Abstract

This paper studies the contextual multi-armed bandit problem with fairness and privacy guarantees in a federated setting. It proposes a collaborative algorithm, Fed-FairX-LinUCB that achieves sublinear fairness regret and can be adapted to ensure differential privacy. The key challenge is designing a communication protocol that balances privacy and regret. The proposed protocol achieves both sub-linear fairness regret and effective use of privacy budget. Experiments validates the efficacy of both Fed-FairX-LinUCB and its private counterpart, Priv-FairX-LinUCB.

Abstract

The recently proposed Transaction Fee Mechanism (TFM) literature studies the strategic interaction between the miner of a block and the transaction creators (or users) in a blockchain. In a TFM, the miner includes transactions that maximize its utility while users submit fees for a slot in the block. The existing TFM literature focuses on satisfying standard incentive properties – which may limit widespread adoption. We argue that a TFM is “fair" to the transaction creators if it satisfies specific notions, namely Zero-fee Transaction Inclusion and Monotonicity. First, we prove that one generally cannot ensure both these properties and prevent a miner’s strategic manipulation. We also show that existing TFMs either do not satisfy these notions or do so at a high cost to the miners’ utility. As such, we introduce a novel TFM using on-chain randomness – rTFM. We prove that rTFM guarantees incentive compatibility for miners and users while satisfying our novel fairness constraints.

Abstract

Proof-of-Work is a consensus algorithm where miners solve cryptographic puzzles to mine blocks and obtain a reward through some Block Reward Mechanism (BRM). PoW blockchain faces the problem of centralization due to the formation of mining pools, where miners mine blocks as a group and distribute rewards. The rationale is to reduce the risk (variance) in reward while obtaining the same expected block reward. In this work, we address the problem of centralization due to mining pools in PoW blockchain. We propose a two-player game between the new miner joining the system and the PoW blockchain system. We model the utility for the incoming miner as a combination of (i) expected block reward, (ii) risk, and (iii) cost of switching between different mining pools. With this utility structure, we analyze the equilibrium strategy of the incoming miner for different BRMs: (a) memoryless -- block reward is history independent (e.g., Bitcoin) (b) retentive: block reward is history-dependent (e.g., Fruitchains). For memoryless BRMs, we show that depending on the coefficient of switching cost c, the protocol is decentralized when c=0 and centralized when c>c–. In addition, we show the impossibility of constructing a memoryless BRM where solo mining gives a higher payoff than forming/joining mining pools. While retentive BRM in Fruitchains reduces risk in solo mining, the equilibrium strategy for incoming miners is still to join mining pools, leading to centralization. We then propose our novel retentive BRM -- Decent-BRM. We show that under Decent-BRM, incoming miners obtain higher utility in solo mining than joining mining pools. Therefore, no mining pools are formed, and the Pow blockchain using Decent-BRM is decentralized.

Abstract

Proof-of-stake (PoS) has emerged as a natural alternative to the resource-intensive Proof-of-Work (PoW) blockchain, as was recently seen with the Ethereum Merge. PoS-based blockchains require an initial stake distribution among the participants. Typically, this initial stake distribution is called bootstrapping. This paper argues that existing bootstrapping protocols are prone to centralization. To address centralization due to bootstrapping, we propose a novel game Γbootstrap. Next, we define three conditions: (i) Individual Rationality (IR), (ii) Incentive Compatibility (IC), and (iii) (τ,δ,ϵ)− Decentralization that an emph{ideal} bootstrapping protocol must satisfy. (τ,δ,ϵ) are certain parameters to quantify decentralization. Towards this, we propose a novel centralization metric, C-NORM, to measure centralization in a PoS System. We define a centralization game -- Γcent, to analyze the efficacy of centralization metrics. We show that C-NORM effectively captures centralization in the presence of strategic players capable of launching Sybil attacks. With C-NORM, we analyze popular bootstrapping protocols such as Airdrop and Proof-of-Burn (PoB) and prove that they do not satisfy IC and IR, respectively. Motivated by the Ethereum Merge, we study W2SB (a PoW-based bootstrapping protocol) and prove it is ideal. In addition, we conduct synthetic simulations to empirically validate that W2SB bootstrapped PoS is decentralized.

Abstract

Distributed consensus protocols reach agreement among n players in the presence of f adversaries; different protocols support different values of f. Existing works study this problem for different adversary types (captured by threat models). There are three primary threat models: (i) Crash fault tolerance (CFT), (ii) Byzantine fault tolerance (BFT), and (iii) Rational fault tolerance (RFT), each more general than the previous. Agreement in repeated rounds on both (1) the proposed value in each round and (2) the ordering among agreed-upon values across multiple rounds is called Atomic BroadCast (ABC). ABC is more generalized than consensus and is employed in blockchains. This work studies ABC under the RFT threat model. We consider t byzantine and k rational adversaries among n players. We also study different types of rational players based on their utility towards (1) liveness attack, (2) censorship or (3) disagreement (forking attack). We study the problem of ABC under this general threat model in partially-synchronous networks. We show (1) ABC is impossible for n/3<(t+k)