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| Main Authors: | , , |
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| Format: | Preprint |
| Published: |
2025
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2512.20864 |
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| _version_ | 1866908815240200192 |
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| author | Lee, Suhyeon Nguyen, Dieu-Huyen Lee, Donghwan |
| author_facet | Lee, Suhyeon Nguyen, Dieu-Huyen Lee, Donghwan |
| contents | Blockchains offer a decentralized and secure execution environment strong enough to host cryptocurrencies, but the state-replication model makes on-chain computation expensive. To avoid heavy on-chain workloads, systems like Truebit and optimistic rollups use challenge-based protocols, performing computations off-chain and invoking the chain only when challenged. This keeps normal-case costs low and, if at least one honest challenger exists, can catch fraud. What has been less clear is whether honest challengers are actually incentivized and a dishonest proposer is properly damaged under the worst case environment. We build a model with a colluding minority, heterogeneous costs, and three ordering modes. We then ask whether two goals can be met together: honest non-loss and fraud deterrence. Our results are clear: in single-winner designs, the incentive design is impossible or limited in scale. By contrast, in multi-winner designs, we obtain simple, explicit conditions under which both goals hold. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2512_20864 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | (Im)possibility of Incentive Design for Challenge-based Blockchain Protocols Lee, Suhyeon Nguyen, Dieu-Huyen Lee, Donghwan Computer Science and Game Theory Blockchains offer a decentralized and secure execution environment strong enough to host cryptocurrencies, but the state-replication model makes on-chain computation expensive. To avoid heavy on-chain workloads, systems like Truebit and optimistic rollups use challenge-based protocols, performing computations off-chain and invoking the chain only when challenged. This keeps normal-case costs low and, if at least one honest challenger exists, can catch fraud. What has been less clear is whether honest challengers are actually incentivized and a dishonest proposer is properly damaged under the worst case environment. We build a model with a colluding minority, heterogeneous costs, and three ordering modes. We then ask whether two goals can be met together: honest non-loss and fraud deterrence. Our results are clear: in single-winner designs, the incentive design is impossible or limited in scale. By contrast, in multi-winner designs, we obtain simple, explicit conditions under which both goals hold. |
| title | (Im)possibility of Incentive Design for Challenge-based Blockchain Protocols |
| topic | Computer Science and Game Theory |
| url | https://arxiv.org/abs/2512.20864 |