arXiv subjects

Aggelos Kiayias

Publications and source records attributed to Aggelos Kiayias.

At least 19 recordsLinked to original sources

arXiv2026

Decentralized Reliability Estimation for Low Latency Mixnets

Mix networks (mixnets) enable anonymous packet-based communication via multi-hop routing. Measuring the reliability of mix nodes serving as intermediate hops in a way that is decentralized, accurate, public, and compatible with low-latency packet routing, remains, however, a challenge: existing verifiable mixing schemes introduce routing delays ranging from minutes to hours that grow with traffic volume, severely limiting their practicality for large-scale or latency-sensitive applications. We propose a decentralized scheme that provides public reliability estimates for a mixnet's links and nodes without increasing latency for client traffic. The scheme achieves optimal complexity, independent of total network traffic, and enables accurate, low-overhead estimation even at scale. Our approach relies on verifiable measurement packets generated via a novel VRF-based routing primitive. This mechanism produces unforgeable measurement packets indistinguishable from normal traffic, while ensuring that all packet routing choices are consistent with the mixnet's routing policy. Reliability scores are derived from revealed measurement packets. The scheme remains robust under both unreliable and adversarial conditions, producing accurate reliability estimates as long as every honest node has a majority of honest predecessors and successors in the routing graph. We validate our design experimentally, demonstrating its practicality and effectiveness.

cs.CR↗

arXiv2025

One-dimensional vs. Multi-dimensional Pricing in Blockchain Protocols

Blockchain transactions consume diverse resources, foremost among them storage, but also computation, communication, and others. Efficiently charging for these resources is crucial for effective system resource allocation and long-term economic viability. The prevailing approach, one-dimensional pricing, sets a single price for a linear combination of resources. However, this often leads to under-utilization when resource capacities are limited. Multi-dimensional pricing, which independently prices each resource, offers an alternative but presents challenges in price discovery. This work focuses on the welfare achieved by these two schemes. We prove that multi-dimensional pricing is superior under stable blockchain conditions. Conversely, we show that one-dimensional pricing outperforms its multi-dimensional counterpart in transient states, exhibiting faster convergence and greater computational tractability. These results highlight a critical trade-off: while multi-dimensional pricing offers efficiency gains at equilibrium, its implementation incurs costs associated with system transitions. Our findings underscore the necessity for a deeper understanding of these transient effects before widespread adoption. Finally, we propose mechanisms that aim to mitigate some of these issues, paving the way for future research.

cs.GT↗

arXiv2025

Pool Formation in Oceanic Games: Shapley Value and Proportional Sharing

We study a game-theoretic model for pool formation in Proof of Stake blockchain protocols. In such systems, stakeholders can form pools as a means of obtaining regular rewards from participation in ledger maintenance, with the power of each pool being dependent on its collective stake. The question we are interested in is the design of mechanisms that suitably split rewards among pool members and achieve favorable properties in the resulting pool configuration. With this in mind, we initiate a non-cooperative game-theoretic analysis of the well known Shapley value scheme from cooperative game theory into the context of blockchains. In particular, we focus on the oceanic model of games, proposed by Milnor and Shapley (1978), which is suitable for populations where a small set of large players coexists with a big mass of rather small, negligible players. This provides an appropriate level of abstraction for pool formation processes among the stakeholders. We provide comparisons between the Shapley mechanism and the more standard proportional scheme, in terms of attained decentralization, via a Price of Stability analysis and in terms of susceptibility to Sybil attacks, i.e., the strategic splitting of a players' stake with the intention of participating in multiple pools for increased profit. Interestingly, while the widely deployed proportional scheme appears to have certain advantages, the Shapley value scheme, which rewards higher the most pivotal players, emerges as a competitive alternative, by being able to bypass some of the downsides of proportional sharing, while also not being far from optimal guarantees w.r.t. decentralization. Finally, we complement our study with some variations of proportional sharing, where the profit is split in proportion to a superadditive or a subadditive function of the stake, showing that the Shapley value scheme still maintains the same advantages.

