arXiv subjects

Pranav Garimidi

Publications and source records attributed to Pranav Garimidi.

10 recordsLinked to original sources

arXiv2026

Beyond Winner-Take-All Procurement Auctions

Blockchain protocols often seek to procure computationally challenging work from a decentralized set of participants. While there are simple procurement auctions that result in the minimal cost of acquisition and maximal efficiency, they also lead to concentration in the provider set due to the winner-take-all market structure. We design and analyze single-good procurement auctions that balance social-cost minimization (at the extreme, a winner-take-all auction) with decentralization (at the extreme, a uniform allocation). We first give a dominant-strategy incentive-compatible (DSIC) mechanism explicitly designed to implement non-winner-take-all allocations. Our allocation rule uniquely solves an optimization with respect to a modified social-cost metric that penalizes large, single-player concentrations and is parameterized with a curvature value, $\alpha$, with $\alpha \rightarrow 0$ implementing the uniform allocation and $\alpha \rightarrow \infty$ implementing the winner-take-all allocation. We further quantify the loss in social cost of this mechanism as a function of $\alpha$. We then propose two alternative mechanisms, each addressing a limitation of the DSIC mechanism, namely a lack of Sybil-resistance and a complex payment rule. First, we examine a variation of Tullock contests to achieve a non-winner-take-all Sybil-proof procurement mechanism. Second, we consider a mechanism with the same allocation rule as the DSIC mechanism but with an alternative payment rule in which producers are simply paid proportionally to their bids. This provides a much simpler payment rule which, while not DSIC, still results in the mechanism being ex-post ``safe'' (where there exists a bidding strategy that is guaranteed to result in non-negative utility) for participating bidders. For both non-DSIC mechanisms, we characterize the equilibrium allocations and prove price of anarchy bounds.

cs.GT↗

arXiv2025

Multiple Concurrent Proposers: Why and How

Traditional single-proposer blockchains suffer from miner extractable value (MEV), where validators exploit their serial monopoly on transaction inclusion and ordering to extract rents from users. While there have been many developments at the application layer to reduce the impact of MEV, these approaches largely require auctions as a subcomponent. Running auctions efficiently on chain requires two key properties of the underlying consensus protocol: selective-censorship resistance and hiding. These properties guarantee that an adversary can neither selectively delay transactions nor see their contents before they are confirmed. We propose a multiple concurrent proposer (MCP) protocol offering exactly these properties.

cs.CR↗

arXiv2025

Transaction Fee Mechanism Design for Leaderless Blockchain Protocols

We initiate the study of transaction fee mechanism design for blockchain protocols in which multiple block producers contribute to the production of each block. Our contributions include: - We propose an extensive-form (multi-stage) game model to reason about the game theory of multi-proposer transaction fee mechanisms. - We define the strongly BPIC property to capture the idea that all block producers should be motivated to behave as intended: for every user bid profile, following the intended allocation rule is a Nash equilibrium for block producers that Pareto dominates all other Nash equilibria. - We propose the first-price auction with equal sharing (FPA-EQ) mechanism as an attractive solution to the multi-proposer transaction fee mechanism design problem. We prove that the mechanism is strongly BPIC and guarantees at least a 63.2% fraction of the maximum-possible expected welfare at equilibrium. - We prove that the compromises made by the FPA-EQ mechanism are qualitatively necessary: no strongly BPIC mechanism with non-trivial welfare guarantees can be DSIC, and no strongly BPIC mechanism can guarantee optimal welfare at equilibrium.

cs.GT↗

arXiv2024

Centralization in Block Building and Proposer-Builder Separation

The goal of this paper is to rigorously interrogate conventional wisdom about centralization in block-building (due to, e.g., MEV and private order flow) and the outsourcing of block-building by validators to specialists (i.e., proposer-builder separation): 1. Does heterogeneity in skills and knowledge across block producers inevitably lead to centralization? 2. Does proposer-builder separation eliminate heterogeneity and preserve decentralization among proposers? This paper develops mathematical models and results that offer answers to these questions: 1. In a game-theoretic model with endogenous staking, heterogeneous block producer rewards, and staking costs, we quantify the extent to which heterogeneous rewards lead to concentration in the equilibrium staking distribution. 2. In a stochastic model in which heterogeneous block producers repeatedly reinvest rewards into staking, we quantify, as a function of the block producer heterogeneity, the rate at which stake concentrates on the most sophisticated block producers. 3. In a model with heterogeneous proposers and specialized builders, we quantify, as a function of the competitiveness of the builder ecosystem, the extent to which proposer-builder separation reduces the heterogeneity in rewards across different proposers. Our models and results take advantage of connections to contest design, P\'olya urn processes, and auction theory.

