Barriers to Collusion-resistant Transaction Fee Mechanisms
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arXiv
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| _version_ | 1866911776392609792 |
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| author | Gafni, Yotam Yaish, Aviv |
| author_facet | Gafni, Yotam Yaish, Aviv |
| contents | To allocate transactions to blocks, cryptocurrencies use an auction-like transaction fee mechanism (TFM). A conjecture of Roughgarden [44] asks whether there is a TFM that is incentive compatible for both the users and the miner, and is also resistant to off-chain agreements (OCAs) between these parties, a collusion notion that captures the ability of users and the miner to jointly deviate for profit. The work of Chung and Shi [12] tackles the problem using the different collusion resistance notion of side-channel proofness (SCP), and shows an impossibility given this notion. We show that OCA-proofness and SCP are different, with SCP being strictly stronger. We then fully characterize the intersection of deterministic dominant strategy incentive-compatible (DSIC) and OCA-proof mechanisms, as well as deterministic MMIC and OCA-proof ones, and use this characterization to show that only the trivial mechanism is DSIC, myopic miner incentive-compatible (MMIC) and OCA-proof. We also show that a randomized mechanism can be at most 0.842-efficient in the worst case, and that the impossibility of a non-trivial DSIC, MMIC and OCA-proof extends to a couple of natural classes of randomized mechanisms. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2402_08564 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Barriers to Collusion-resistant Transaction Fee Mechanisms Gafni, Yotam Yaish, Aviv Computer Science and Game Theory Theoretical Economics To allocate transactions to blocks, cryptocurrencies use an auction-like transaction fee mechanism (TFM). A conjecture of Roughgarden [44] asks whether there is a TFM that is incentive compatible for both the users and the miner, and is also resistant to off-chain agreements (OCAs) between these parties, a collusion notion that captures the ability of users and the miner to jointly deviate for profit. The work of Chung and Shi [12] tackles the problem using the different collusion resistance notion of side-channel proofness (SCP), and shows an impossibility given this notion. We show that OCA-proofness and SCP are different, with SCP being strictly stronger. We then fully characterize the intersection of deterministic dominant strategy incentive-compatible (DSIC) and OCA-proof mechanisms, as well as deterministic MMIC and OCA-proof ones, and use this characterization to show that only the trivial mechanism is DSIC, myopic miner incentive-compatible (MMIC) and OCA-proof. We also show that a randomized mechanism can be at most 0.842-efficient in the worst case, and that the impossibility of a non-trivial DSIC, MMIC and OCA-proof extends to a couple of natural classes of randomized mechanisms. |
| title | Barriers to Collusion-resistant Transaction Fee Mechanisms |
| topic | Computer Science and Game Theory Theoretical Economics |
| url | https://arxiv.org/abs/2402.08564 |