cs.GT↗

arXiv2025

Airdrop Games

Launching a new blockchain system or application is frequently facilitated by a so called airdrop, where the system designer chooses a pre-existing set of potentially interested parties and allocates newly minted tokens to them with the expectation that they will participate in the system - such engagement, especially if it is of significant level, facilitates the system and raises its value and also the value of its newly minted token, hence benefiting the airdrop recipients. A number of challenging questions befuddle designers in this setting, such as how to choose the set of interested parties and how to allocate tokens to them. To address these considerations we put forward a game-theoretic model for such airdrop games. Our model can be used to guide the designer's choices based on the way the system's value depends on participation (modeled by a ''technology function'' in our framework) and the costs that participants incur. We identify both bad and good equilibria and identify the settings and the choices that can be made where the designer can influence the players towards good equilibria in an expedient manner.

cs.GT↗

arXiv2025

Single-token vs Two-token Blockchain Tokenomics

We study long-term equilibria that arise in the token monetary policy, or tokenomics, design of proof-of-stake (PoS) blockchain systems that engage utility maximizing users and validators. Validators are system maintainers who get rewarded with tokens for performing the work necessary for the system to function properly, while users compete and pay with such tokens for getting a desired portion of the system service. We study how the system service provision and suitable rewards schemes together can lead to equilibria with the following desirable characteristics (1) viability: the system keeps parties engaged, (2) decentralization and skin-in-the-game: multiple sufficiently invested validators are participating, (3) stability: the price path of the underlying token used to transact with the system does not change widely over time, and (4) feasibility: the mechanism is easy to implement as a smart contract, e.g., it does not require a fiat reserve on-chain to perform token {\em buybacks} or to perform bookkeeping of exponentially growing token holdings. Our analysis enables us to put forward a novel generic mechanism for blockchain monetary policy that we call quantitative rewarding (QR). We investigate how to implement QR in single-token and two-token proof of stake (PoS) blockchain systems. The latter are systems that utilize one token for the users to pay the transaction fees and a different token for the validators to participate in the PoS protocol and get rewarded. Our approach demonstrates a concrete advantage of the two-token setting in terms of the ability of the QR mechanism to be realized effectively and provide good equilibria. Our analysis also reveals an inherent limitation of the single token setting in terms of implementing an effective blockchain monetary policy - a distinction that is, to the best of our knowledge, highlighted for the first time.

cs.GT↗

arXiv2025

SoK: Measuring Blockchain Decentralization

In the context of blockchain systems, the importance of decentralization is undermined by the lack of a widely accepted methodology to measure it. To address this gap, we set out a systematization effort targeting the decentralization measurement workflow. To facilitate our systematization, we put forth a framework that categorizes all measurement techniques used in previous work based on the resource they target, the methods they use to extract resource allocation, and the functions they apply to produce the final measurements. We complement this framework with an empirical analysis designed to evaluate whether the various pre-processing steps and metrics used in prior work capture the same underlying concept of decentralization. Our analysis brings about a number of novel insights and observations. First, the seemingly innocuous choices performed during data extraction, such as the size of estimation windows or the application of thresholds that affect the resource distribution, have important repercussions when calculating the level of decentralization. Second, exploratory factor analysis suggests that in Proof-of-Work (PoW) blockchains, participation on the consensus layer is not correlated with decentralization, but rather captures a distinct signal, unlike in Proof-of-Stake (PoS) systems, where the different metrics align under a single factor. These findings challenge the long-held assumption within the blockchain community that higher participation drives higher decentralization. Finally, we combine the results of our empirical analysis with first-principles reasoning to derive practical recommendations for researchers that set out to measure blockchain decentralization, and we further systematize the existing literature in line with these recommendations.

cs.CR↗

arXiv2024

Balancing Participation and Decentralization in Proof-of-Stake Cryptocurrencies

Proof-of-stake blockchain protocols have emerged as a compelling paradigm for organizing distributed ledger systems. In proof-of-stake (PoS), a subset of stakeholders participate in validating a growing ledger of transactions. For the safety and liveness of the underlying system, it is desirable for the set of validators to include multiple independent entities as well as represent a non-negligible percentage of the total stake issued. In this paper, we study a secondary form of participation in the transaction validation process, which takes the form of stake delegation, whereby an agent delegates their stake to an active validator who acts as a stake pool operator. We study payment schemes that reward agents as a function of their collective actions regarding stake pool operation and delegation. Such payment schemes serve as a mechanism to incentivize participation in the validation process while maintaining decentralization. We observe natural trade-offs between these objectives and the total expenditure required to run the relevant payment schemes. Ultimately, we provide a family of payment schemes which can strike different balances between these competing objectives at equilibrium in a Bayesian game theoretic framework.

