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Liquidity providers (LPs) on decentralized exchanges (DEXs) can protect themselves from adverse selection risk by updating their positions more frequently. However, repositioning is costly, because LPs have to pay gas fees for each update.…
We investigate the market microstructure of Automated Market Makers (AMMs), the most prominent type of blockchain-based decentralized exchanges. We show that the order execution mechanism yields token value loss for liquidity providers if…
The development of blockchain technologies has enabled the trustless execution of so-called smart contracts, i.e. programs that regulate the exchange of assets (e.g., cryptocurrency) between users. In a decentralized blockchain, the state…
Distributed ledger systems, such as blockchains, rely on consensus protocols that commit ordered messages for processing. In practice, message ordering within these systems is often reward-driven. This raises concerns about fairness,…
In this article, we develop an interdisciplinary analysis of MEV which desires to merge the gap that exists between technical and legal research supporting policymakers in their regulatory decisions concerning blockchains, DeFi and…
Mechanisms for decentralized finance on blockchains suffer from various problems, including suboptimal price execution for users, latency, and a worse user experience compared to their centralized counterparts. Recently, off-chain…
Blockchains offer strong security gurarantees, but cannot protect users against the ordering of transactions. Players such as miners, bots and validators can reorder various transactions and reap significant profits, called the Maximal…
A smart contract on a blockchain cannot keep a secret because its data is replicated on all nodes in a network. To remedy this problem, it has been suggested to combine blockchains with trusted execution environments (TEEs), such as Intel…
This paper develops a model to evaluate the viability of blockchain markets as the sole venue for price formation. Blockchains clear at discrete intervals called block time, and transactions are executed sequentially according to priority…
Modern blockchains increasingly rely on parallel execution to improve throughput. We show several industry and academic transaction fee mechanisms (TFMs) struggle to simultaneously account for execution parallelism while remaining…
Public blockchains have spurred the growing popularity of decentralized transactions and smart contracts, but they exhibit limitations on the transaction throughput, storage, and computation. To avoid transaction gridlock, public…
We study the economics of transaction reverts on Ethereum rollups and show that they are not accidental failures but equilibrium outcomes of MEV strategies. Using execution traces from major L2s, we find that over 80% of reverted…
In this study, we propose PRETRUST, a new framework to address the problem of the efficiency of payment process based on blockchain systems. PRETRUST is based on the thoughts of consortium chains, supporting fast payments. To make parties…
Blockchains protect an ecosystem worth more than $500bn with strong security properties derived from the principle of decentralization. Is today's blockchain decentralized? In this paper, we empirically studied one of the least…
Consensus protocols are currently the bottlenecks that prevent blockchain systems from scaling. However, we argue that transaction execution is also important to the performance and security of blockchains. In other words, there are ample…
Currently cryptocurrencies and Decentralized Finance (DeFi), which enable financial services on public blockchains, represents a new growing trend in finance. In contrast to financial markets, ruled by traditional corporations, DeFi is…
Byzantine Fault Tolerant (BFT) consensus forms the foundation of many modern blockchains striving for both high throughput and low latency. A growing bottleneck is transaction execution and validation on the critical path of consensus,…
Blockchain is a novel technology that is rising a lot of interest in the industrial and re- search sectors because its properties of decentralisation, immutability and data integrity. Initially, the underlying consensus mechanism has been…
The evolution of blockchain technology, from its origins as a decentralized ledger for cryptocurrencies to its broader applications in areas like decentralized finance (DeFi), has significantly transformed financial ecosystems while…
In permissionless blockchains, transaction issuers include a fee to incentivize miners to include their transactions. To accurately estimate this prioritization fee for a transaction, transaction issuers (or blockchain participants, more…