of the total storage pledged to the chain. Finally, we propose two improvements to EC security that would increase this threshold. One of these two fixes is being implemented as a Filecoin Improvement Proposal (FIP).
Cite as

Xuechao Wang, Sarah Azouvi, and Marko Vukolić. Security Analysis of Filecoin’s Expected Consensus in the Byzantine vs Honest Model. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 5:1-5:21, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{wang_et_al:LIPIcs.AFT.2023.5,
  author =	{Wang, Xuechao and Azouvi, Sarah and Vukoli\'{c}, Marko},
  title =	{{Security Analysis of Filecoin’s Expected Consensus in the Byzantine vs Honest Model}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{5:1--5:21},
  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.2023.5},
  URN =		{urn:nbn:de:0030-drops-191943},
  doi =		{10.4230/LIPIcs.AFT.2023.5},
  annote =	{Keywords: Decentralized storage, Consensus, Security analysis}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.6
Tailstorm: A Secure and Fair Blockchain for Cash Transactions

Authors: Patrik Keller, Ben Glickenhaus, George Bissias, and Gregory Griffith

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

Abstract
Proof-of-work (PoW) cryptocurrencies rely on a balance of security and fairness in order to maintain a sustainable ecosystem of miners and users. Users demand fast and consistent transaction confirmation, and in exchange drive the adoption and valuation of the cryptocurrency. Miners provide the confirmations, however, they primarily seek rewards. In unfair systems, miners can amplify their rewards by consolidating mining power. Centralization however, undermines the security guarantees of the system and might discourage users. In this paper we present Tailstorm, a cryptocurrency that strikes this balance. Tailstorm merges multiple recent protocol improvements addressing security, confirmation latency, and throughput with a novel incentive mechanism improving fairness. We implement a parallel proof-of-work consensus mechanism with k PoWs per block to obtain state-of-the-art consistency guarantees [Patrik Keller and Rainer Böhme, 2022]. Inspired by Bobtail [George Bissias and Brian Neil Levine, 2020] and Storm [awemany, 2019], we structure the individual PoWs in a tree which, by including a list of transactions with each PoW, reduces confirmation latency and improves throughput. Our proposed incentive mechanism discounts rewards based on the depth of this tree. Thereby, it effectively punishes information withholding, the core attack strategy used to reap an unfair share of rewards. We back our claims with a comprehensive analysis. We present a generic system model which allows us to specify Bitcoin, B_k [Patrik Keller and Rainer Böhme, 2022], and Tailstorm from a joint set of assumptions. We provide an analytical bound for the fairness of Tailstorm and Bitcoin in honest networks and we confirm the results through simulation. We evaluate the effectiveness of dishonest behaviour through reinforcement learning. Our attack search reproduces known optimal strategies against Bitcoin, uncovers new ones against B_k, and confirms that Tailstorm’s reward discounting makes it more resilient to incentive layer attacks. Our results are reproducible with the material provided online [Keller and Glickenhaus, 2023]. Lastly, we have implemented a prototype of the Tailstorm cryptocurrency as a fork of Bitcoin Cash. The client software is ready for testnet deployment and we also publish its source online [Griffith and Bissias, 2023].
Cite as

Patrik Keller, Ben Glickenhaus, George Bissias, and Gregory Griffith. Tailstorm: A Secure and Fair Blockchain for Cash Transactions. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 6:1-6:26, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{keller_et_al:LIPIcs.AFT.2023.6,
  author =	{Keller, Patrik and Glickenhaus, Ben and Bissias, George and Griffith, Gregory},
  title =	{{Tailstorm: A Secure and Fair Blockchain for Cash Transactions}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{6:1--6:26},
  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.2023.6},
  URN =		{urn:nbn:de:0030-drops-191954},
  doi =		{10.4230/LIPIcs.AFT.2023.6},
  annote =	{Keywords: Proof-of-Work, Blockchain, Cryptocurrency, Mining Rewards, Fairness}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.7
STROBE: Streaming Threshold Random Beacons

Authors: Donald Beaver, Konstantinos Chalkias, Mahimna Kelkar, Lefteris Kokoris-Kogias, Kevin Lewi, Ladi de Naurois, Valeria Nikolaenko, Arnab Roy, and Alberto Sonnino

