Dispute Resolution for Smart Contract-based Two-Party Protocols

Abstract

Blockchain systems promise to mediate interactions of mutually distrusting parties without a trusted third party. However, protocols with full smart contract-based security are either limited in functionality or complex, with high costs for secured interactions. This observation leads to the development of protocol-specific schemes to avoid costly dispute resolution in case all participants remain honest. In this paper, we introduce SmartJudge, an extensible generalization of this trend for smart contract-based two-party protocols. SmartJudge relies on a protocol-independent mediator smart contract that moderates two-party interactions and only consults protocol-specific verifier smart contracts in case of a dispute. This way, SmartJudge avoids verification costs in absence of disputes and sustains interaction confidentiality among honest parties. We implement verifier smart contracts for cross-blockchain trades and exchanging digital goods and show that SmartJudge can reduce costs by 46–50% and 22% over current state of the art, respectively.