cs.GT↗

arXiv2024

Blockchain Bribing Attacks and the Efficacy of Counterincentives

We analyze bribing attacks in Proof-of-Stake distributed ledgers from a game theoretic perspective. In bribing attacks, an adversary offers participants a reward in exchange for instructing them how to behave, with the goal of attacking the protocol's properties. Specifically, our work focuses on adversaries that target blockchain safety. We consider two types of bribing, depending on how the bribes are awarded: i) guided bribing, where the bribe is given as long as the bribed party behaves as instructed; ii) effective bribing, where bribes are conditional on the attack's success, w.r.t. well-defined metrics. We analyze each type of attack in a game theoretic setting and identify relevant equilibria. In guided bribing, we show that the protocol is not an equilibrium and then describe good equilibria, where the attack is unsuccessful, and a negative one, where all parties are bribed such that the attack succeeds. In effective bribing, we show that both the protocol and the "all bribed" setting are equilibria. Using the identified equilibria, we then compute bounds on the Prices of Stability and Anarchy. Our results indicate that additional mitigations are needed for guided bribing, so our analysis concludes with incentive-based mitigation techniques, namely slashing and dilution. Here, we present two positive results, that both render the protocol an equilibrium and achieve maximal welfare for all parties, and a negative result, wherein an attack becomes more plausible if it severely affects the ledger's token's market price.

cs.GT↗

arXiv2024

SoK: A Stratified Approach to Blockchain Decentralization

Decentralization has been touted as the principal security advantage which propelled blockchain systems at the forefront of developments in the financial technology space. Its exact semantics nevertheless remain highly contested and ambiguous, with proponents and critics disagreeing widely on the level of decentralization offered by existing systems. To address this, we put forth a systematization of the current landscape with respect to decentralization and we derive a methodology that can help direct future research towards defining and measuring decentralization. Our approach dissects blockchain systems into multiple layers, or strata, each possibly encapsulating multiple categories, and it enables a unified method for measuring decentralization in each one. Our layers are (1) hardware, (2) software, (3) network, (4) consensus, (5) economics ("tokenomics"), (6) client API, (7) governance, and (8) geography. Armed with this stratification, we examine for each layer which pertinent properties of distributed ledgers (safety, liveness, privacy, stability) can be at risk due to centralization and in what way. We also introduce a practical test, the "Minimum Decentralization Test" which can provide quick insights about the decentralization state of a blockchain system. To demonstrate how our stratified methodology can be used in practice, we apply it fully (layer by layer) to Bitcoin, and we provide examples of systems which comprise one or more "problematic" layers that cause them to fail the MDT. Our work highlights the challenges in measuring and achieving decentralization, and suggests various potential directions where future research is needed.

cs.CR↗

arXiv2023

Blockchain Participation Games

We study game-theoretic models for capturing participation in blockchain systems. Permissionless blockchains can be naturally viewed as games, where a set of potentially interested users is faced with the dilemma of whether to engage with the protocol or not. Engagement here implies that the user will be asked to complete certain tasks, whenever they are selected to contribute (typically according to some stochastic process) and be rewarded if they choose to do so. Apart from the basic dilemma of engaging or not, even more strategic considerations arise in settings where users may be able to declare participation and then retract before completing their tasks (but are still able to receive rewards) or are rewarded independently of whether they contribute. Such variations occur naturally in the blockchain setting due to the complexity of tracking ``on-chain'' the behavior of the participants. We capture these participation considerations offering a series of models that enable us to reason about the basic dilemma, the case where retraction effects influence the outcome and the case when payments are given universally irrespective of the stochastic process. In all cases we provide characterization results or necessary conditions on the structure of Nash equilibria. Our findings reveal that appropriate reward mechanisms can be used to stimulate participation and avoid negative effects of free riding, results that are in line but also can inform real world blockchain system deployments.

cs.GT↗

arXiv2023

Would Friedman Burn your Tokens?