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

Abstract
We revisit decentralized random beacons with a focus on practical distributed applications. Decentralized random beacons (Beaver and So, Eurocrypt'93) provide the functionality for n parties to generate an unpredictable sequence of bits in a way that cannot be biased, which is useful for any decentralized protocol requiring trusted randomness. Existing beacon constructions are highly inefficient in practical settings where protocol parties need to rejoin after crashes or disconnections, and more significantly where smart contracts may rely on arbitrary index points in high-volume streams. For this, we introduce a new notion of history-generating decentralized random beacons (HGDRBs). Roughly, the history-generation property of HGDRBs allows for previous beacon outputs to be efficiently generated knowing only the current value and the public key. At application layers, history-generation supports registering a sparser set of on-chain values if desired, so that apps like lotteries can utilize on-chain values without incurring high-frequency costs, enjoying all the benefits of DRBs implemented off-chain or with decoupled, special-purpose chains. Unlike rollups, HG is tailored specifically to recovering and verifying pseudorandom bit sequences and thus enjoys unique optimizations investigated in this work. We introduce STROBE: an efficient HGDRB construction which generalizes the original squaring-based RSA approach of Beaver and So. STROBE enjoys several useful properties that make it suited for practical applications that use beacons: 1) history-generating: it can regenerate and verify high-throughput beacon streams, supporting sparse (thus cost-effective) ledger entries; 2) concisely self-verifying: NIZK-free, with state and validation employing a single ring element; 3) eco-friendly: stake-based rather than work based; 4) unbounded: refresh-free, addressing limitations of Beaver and So; 5) delay-free: results are immediately available. 6) storage-efficient: the last beacon suffices to derive all past outputs, thus O(1) storage requirements for nodes serving the whole history.
Cite as

Donald Beaver, Konstantinos Chalkias, Mahimna Kelkar, Lefteris Kokoris-Kogias, Kevin Lewi, Ladi de Naurois, Valeria Nikolaenko, Arnab Roy, and Alberto Sonnino. STROBE: Streaming Threshold Random Beacons. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 7:1-7:16, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{beaver_et_al:LIPIcs.AFT.2023.7,
  author =	{Beaver, Donald and Chalkias, Konstantinos and Kelkar, Mahimna and Kokoris-Kogias, Lefteris and Lewi, Kevin and de Naurois, Ladi and Nikolaenko, Valeria and Roy, Arnab and Sonnino, Alberto},
  title =	{{STROBE: Streaming Threshold Random Beacons}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{7:1--7:16},
  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.2023.7},
  URN =		{urn:nbn:de:0030-drops-191969},
  doi =		{10.4230/LIPIcs.AFT.2023.7},
  annote =	{Keywords: decentralized randomness, beacons, consensus, blockchain, lottery}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.8
User Participation in Cryptocurrency Derivative Markets

Authors: Daisuke Kawai, Bryan Routledge, Kyle Soska, Ariel Zetlin-Jones, and Nicolas Christin

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

Abstract
As cryptocurrencies have been appreciating against fiat currencies, global markets for cryptocurrency investment have started to emerge, including, most prominently, derivative exchanges. Different from traditional derivative markets, cryptocurrency derivative products are directly marketed to consumers, rather than through brokerage firms or institutional investors. Cryptocurrency derivative exchange platforms include many game-like features (e.g., leaderboards, chatrooms, loot boxes), and have successfully attracted large numbers of investors. This paper attempts to discover the primary factors driving users to flock to these platforms. To answer this question, we have collected approximately a year worth of user data from one of the leading cryptocurrency derivative exchanges between 2020 and 2021. During that period, more than 7.5 million new user accounts were created on that platform. We build a regression analysis, accounting for the idiosyncrasies of the data at hand - notably, its non-stationarity and high correlation - and discover that prices of two major cryptocurrencies, Bitcoin and Ethereum, impact user registrations both in the short and long run. On the other hand, the influence of a less prominent coin, Ripple, and of a "meme" coin with a large social media presence, Dogecoin, is much more subtle. In particular, our regression model reveals the influence of Ripple prices vanishes when we include the SEC litigation against Ripple Labs, Inc. as an explanatory factor. Our regression analysis also suggests that the Chinese government statement regarding tightening cryptocurrency mining and trading regulations adversely impacted user registrations. These results indicate the strong influence of regulatory authorities on cryptocurrency investor behavior. We find cryptocurrency volatility impacts user registrations differently depending on the currency considered: volatility episodes in major cryptocurrencies immediately affect user registrations, whereas volatility of less prominent coins shows a delayed influence.
Cite as

Daisuke Kawai, Bryan Routledge, Kyle Soska, Ariel Zetlin-Jones, and Nicolas Christin. User Participation in Cryptocurrency Derivative Markets. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 8:1-8:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{kawai_et_al:LIPIcs.AFT.2023.8,
  author =	{Kawai, Daisuke and Routledge, Bryan and Soska, Kyle and Zetlin-Jones, Ariel and Christin, Nicolas},
  title =	{{User Participation in Cryptocurrency Derivative Markets}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{8:1--8:24},
  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.2023.8},
  URN =		{urn:nbn:de:0030-drops-191975},
  doi =		{10.4230/LIPIcs.AFT.2023.8},
  annote =	{Keywords: Cryptocurrency, Online Markets, Derivatives, Trading, Regression Analysis}
}
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