Cross-domain trust aggregation in blockchain-based Internet of Things with dual-layer incentive mechanism

Abstract

Blockchain-based IoT (BIoT) has the potential to establish trust networks across different service domains, enabling reliable cross-domain collaboration for IoT resource exchange and driving related industries toward higher-end development. To address the scalability and cryptoeconomic security challenges of using blockchain to construct large-scale trust networks in IoT, this paper proposes a trust aggregation framework based on PoS restaking protocols, which allows sidechains to inherit and share part of the trust of the mainchain. To achieve efficient resource allocation and ensure incentive compatibility among participants in heterogeneous BIoT systems, this paper proposes a dual-layer incentive mechanism based on combinatorial contracts and multilateral auctions. Firstly, we design an independent contract-based incentive mechanism that reveals validators’ true risk preferences under asymmetric information and explores optimal reward and punishment design in the mainchain. Then, on this basis, we establish a corresponding combinatorial contract mechanism to provide optimal restaking incentives in sidechains. Secondly, we develop an auction-based incentive mechanism between the mainchain and sidechains, studying optimal strategies for allocation and payments under limited resources and uncertain sidechain demand. Additionally, to address potential collusion and cascade risks arising from increased corruption profits due to trust aggregation, we propose a reputation-based exemption mechanism to balance the benefits and risks of trust aggregation. Finally, we conduct detailed simulations to verify the feasibility and effectiveness of the proposed methods. Theoretical derivations and simulation results demonstrate that our approach can achieve mutual benefits for all parties, enhance the scalability and cryptoeconomic security of BIoT systems, promote efficient and reliable cross-domain IoT collaboration.