IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2402.08564.html
   My bibliography  Save this paper

Barriers to Collusion-resistant Transaction Fee Mechanisms

Author

Listed:
  • Yotam Gafni
  • Aviv Yaish

Abstract

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.

Suggested Citation

  • Yotam Gafni & Aviv Yaish, 2024. "Barriers to Collusion-resistant Transaction Fee Mechanisms," Papers 2402.08564, arXiv.org.
    • Handle: RePEc:arx:papers:2402.08564
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2402.08564
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Elijah Fox & Mallesh Pai & Max Resnick, 2023. "Censorship Resistance in On-Chain Auctions," Papers 2301.13321, arXiv.org, revised Jun 2023.
    2. Maryam Bahrani & Pranav Garimidi & Tim Roughgarden, 2023. "Transaction Fee Mechanism Design with Active Block Producers," Papers 2307.01686, arXiv.org, revised Oct 2023.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vincent Gramlich & Dennis Jelito & Johannes Sedlmeir, 2024. "Maximal extractable value: Current understanding, categorization, and open research questions," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-21, December.
    2. Yoav Kolumbus & Joe Halpern & 'Eva Tardos, 2024. "Paying to Do Better: Games with Payments between Learning Agents," Papers 2405.20880, arXiv.org.
    3. Tarun Chitra, 2023. "Towards a Theory of Maximal Extractable Value II: Uncertainty," Papers 2309.14201, arXiv.org.
    4. Hao Chung & Tim Roughgarden & Elaine Shi, 2024. "Collusion-Resilience in Transaction Fee Mechanism Design," Papers 2402.09321, arXiv.org, revised Jun 2024.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2402.08564. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.