Related papers: Quantifying the Value of Revert Protection
Blockchain networks are facing increasingly heterogeneous computational demands, and in response, protocol designers have started building specialized infrastructure to supply that demand. This paper introduces Resonance: a new kind of…
This paper proposes a novel method to generate bid bounds that can serve as offer caps for energy storage in electricity markets to help reduce system costs and regulate potential market power exercises. We derive the bid bounds based on a…
All public blockchains are secured by a proof of opportunity cost among block producers. For example, the security offered by proof-of-work (PoW) systems, like Bitcoin, is due to spent computation; it is work precisely because it cannot be…
We study the upper hedging price for contingent claims in market models with strong types of arbitrage: increasing profit, strong arbitrage, and arbitrage of the first kind. The existence of arbitrage may make the price smaller than if it…
Transaction fees represent a major incentive in many blockchain systems as a way to incentivize processing transactions. Unfortunately, they also introduce an enormous amount of incentive asymmetry compared to alternatives like fixed block…
This paper presents an adversary model and a simulation framework specifically tailored for analyzing attacks on distributed systems composed of multiple distributed protocols, with a focus on assessing the security of blockchain networks.…
Permissionless blockchains such as Bitcoin have excelled at financial services. Yet, opportunistic traders extract monetary value from the mesh of decentralized finance (DeFi) smart contracts through so-called blockchain extractable value…
Transactions submitted through the blockchain peer-to-peer (P2P) network may leak out exploitable information. We study the economic incentives behind the adoption of blockchain dark venues, where users' transactions are observable only by…
We present and validate a novel mathematical model of the blockchain mining process and use it to conduct an economic evaluation of the double-spend attack, which is fundamental to all blockchain systems. Our analysis focuses on the value…
This paper describes an optimization model for setting bid levels for certain types of advertisements on web pages. This model is non-convex, but we are able to obtain optimal or near-optimal solutions rapidly using branch and cut…
The problem of market clearing is to set a price for an item such that quantity demanded equals quantity supplied. In this work, we cast the problem of predicting clearing prices into a learning framework and use the resulting models to…
This paper presents a comprehensive framework for transaction posting and pricing in Layer 2 (L2) blockchain systems, focusing on challenges stemming from fluctuating Layer 1 (L1) gas fees and the congestion issues within L2 networks.…
This paper studies risk in a stochastic auction which facilitates the integration of renewable generation in electricity markets. We model market participants who are risk averse and reflect their risk aversion through coherent risk…
Retroactive Public Goods Funding (RetroPGF) rewards blockchain projects based on proven impact rather than future promises. This paper reviews voting mechanisms for Optimism's RetroPGF, where "badgeholders" allocate rewards to valuable…
Designing an incentive-compatible auction mechanism that maximizes the auctioneer's revenue while minimizes the bidders' ex-post regret is an important yet intricate problem in economics. Remarkable progress has been achieved through…
Auction is applied for trade with various mechanisms. A simple but practical question is which mechanism, typically first-price or second-price auctions, is preferred from the perspective of bidders or sellers. A celebrated answer is…
The gas fee, paid for inclusion in the blockchain, is analyzed in two parts. First, we consider how effort in terms of resources required to process and store a transaction turns into a gas limit, which, through a fee, comprised of the base…
We study online learning in repeated first-price auctions where a bidder, only observing the winning bid at the end of each auction, learns to adaptively bid in order to maximize her cumulative payoff. To achieve this goal, the bidder faces…
Public blockchains group submitted transactions into batches, called blocks. A natural question is how to determine which transactions are included in these batches. In this note, we show a gap between the welfare of so-called `fair'…
The Bitcoin protocol allows to save arbitrary data on the blockchain through a special instruction of the scripting language, called OP_RETURN. A growing number of protocols exploit this feature to extend the range of applications of the…