Cryptocurrencies come with a variety of tokenomic policies as well as aspirations of desirable monetary characteristics that have been described by proponents as 'sound money' or even 'ultra sound money.' These propositions are typically devoid of economic analysis so it is a pertinent question how such aspirations fit in the wider context of monetary economic theory. In this work, we develop a framework that determines the optimal token supply policy of a cryptocurrency, as well as investigate how such policy may be algorithmically implemented. Our findings suggest that the optimal policy complies with the Friedman rule and it is dependent on the risk free rate, as well as the growth of the cryptocurrency platform. Furthermore, we demonstrate a wide set of conditions under which such policy can be implemented via contractions and expansions of token supply that can be realized algorithmically with block rewards, taxation of consumption and burning the proceeds, and blockchain oracles.

econ.TH↗

arXiv2023

Tiered Mechanisms for Blockchain Transaction Fees

Blockchain systems come with the promise of being inclusive for a variety of decentralized applications (DApps) that can serve different purposes and have different urgency requirements. Despite this, the transaction fee mechanisms currently deployed in popular platforms as well as previous modeling attempts for the associated mechanism design problem focus on an approach that favors increasing prices in favor of those clients who value immediate service during periods of congestion. To address this issue, we introduce a model that captures the traffic diversity of blockchain systems and a tiered pricing mechanism that is capable of implementing more inclusive transaction policies. In this model, we demonstrate formally that EIP-1559, the transaction fee mechanism currently used in Ethereum, is not inclusive and demonstrate experimentally that its prices surge horizontally during periods of congestion. On the other hand, we prove formally that our mechanism achieves stable prices in expectation and we provide experimental results that establish that prices for transactions can be kept low for low urgency transactions, resulting in a diverse set of transaction types entering the blockchain. At the same time, perhaps surprisingly, our mechanism does not necessarily sacrifice revenue since the lowering of the prices for low urgency transactions can be covered from high urgency ones due to the price discrimination ability of the mechanism.

cs.GT↗

arXiv2023

Quantum Multi-Solution Bernoulli Search with Applications to Bitcoin's Post-Quantum Security

A proof of work (PoW) is an important cryptographic construct enabling a party to convince others that they invested some effort in solving a computational task. Arguably, its main impact has been in the setting of cryptocurrencies such as Bitcoin and its underlying blockchain protocol, which received significant attention in recent years due to its potential for various applications as well as for solving fundamental distributed computing questions in novel threat models. PoWs enable the linking of blocks in the blockchain data structure and thus the problem of interest is the feasibility of obtaining a sequence (chain) of such proofs. In this work, we examine the hardness of finding such chain of PoWs against quantum strategies. We prove that the chain of PoWs problem reduces to a problem we call multi-solution Bernoulli search, for which we establish its quantum query complexity. Effectively, this is an extension of a threshold direct product theorem to an average-case unstructured search problem. Our proof, adding to active recent efforts, simplifies and generalizes the recording technique of Zhandry (Crypto'19). As an application, we revisit the formal treatment of security of the core of the Bitcoin consensus protocol, the Bitcoin backbone (Eurocrypt'15), against quantum adversaries, while honest parties are classical and show that protocol's security holds under a quantum analogue of the classical ``honest majority'' assumption. Our analysis indicates that the security of Bitcoin backbone is guaranteed provided the number of adversarial quantum queries is bounded so that each quantum query is worth $O(p^{-1/2})$ classical ones, where $p$ is the success probability of a single classical query to the protocol's underlying hash function. Somewhat surprisingly, the wait time for safe settlement in the case of quantum adversaries matches the safe settlement time in the classical case.

quant-ph↗

arXiv2023

SoK: Blockchain Governance

Blockchain systems come with a promise of decentralization that often stumbles on a roadblock when key decisions about modifying the software codebase need to be made. This is attested by the fact that both of the two major cryptocurrencies, Bitcoin and Ethereum, have undergone hard forks that resulted in the creation of alternative systems, creating confusion and opportunities for fraudulent activities. These events, and numerous others, underscore the importance of Blockchain governance, namely the set of processes that blockchain platforms utilize in order to perform decision-making and converge to a widely accepted direction for the system to evolve. While a rich topic of study in other areas, governance of blockchain platforms is lacking a well established set of methods and practices that are adopted industry wide. This makes the topic of blockchain governance a fertile domain for a thorough systematization that we undertake in this work. We start by distilling a comprehensive array of properties for sound governance systems drawn from academic sources as well as grey literature of election systems and blockchain white papers. These are divided into seven categories, confidentiality, verifiability, accountability, sustainability, Pareto efficiency, suffrage and liveness that capture the whole spectrum of desiderata of governance systems. We proceed to classify ten well-documented blockchain systems. While all properties are satisfied, even partially, by at least one system, no system that satisfies most of them. Our work lays out a foundation for assessing blockchain governance processes. While it highlights shortcomings and deficiencies in currently deployed systems, it can also be a catalyst for improving these processes to the highest possible standard with appropriate trade-offs, something direly needed for blockchain platforms to operate effectively in the long term.

