arXiv subjects

Paolo Penna

Publications and source records attributed to Paolo Penna.

At least 19 recordsLinked to original sources

arXiv2026

Reserve Depletion and Security Runway in Proof-of-Stake Systems

Many proof-of-stake protocols finance validator rewards from two sources: transaction fees and a finite reserve of tokens. This creates a dynamic hand-off problem. Early in the life of the system, fees may be too small to fund the target level of security; later, fees may become sufficient. The central question is whether the reserve provides enough runway for the protocol to remain secure until this fee-only region is reached. We study this problem in a discrete-time stochastic model of validator participation. Token price and transaction demand fluctuate over time, while validators choose participation strategically. We solve the validator entry game and derive an exact state-dependent reserve threshold, i.e., the minimal reserve stock necessary and sufficient to sustain a target security level. This threshold separates three regions: infeasibility, reserve-dependent security, and fee-only security. Security fails if the reserve first falls below the state-dependent threshold, and a successful hand-off occurs exactly if the fee-only region is reached before that failure time. We derive stress-test guarantees that convert lower confidence bands for token price and demand into reserve requirements, and obtain explicit failure-probability and expected hand-off-time bounds. Finally, we extend the model to forward-looking validators and derive the Markov participation condition that captures how current participation affects future reserve-funded rewards. The main implication is that reserve policy should not be evaluated by nominal depletion dates or steady-state reward ratios alone. A protocol can have a large nominal reserve and still be close to security failure after adverse price or demand shocks. Conversely, once demand crosses the fee-only threshold, the reserve becomes redundant for security. This paper provides a tractable equilibrium framework for stress-testing this transition.

cs.GT↗

arXiv2025

Algorithmic Monetary Policies for Blockchain Participation Games

A central challenge in blockchain tokenomics is aligning short-term performance incentives with long-term decentralization goals. We propose a framework for algorithmic monetary policies that navigates this tradeoff in repeated participation games. Agents, characterized by type (capability) and stake, choose to participate or abstain at each round; the policy (probabilistically) selects high-type agents for task execution (maximizing throughput) while distributing rewards to sustain decentralization. We analyze equilibria under two agent behaviors: myopic (short-term utility maximization) and foresighted (multi-round planning). For myopic agents, performance-centric policies risk centralization, but foresight enables stable decentralization with some volatility to the token value. We further discuss virtual stake--a hybrid of type and stake--as an alternative approach. We show that the initial virtual stake distribution critically impacts long-term outcomes, suggesting that policies must indirectly manage decentralization.

cs.GT↗

arXiv2025

On Sybil-proofness in Restaking Networks

Restaking protocols expand validator responsibilities beyond consensus, but their security depends on resistance to Sybil attacks. We introduce a formal framework for Sybil-proofness in restaking networks, distinguishing between two types of attacks, one in which other Sybil identities are kept out of an attack and one where multiple Sybil identities attack. We analyze marginal and multiplicative slashing mechanisms and characterize the conditions under which each deters Sybil strategies. We then prove an impossibility theorem: no slashing mechanism can simultaneously prevent both attack types. Finally, we study the impact of network structure through random graph models: while Erd\"os-R\'enyi networks remain Sybil-proof, even minimal heterogeneity in a two-block stochastic block model makes Sybil attacks profitable. These results reveal fundamental limits of mechanism design for restaking and highlight the critical role of network topology.

cs.GT↗

arXiv2025

An Optimal Sorting Algorithm for Persistent Random Comparison Faults

We consider the problem of sorting $n$ elements subject to persistent random comparison errors. In this problem, each comparison between two elements can be wrong with some fixed (small) probability $p$, and comparing the same pair of elements multiple times always yields the same result. Sorting perfectly in this model is impossible, and the objective is to minimize the dislocation of each element in the output sequence, i.e., the difference between its position in the sequence and its true rank. In this paper, we present the first $O(n\log n)$-time sorting algorithm that guarantees both $O(\log n)$ maximum dislocation and $O(n)$ total dislocation with high probability when $p<\frac{1}{4}$. This settles the time complexity sorting with persistent comparison errors in the given range of $p$ and shows that comparison errors do not increase its computational difficulty. Indeed, $\Omega(n\log n)$ time is necessary to archive a maximum dislocation of $O(\log n)$ even without comparison errors. Moreover, we prove that no algorithm can guarantee a maximum dislocation of $o(\log n)$ with high probability, nor a total dislocation of $o(n)$ in expectation. To develop our sorting algorithm, we solve two related sub-problems, which might be of independent interest. More precisely, we show that $O(\log n)$ time suffices to find a position in which to insert a new element $x$ in an almost-sorted sequence $S$ of $n$ elements having dislocation at most $d=\Omega(\log n)$, so that the dislocation of $x$ in the resulting sequence is $O(d)$ with high probability (which can be equivalently thought as the problem of estimating the rank of $x$ in $S$). We also show that the maximum (resp. total) dislocation of an approximately sorted sequence $S$ of $n$ elements can be lowered to $O(\log n)$ (resp. $O(n)$) in $O(nd)$ time, w.h.p., where $d$ is an upper bound on the maximum dislocation of $S$.

