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arXiv · 2407.08537

BriDe Arbitrager: Enhancing Arbitrage in Ethereum 2.0 via Bribery-enabled Delayed Block Production

Abstract

The advent of Ethereum 2.0 has introduced significant changes, particularly the shift to Proof-of-Stake consensus. This change presents new opportunities and challenges for arbitrage. Amidst these changes, we introduce BriDe Arbitrager, a novel tool designed for Ethereum 2.0 that leverages Bribery-driven attacks to Delay block production and increase arbitrage gains. The main idea is to allow malicious proposers to delay block production by bribing validators/proposers, thereby gaining more time to identify arbitrage opportunities. Through analysing the bribery process, we design an adaptive bribery strategy. Additionally, we propose a Delayed Transaction Ordering Algorithm to leverage the delayed time to amplify arbitrage profits for malicious proposers. To ensure fairness and automate the bribery process, we design and implement a bribery smart contract and a bribery client. As a result, BriDe Arbitrager enables adversaries controlling a limited (< 1/4) fraction of the voting powers to delay block production via bribery and arbitrage more profit. Extensive experimental results based on Ethereum historical transactions demonstrate that BriDe Arbitrager yields an average of 8.66 ETH (16,442.23 USD) daily profits. Furthermore, our approach does not trigger any slashing mechanisms and remains effective even under Proposer Builder Separation and other potential mechanisms will be adopted by Ethereum.

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BibTeXRIS

Hulin Yang, Mingzhe Li, Jin Zhang, Alia Asheralieva, Qingsong Wei, Siow Mong Rick Goh. 2024-07-11. BriDe Arbitrager: Enhancing Arbitrage in Ethereum 2.0 via Bribery-enabled Delayed Block Production. https://arxiv.org/abs/2407.08537

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