Rationally Analyzing Shelby: Proving Incentive Compatibility in a Decentralized Storage Network
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arXiv
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| Format: | Preprint |
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2025
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| _version_ | 1866917011054919680 |
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| author | Crystal, Michael Goren, Guy Kominers, Scott Duke |
| author_facet | Crystal, Michael Goren, Guy Kominers, Scott Duke |
| contents | Decentralized storage is one of the most natural applications built on blockchains and a central component of the Web3 ecosystem. Yet despite a decade of active development -- from IPFS and Filecoin to more recent entrants -- most of these storage protocols have received limited formal analysis of their incentive properties. Claims of incentive compatibility are sometimes made, but rarely proven. This gap matters: without well-designed incentives, a system may distribute storage but fail to truly decentralize it.
We analyze Shelby -- a storage network protocol recently proposed by Aptos Labs and Jump Crypto -- and provide the first formal proof of its incentive properties. Our game-theoretic model shows that while off-chain audits alone collapse to universal shirking, Shelby's combination of peer audits with occasional on-chain verification yields incentive compatibility under natural parameter settings. We also examine coalition behavior and outline a simple modification that strengthens the protocol's collusion-resilience. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2510_11866 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Rationally Analyzing Shelby: Proving Incentive Compatibility in a Decentralized Storage Network Crystal, Michael Goren, Guy Kominers, Scott Duke Computer Science and Game Theory Distributed, Parallel, and Cluster Computing Multiagent Systems Decentralized storage is one of the most natural applications built on blockchains and a central component of the Web3 ecosystem. Yet despite a decade of active development -- from IPFS and Filecoin to more recent entrants -- most of these storage protocols have received limited formal analysis of their incentive properties. Claims of incentive compatibility are sometimes made, but rarely proven. This gap matters: without well-designed incentives, a system may distribute storage but fail to truly decentralize it. We analyze Shelby -- a storage network protocol recently proposed by Aptos Labs and Jump Crypto -- and provide the first formal proof of its incentive properties. Our game-theoretic model shows that while off-chain audits alone collapse to universal shirking, Shelby's combination of peer audits with occasional on-chain verification yields incentive compatibility under natural parameter settings. We also examine coalition behavior and outline a simple modification that strengthens the protocol's collusion-resilience. |
| title | Rationally Analyzing Shelby: Proving Incentive Compatibility in a Decentralized Storage Network |
| topic | Computer Science and Game Theory Distributed, Parallel, and Cluster Computing Multiagent Systems |
| url | https://arxiv.org/abs/2510.11866 |