cs.DS↗

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↗

arXiv2024

Reward Schemes and Committee Sizes in Proof of Stake Governance

In this paper, we investigate the impact of reward schemes and committee sizes motivated by governance systems over blockchain communities. We introduce a model for elections with a binary outcome space where there is a ground truth (i.e., a "correct" outcome), and where stakeholders can only choose to delegate their voting power to a set of delegation representatives (DReps). Moreover, the effort (cost) invested by each DRep positively influences both (i) her ability to vote correctly and (ii) the total delegation that she attracts, thereby increasing her voting power. This model constitutes the natural counterpart of delegated proof-of-stake (PoS) protocols, where delegated stakes are used to elect the block builders. As a way to motivate the representatives to exert effort, a reward scheme can be used based on the delegation attracted by each DRep. We analyze both the game-theoretic aspects and the optimization counterpart of this model. Our primary focus is on selecting a committee that maximizes the probability of reaching the correct outcome, given a fixed monetary budget allocated for rewarding the delegates. Our findings provide insights into the design of effective reward mechanisms and optimal committee structures (i.e., how many DReps are enough) in these PoS-like governance systems.

cs.GT↗

arXiv2024

Serial Monopoly on Blockchains with Quasi-patient Users

In the face of limited block size, miners (e.g., in Bitcoin) prioritize high-bid transactions, forming a large part of their revenue. If the block size were to expand significantly, meeting all transaction demand due to infrastructure or protocol improvements, bids could drop to zero or to a minimum fee, reducing mining incentives and potentially affecting security. To address this, Lavi et al. (2022) introduced a monopolistic pricing mechanism where miners only include transactions paying a minimum price, ensuring some revenue but resulting in an unbounded loss in welfare. Nisan (2023) expands this by modeling bidders as patient, who wait indefinitely long for lower prices, causing price fluctuations even with stable demand. In order to capture users' diminishing interest in having their transactions added to the ledger over time, we consider a more realistic setting with quasi-patient users, where only a fraction $\delta \in [0,1]$ of pending transactions remains in the next round. This richer model encompasses both Lavi et al.'s impatient users ($\delta=0$) and Nisan's patient users ($\delta=1$) as special cases. We demonstrate that Nisan's fluctuating dynamics persist for $\delta$ close to 1, while for $\delta$ close to 0, the dynamics resemble the impatient case. For $\delta \in (0,1)$, we establish new bounds on price dynamics, revealing unexpected effects. Unlike the fully patient case, the bounds of the dynamics for $\delta<1$ depend on the demand curve and undergo a "transition phase". For some $\delta$, the model mirrors the fully patient setting, and for smaller $\delta' < \delta$, it stabilizes at the highest monopolist price, thus collapsing to the impatient case. We provide quantitative bounds and analytical results, showing that the bounds for $\delta=1$ are generally not tight for $\delta<1$, and we give guarantees on the minimum ("admission") price for transactions.

cs.GT↗

arXiv2024

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↗

arXiv2023

Improving Explainability of Disentangled Representations using Multipath-Attribution Mappings

Explainable AI aims to render model behavior understandable by humans, which can be seen as an intermediate step in extracting causal relations from correlative patterns. Due to the high risk of possible fatal decisions in image-based clinical diagnostics, it is necessary to integrate explainable AI into these safety-critical systems. Current explanatory methods typically assign attribution scores to pixel regions in the input image, indicating their importance for a model's decision. However, they fall short when explaining why a visual feature is used. We propose a framework that utilizes interpretable disentangled representations for downstream-task prediction. Through visualizing the disentangled representations, we enable experts to investigate possible causation effects by leveraging their domain knowledge. Additionally, we deploy a multi-path attribution mapping for enriching and validating explanations. We demonstrate the effectiveness of our approach on a synthetic benchmark suite and two medical datasets. We show that the framework not only acts as a catalyst for causal relation extraction but also enhances model robustness by enabling shortcut detection without the need for testing under distribution shifts.