cs.CR↗

arXiv2022

Minotaur: Multi-Resource Blockchain Consensus

Resource-based consensus is the backbone of permissionless distributed ledger systems. The security of such protocols relies fundamentally on the level of resources actively engaged in the system. The variety of different resources (and related proof protocols, some times referred to as PoX in the literature) raises the fundamental question whether it is possible to utilize many of them in tandem and build multi-resource consensus protocols. The challenge in combining different resources is to achieve fungibility between them, in the sense that security would hold as long as the cumulative adversarial power across all resources is bounded. In this work, we put forth Minotaur, a multi-resource blockchain consensus protocol that combines proof-of-work (PoW) and proof-of-stake (PoS), and we prove it optimally fungible. At the core of our design, Minotaur operates in epochs while continuously sampling the active computational power to provide a fair exchange between the two resources, work and stake. Further, we demonstrate the ability of Minotaur to handle a higher degree of work fluctuation as compared to the Bitcoin blockchain; we also generalize Minotaur to any number of resources. We demonstrate the simplicity of Minotaur via implementing a full stack client in Rust (available open source). We use the client to test the robustness of Minotaur to variable mining power and combined work/stake attacks and demonstrate concrete empirical evidence towards the suitability of Minotaur to serve as the consensus layer of a real-world blockchain.

cs.CR↗

arXiv2022

Optimal Bootstrapping of PoW Blockchains

Proof of Work (PoW) blockchains are susceptible to adversarial majority mining attacks in the early stages due to incipient participation and corresponding low net hash power. Bootstrapping ensures safety and liveness during the transient stage by protecting against a majority mining attack, allowing a PoW chain to grow the participation base and corresponding mining hash power. Liveness is especially important since a loss of liveness will lead to loss of honest mining rewards, decreasing honest participation, hence creating an undesired spiral; indeed existing bootstrapping mechanisms offer especially weak liveness guarantees. In this paper, we propose Advocate, a new bootstrapping methodology, which achieves two main results: (a) optimal liveness and low latency under a super-majority adversary for the Nakamoto longest chain protocol and (b) immediate black-box generalization to a variety of parallel-chain based scaling architectures, including OHIE and Prism. We demonstrate via a full-stack implementation the robustness of Advocate under a 90% adversarial majority.

cs.CR↗

arXiv2022

Babel Fees via Limited Liabilities

Custom currencies (ERC-20) on Ethereum are wildly popular, but they are second class to the primary currency Ether. Custom currencies are more complex and more expensive to handle than the primary currency as their accounting is not natively performed by the underlying ledger, but instead in user-defined contract code. Furthermore, and quite importantly, transaction fees can only be paid in Ether. In this paper, we focus on being able to pay transaction fees in custom currencies. We achieve this by way of a mechanism permitting short term liabilities to pay transaction fees in conjunction with offers of custom currencies to compensate for those liabilities. This enables block producers to accept custom currencies in exchange for settling liabilities of transactions that they process. We present formal ledger rules to handle liabilities together with the concept of babel fees to pay transaction fees in custom currencies. We also discuss how clients can determine what fees they have to pay, and we present a solution to the knapsack problem variant that block producers have to solve in the presence of babel fees to optimise their profits.

cs.CR↗

arXiv2022

Blockchain Nash Dynamics and the Pursuit of Compliance

We study Nash-dynamics in the context of blockchain protocols. We introduce a formal model, within which one can assess whether the Nash dynamics can lead utility-maximizing participants to defect from the "honest" protocol operation, towards variations that exhibit one or more undesirable infractions, such as abstaining from participation and producing conflicting protocol histories. Blockchain protocols that do not lead to such infraction states are said to be compliant. Armed with this model, we evaluate the compliance of various Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocol families, with respect to different utility functions and reward schemes, leading to the following results: i) PoS ledgers under resource-proportional rewards can be compliant if costs are negligible, but non-compliant if costs are significant; ii) PoW and PoS under block-proportional rewards exhibit different compliance behavior, depending on the lossiness of the network; iii) PoS ledgers can be compliant w.r.t. one infraction, i.e., producing conflicting messages, but non-compliant (and non-equilibria) w.r.t. abstaining or an attack we call selfish signing; iv) taking externalities, such as exchange rate fluctuations, into account, we quantify the benefit of economic penalties, in the context of PoS protocols, in disincentivizing particular infractions.

cs.CR↗