{"title":"The Stability and the Security of the Tangle","authors":"Quentin Bramas","doi":"10.4230/OASIcs.Tokenomics.2019.8","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2019.8","url":null,"abstract":"In this paper we study the stability and the security of the Tangle, which is the distributed data structure at the base of the IOTA protocol. The contribution of this paper is twofold. Firstly we present simple model to analyze the Tangle and give the first formal analyzes of the average number of unconfirmed transactions and the average confirmation time of a transaction. Secondly we define the notion of assiduous honest majority that captures the fact that the honest nodes have more hashing power than the adversarial nodes and that all this hashing power is constantly used to create transactions. This notion is important because we prove that it is a necessary assumption to protect the Tangle against double-spending attacks, and this is true for any tip selection algorithm (which is a fundamental building blocks of the protocol) that verifies some reasonable assumptions. In particular, the same is true with the Markov Chain Monte Carlo selection tip algorithm currently used in the IOTA protocol. Our work shows that either all the honest nodes must constantly use all their hashing power to validate the main chain (similarly to the bitcoin protocol) or some kind of authority must be provided to avoid this kind of attack (like in the current version of the IOTA where a coordinator is used). The work presented here constitute a theoretical analysis and cannot be used to attack the current IOTA implementation. The goal of this paper is to present a formalization of the protocol and, as a starting point, to prove that some assumptions are necessary in order to defend the system again double-spending attacks. We hope that it will be used to improve the current protocol with a more formal approach.","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126926674","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Digital Currencies as Types (Invited Talk)","authors":"Timothy A. K. Zakian","doi":"10.4230/OASIcs.Tokenomics.2020.3","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2020.3","url":null,"abstract":"","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128656880","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Amit Chaudhary, R. Kozhan, Ganesh Viswanath-Natraj
{"title":"Interest Rate Rules in Decentralized Finance: Evidence from Compound","authors":"Amit Chaudhary, R. Kozhan, Ganesh Viswanath-Natraj","doi":"10.4230/OASIcs.Tokenomics.2022.5","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2022.5","url":null,"abstract":"We study the fundamentals of interest rate rules on the decentralized finance protocol Compound. Interest rates are set by the governance of the protocol, and are based on the utilization of an asset: which is the ratio of a cryptocurrency that is borrowed to its total supply in the protocol. We discuss factors that determine the slope parameters of interest rate rules. Slope parameters are typically higher for more volatile cryptocurrencies. We argue liquidation risk can explain the cross-sectional variation in interest rate rules. We also draw parallels between these rules to the demand for loanable funds in traditional money markets.","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"135 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126910244","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Fundamentals of the MakerDAO Governance Token","authors":"R. Kozhan, Ganesh Viswanath-Natraj","doi":"10.4230/OASIcs.Tokenomics.2021.11","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2021.11","url":null,"abstract":"We study the fundamentals governing the price of the MakerDAO governance token MKR. Governance tokens are minted in response to liquidations, and burned in response to growth in the system surplus. MKR tokens appreciate with an increase in system surplus and depreciate with a rise in systemic risk due to DAI liquidation spirals. We discuss incentive compatibility conditions that need to be satisfied for the protocol to maintain the DAI stablecoin peg. 2012","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132009125","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Revisiting the Liquidity/Risk Trade-Off with Smart Contracts (Short Paper)","authors":"V. Danos, J. Krivine, Julien Prat","doi":"10.4230/OASIcs.Tokenomics.2020.10","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2020.10","url":null,"abstract":"Real-time financial settlements constrain traders to have the cash on hand before they can enter a trade [3]. This prevents short-selling and ultimately impedes liquidity. We propose a novel trading protocol which relaxes the cash constraint, and manages chains of deferred payments. Traders can buy without paying first, and can re-sell while still withholding payments. Trades naturally arrange in chains which contract when deals are closed and extend when new ones open. Default risk is handled by reversing trades. In this short note we propose a class of novel financial instruments for zero-risk and zerocollateral intermediation. The central idea is that bilateral trades can be chained into trade lines. The ownership of an underlying asset becomes distributed among traders with positions in the trade line. The trading protocol determines who ends up owning that asset and the overall payoffs of the participants. Counterparty risk is avoided because the asset itself serves as a collateral for the entire chain of trades. The protocol can be readily implemented as a smart contract on a blockchain. Additional examples, proofs, protocol variants, and game-theoretic properties related to the order-sensitivity of the games defined by trade lines can be found in the extended version of this note [1]. Therein, one can also find the definition and game-theoretic analysis of standard trade-lines with applications to trust-less zero-collateral intermediation. 2012 ACM Subject Classification Information systems → Online banking","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127540268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paul-Marie Grollemund, P. Lafourcade, Kevin Thiry-Atighehchi, Ariane Tichit
{"title":"Proof of Behavior (Short Paper)","authors":"Paul-Marie Grollemund, P. Lafourcade, Kevin Thiry-Atighehchi, Ariane Tichit","doi":"10.4230/OASIcs.Tokenomics.2020.11","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2020.11","url":null,"abstract":"","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126386123","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Distributed Computing Meets Game Theory: Fault Tolerance and Implementation with Cheap Talk (Invited Talk)","authors":"Joseph Y. Halpern","doi":"10.4230/OASIcs.Tokenomics.2021.1","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2021.1","url":null,"abstract":"Traditionally, work in distributed computing has divided the agents into “good guys” and “bad guys”. The good guys follow the protocol; the bad guys do everything in their power to make sure it does not work. By way of contrast, game theory has focused on “rational” agents, who try to maximize their utilities. Here I try to combine these viewpoints. Specifically, following the work of Abraham et al. [2], I consider (k, t)-robust protocols/strategies, which tolerate coalitions of rational players of size up to k and up to t malicious players. I focus in particular on the problem that economists have called implementing a mediator. That is, can the players in the system, just talking among themselves (using what economists call “cheap talk”) simulate the effects of the mediator (see, e.g., [3, 4, 5, 6, 8, 10, 11]). In computer science, this essentially amounts to multiparty computation [7, 9, 12]. Ideas from cryptography and distributed computing allow us to prove results on how many agents are required to implement a (k, t)-robust mediator just using cheap talk. These results subsume (and, in some cases, correct) results from the game theory literature. The results of Abraham et al. [2] were proved for what are called synchronous systems in the distributed computing community; this is also the case for all the results in the economics literature cited above. In synchronous systems, communication proceeds in atomic rounds, and all messages sent during round r are received by round r+1. But many systems in the real world are asynchronous. In an asynchronous setting, there are no rounds; messages sent by the players may take arbitrarily long to get to their recipients. Markets and the internet are best viewed as asynchronous. Blockchain implementations assume partial synchrony, where there is an upper bound on how long messages take to arrive. The partial synchronous setting already shows some of the difficulty of moving away from synchrony: An agent i can wait to take its action until it receives a message from j (on which its action can depend). This cannot happen in a synchronous setting. Abraham, Dolev, Geffner, abnd Halpern [1] extend the results on implementing mediators to the asynchronous setting. 2012 ACM Subject Classification Theory of computation → Algorithmic game theory and mechanism design","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"45 3","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120993070","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Blockchain and Privacy (Invited Talk)","authors":"Catherine Tucker","doi":"10.4230/OASIcs.Tokenomics.2021.12","DOIUrl":"https://doi.org/10.4230/OASIcs.Tokenomics.2021.12","url":null,"abstract":"","PeriodicalId":174732,"journal":{"name":"International Conference on Blockchain Economics, Security and Protocols","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130435143","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}