cs.CV↗

arXiv2021

Solving Zero-Sum Games through Alternating Projections

In this work, we establish near-linear and strong convergence for a natural first-order iterative algorithm that simulates Von Neumann's Alternating Projections method in zero-sum games. First, we provide a precise analysis of Optimistic Gradient Descent/Ascent (OGDA) -- an optimistic variant of Gradient Descent/Ascent -- for \emph{unconstrained} bilinear games, extending and strengthening prior results along several directions. Our characterization is based on a closed-form solution we derive for the dynamics, while our results also reveal several surprising properties. Indeed, our main algorithmic contribution is founded on a geometric feature of OGDA we discovered; namely, the limit points of the dynamics are the orthogonal projection of the initial state to the space of attractors. Motivated by this property, we show that the equilibria for a natural class of \emph{constrained} bilinear games are the intersection of the unconstrained stationary points with the corresponding probability simplexes. Thus, we employ OGDA to implement an Alternating Projections procedure, converging to an $ε$-approximate Nash equilibrium in $\widetilde{\mathcal{O}}(\log^2(1/ε))$ iterations. Our techniques supplement the recent work in pursuing last-iterate guarantees in min-max optimization. Finally, we illustrate an -- in principle -- trivial reduction from any game to the assumed class of instances, without altering the space of equilibria.

math.OC↗

arXiv2021

Statistical and computational thresholds for the planted $k$-densest sub-hypergraph problem

In this work, we consider the problem of recovery a planted $k$-densest sub-hypergraph on $d$-uniform hypergraphs. This fundamental problem appears in different contexts, e.g., community detection, average-case complexity, and neuroscience applications as a structural variant of tensor-PCA problem. We provide tight \emph{information-theoretic} upper and lower bounds for the exact recovery threshold by the maximum-likelihood estimator, as well as \emph{algorithmic} bounds based on approximate message passing algorithms. The problem exhibits a typical statistical-to-computational gap observed in analogous sparse settings that widen with increasing sparsity of the problem. The bounds show that the signal structure impacts the location of the statistical and computational phase transition that the known existing bounds for the tensor-PCA model do not capture. This effect is due to the generic planted signal prior that this latter model addresses.

cs.LG↗

arXiv2021

On maximum-likelihood estimation in the all-or-nothing regime

We study the problem of estimating a rank-1 additive deformation of a Gaussian tensor according to the \emph{maximum-likelihood estimator} (MLE). The analysis is carried out in the sparse setting, where the underlying signal has a support that scales sublinearly with the total number of dimensions. We show that for Bernoulli distributed signals, the MLE undergoes an \emph{all-or-nothing} (AoN) phase transition, already established for the minimum mean-square-error estimator (MMSE) in the same problem. The result follows from two main technical points: (i) the connection established between the MLE and the MMSE, using the first and second-moment methods in the constrained signal space, (ii) a recovery regime for the MMSE stricter than the simple error vanishing characterization given in the standard AoN, that is here proved as a general result.

cs.IT↗

arXiv2020

A Robust Framework for Analyzing Gradient-Based Dynamics in Bilinear Games

In this work, we establish a frequency-domain framework for analyzing gradient-based algorithms in linear minimax optimization problems; specifically, our approach is based on the Z-transform, a powerful tool applied in Control Theory and Signal Processing in order to characterize linear discrete-time systems. We employ our framework to obtain the first tight analysis of stability of Optimistic Gradient Descent/Ascent (OGDA), a natural variant of Gradient Descent/Ascent that was shown to exhibit last-iterate convergence in bilinear games by Daskalakis et al. \cite{DBLP:journals/corr/abs-1711-00141}. Importantly, our analysis is considerably simpler and more concise than the existing ones. Moreover, building on the intuition of OGDA, we consider a general family of gradient-based algorithms that augment the memory of the optimization through multiple historical steps. We reduce the convergence -- to a saddle-point -- of the dynamics in bilinear games to the stability of a polynomial, for which efficient algorithmic schemes are well-established. As an immediate corollary, we obtain a broad class of algorithms -- that contains OGDA as a special case -- with a last-iterate convergence guarantee to the space of Nash equilibria of the game.

