Related papers: Optimality Despite Chaos in Fee Markets
Set reconciliation is a fundamental task in distributed systems, particularly in blockchain networks, where it enables synchronization of transaction pools among peers and facilitates block dissemination. Traditional set reconciliation…
User transactions on Ethereum's peer-to-peer network are at risk of being attacked. The smart contracts building decentralized finance (DeFi) have introduced a new transaction ordering dependency to the Ethereum blockchain. As a result,…
Trading large volumes of a financial asset in order driven markets requires the use of algorithmic execution dividing the volume in many transactions in order to minimize costs due to market impact. A proper design of an optimal execution…
While blockchains initially gained popularity in the realm of cryptocurrencies, their widespread adoption is expanding beyond conventional applications, driven by the imperative need for enhanced data security. Despite providing a secure…
We model and analyze blockchain miners who seek to maximize the compound return of their mining businesses. The analysis of the optimal strategies finds a new equilibrium point among the miners and the mining pools, which predicts the…
The goal of cryptocurrencies is decentralization. In principle, all currencies have equal status. Unlike traditional stock markets, there is no default currency of denomination (fiat), thus the trading pairs can be set freely. However, it…
According to the fundamental theorems of welfare economics, any competitive equilibrium is Pareto efficient. Unfortunately, competitive equilibrium prices only exist under strong assumptions such as perfectly divisible goods and convex…
Maximal Extractable Value (MEV) drives the prosperity of the blockchain ecosystem. By strategically including, excluding, or reordering transactions within blocks, block producers can extract additional value, which in turn incentivizes…
Cryptocurrencies employ auction-esque transaction fee mechanisms (TFMs) to allocate transactions to blocks, and to determine how much fees miners can collect from transactions. Several impossibility results show that TFMs that satisfy a…
Current blockchain execution throughput is limited by data contention, reducing execution layer parallelism. Fast Ahead-of-Formation Optimization (FAFO) is the first blockchain transaction scheduler to address this problem by reordering…
Payment channel networks (PCNs) have emerged as a scalability solution for blockchains built on the concept of a payment channel: a setting that allows two nodes to safely transact between themselves in high frequencies based on…
Optimal execution, i.e., the determination of the most cost-effective way to trade volumes in continuous trading sessions, has been a topic of interest in the equity trading world for years. Electricity intraday trading slowly follows this…
Maximal Extractable Value (MEV) is value extractable by temporary monopoly power commonly found in decentralized systems. This extraction stems from a lack of user privacy upon transaction submission and the ability of a monopolist…
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…
Blockchain, an emerging decentralized security system, has been applied in many applications, such as bitcoin, smart grid, and Internet-of-Things. However, running the mining process may cost too much energy consumption and computing…
Attracted by the inherent security and privacy protection of the blockchain, incorporating blockchain into Internet of Things (IoT) has been widely studied in these years. However, the mining process requires high computational power, which…
The emerging edge computing paradigm promises to deliver superior user experience and enable a wide range of Internet of Things (IoT) applications. In this work, we propose a new market-based framework for efficiently allocating resources…
This study investigates the rapid centralization of the Ethereum builder market under the Proposer-Builder Separation (PBS) architecture. We argue that existing research, by focusing predominantly on influential order flows, lacks a…
Blockchains revolutionized centralized sectors like banking and finance by promoting decentralization and transparency. In a blockchain, information is transmitted through transactions issued by participants or applications. Miners…
Matching platforms, from ridesharing to food delivery to competitive gaming, face a fundamental operational dilemma: match agents immediately to minimize waiting costs, or delay to exploit the efficiency gains of thicker markets. Yet…