math.OC↗

arXiv2020

Sequential Solutions in Machine Scheduling Games

We consider the classical machine scheduling, where $n$ jobs need to be scheduled on $m$ machines, and where job $j$ scheduled on machine $i$ contributes $p_{i,j}\in \mathbb{R}$ to the load of machine $i$, with the goal of minimizing the makespan, i.e., the maximum load of any machine in the schedule. We study inefficiency of schedules that are obtained when jobs arrive sequentially one by one, and the jobs choose themselves the machine on which they will be scheduled, aiming at being scheduled on a machine with small load. We measure the inefficiency of a schedule as the ratio of the makespan obtained in the worst-case equilibrium schedule, and of the optimum makespan. This ratio is known as the \emph{sequential price of anarchy}. We also introduce two alternative inefficiency measures, which allow for a favorable choice of the order in which the jobs make their decisions. As our first result, we disprove the conjecture of Hassin and Yovel claiming that the sequential price of anarchy for $m=2$ machines is at most 3. We show that the sequential price of anarchy grows at least linearly with the number $n$ of players, i.e., we show that $SPoA = Ω(n)$. Furthermore, we show that there exists an order of the jobs, resulting in makespan that is at most linearly larger than the optimum makespan. To the end, we show that if an authority can change the order of the jobs adaptively to the decisions made by the jobs so far (but cannot influence the decisions of the jobs), then there exists an adaptive ordering in which the jobs end up in an optimum schedule.

cs.GT↗

arXiv2020

Two-way Greedy: Algorithms for Imperfect Rationality

The realization that selfish interests need to be accounted for in the design of algorithms has produced many contributions in computer science under the umbrella of algorithmic mechanism design. Novel algorithmic properties and paradigms have been identified and studied. Our work stems from the observation that selfishness is different from rationality; agents will attempt to strategize whenever they perceive it to be convenient according to their imperfect rationality. Recent work has focused on a particular notion of imperfect rationality, namely absence of contingent reasoning skills, and defined obvious strategyproofness (OSP) as a way to deal with the selfishness of these agents. Essentially, this definition states that to care for the incentives of these agents, we need not only pay attention about the relationship between input and output, but also about the way the algorithm is run. However, it is not clear what algorithmic approaches must be used for OSP. In this paper, we show that, for binary allocation problems, OSP is fully captured by a combination of two well-known algorithmic techniques: forward and reverse greedy. We call two-way greedy this algorithmic design paradigm. Our main technical contribution establishes the connection between OSP and two-way greedy. We build upon the recently introduced cycle monotonicity technique for OSP. By means of novel structural properties of cycles and queries of OSP mechanisms, we fully characterize these mechanisms in terms of extremal implementations. These are protocols that ask each agent to consistently separate one extreme of their domain at the current history from the rest. Through the connection with the greedy paradigm, we are able to import a host of approximation bounds to OSP and strengthen the strategic properties of this family of algorithms. Finally, we begin exploring the power of two-way greedy for set systems.

cs.GT↗

arXiv2019

Exact Recovery for a Family of Community-Detection Generative Models

Generative models for networks with communities have been studied extensively for being a fertile ground to establish information-theoretic and computational thresholds. In this paper we propose a new toy model for planted generative models called planted Random Energy Model (REM), inspired by Derrida's REM. For this model we provide the asymptotic behaviour of the probability of error for the maximum likelihood estimator and hence the exact recovery threshold. As an application, we further consider the 2 non-equally sized community Weighted Stochastic Block Model (2-WSBM) on $h$-uniform hypergraphs, that is equivalent to the P-REM on both sides of the spectrum, for high and low edge cardinality $h$. We provide upper and lower bounds for the exact recoverability for any $h$, mapping these problems to the aforementioned P-REM. To the best of our knowledge these are the first consistency results for the 2-WSBM on graphs and on hypergraphs with non-equally sized community.

cs.IT↗

arXiv2019

Independent Lazy Better-Response Dynamics on Network Games

We study an independent best-response dynamics on network games in which the nodes (players) decide to revise their strategies independently with some probability. We provide several bounds on the convergence time to an equilibrium as a function of this probability, the degree of the network, and the potential of the underlying games. These dynamics are somewhat more suitable for distributed environments than the classical better- and best-response dynamics where players revise their strategies "sequentially", i.e., no two players revise their strategies simultaneously.

cs.GT↗

arXiv2018

Online scheduling of jobs with favorite machines

This work introduces a natural variant of the online machine scheduling problem on unrelated machines, which we refer to as the favorite machine model. In this model, each job has a minimum processing time on a certain set of machines, called favorite machines, and some longer processing times on other machines. This type of costs (processing times) arise quite naturally in many practical problems. In the online version, jobs arrive one by one and must be allocated irrevocably upon each arrival without knowing the future jobs. We consider online algorithms for allocating jobs in order to minimize the makespan. We obtain tight bounds on the competitive ratio of the greedy algorithm and characterize the optimal competitive ratio for the favorite machine model. Our bounds generalize the previous results of the greedy algorithm and the optimal algorithm for the unrelated machines and the identical machines. We also study a further restriction of the model, called the symmetric favorite machine model, where the machines are partitioned equally into two groups and each job has one of the groups as favorite machines. We obtain a 2.675-competitive algorithm for this case, and the best possible algorithm for the two machines case.

cs.DS↗