cs.GT↗

arXiv2023

Transaction Fee Mechanism Design with Active Block Producers

The incentive-compatibility properties of blockchain transaction fee mechanisms have been investigated with *passive* block producers that are motivated purely by the net rewards earned at the consensus layer. This paper introduces a model of *active* block producers that have their own private valuations for blocks (representing, for example, additional value derived from the application layer). The block producer surplus in our model can be interpreted as one of the more common colloquial meanings of the term ``MEV.'' The main results of this paper show that transaction fee mechanism design is fundamentally more difficult with active block producers than with passive ones: with active block producers, no non-trivial or approximately welfare-maximizing transaction fee mechanism can be incentive-compatible for both users and block producers. These results can be interpreted as a mathematical justification for the current interest in augmenting transaction fee mechanisms with additional components such as order flow auctions, block producer competition, trusted hardware, or cryptographic techniques.

cs.GT↗

arXiv2023

When Bidders Are DAOs

In a typical decentralized autonomous organization (DAO), people organize themselves into a group that is programmatically managed. DAOs can act as bidders in auctions, with a DAO's bid treated by the auctioneer as if it had been submitted by an individual, without regard to the internal structure of the DAO. We study auctions in which the bidders are DAOs. More precisely, we consider the design of two-level auctions in which the "participants" are groups of bidders rather than individuals. Bidders form DAOs to pool resources, but must then also negotiate the terms by which the DAO's winnings are shared. We model the outcome of a DAO's negotiations by an aggregation function (which aggregates DAO members' bids into a single group bid), and a budget-balanced cost-sharing mechanism (that determines DAO members' access to the DAO's allocation and distributes the total payment demanded from the DAO to its members). We pursue two-level mechanisms that are incentive-compatible (with truthful bidding a dominant strategy for members of each DAO) and approximately welfare-optimal. We prove that, even in the case of a single-item auction, incentive-compatible welfare maximization is not possible: No matter what the outer mechanism and the cost-sharing mechanisms used by DAOs, the welfare of the resulting two-level mechanism can be a $\approx \ln n$ factor less than optimal. We complement this lower bound with a natural two-level mechanism that achieves a matching approximate welfare guarantee. Our upper bound also extends to multi-item auctions where individuals have additive valuations. Finally, we show that our positive results cannot be extended much further: Even in multi-item settings with unit-demand bidders, truthful two-level mechanisms form a highly restricted class and as a consequence cannot guarantee any non-trivial approximation of the maximum social welfare.

cs.GT↗

arXiv2022

A Framework for Single-Item NFT Auction Mechanism Design

Lately, Non-Fungible Tokens (NFTs), i.e., uniquely discernible assets on a blockchain, have skyrocketed in popularity by addressing a broad audience. However, the typical NFT auctioning procedures are conducted in various, ad hoc ways, while mostly ignoring the context that the blockchain provides. One of the main targets of this work is to shed light on the vastly unexplored design space of NFT Auction Mechanisms, especially in those characteristics that fundamentally differ from traditional and more contemporaneous forms of auctions. We focus on the case that bidders have a valuation for the auctioned NFT, i.e., what we term the single-item NFT auction case. In this setting, we formally define an NFT Auction Mechanism, give the properties that we would ideally like a perfect mechanism to satisfy (broadly known as incentive compatibility and collusion resistance) and prove that it is impossible to have such a perfect mechanism. Even though we cannot have an all-powerful protocol like that, we move on to consider relaxed notions of those properties that we may desire the protocol to satisfy, as a trade-off between implementability and economic guarantees. Specifically, we define the notion of an equilibrium-truthful auction, where neither the seller nor the bidders can improve their utility by acting non-truthfully, so long as the counter-party acts truthfully. We also define asymptotically second-price auctions, in which the seller does not lose asymptotically any revenue in comparison to the theoretically-optimal (static) second-price sealed-bid auction, in the case that the bidders' valuations are drawn independently from some distribution. We showcase why these two are very desirable properties for an auction mechanism to enjoy, and construct the first known NFT Auction Mechanism which provably possesses such formal guarantees.

cs.GT↗

arXiv2021

Deterministic Budget-Feasible Clock Auctions

We revisit the well-studied problem of budget-feasible procurement, where a buyer with a strict budget constraint seeks to acquire services from a group of strategic providers (the sellers). During the last decade, several strategyproof budget-feasible procurement auctions have been proposed, aiming to maximize the value of the buyer, while eliciting each seller's true cost for providing their service. These solutions predominantly take the form of randomized sealed-bid auctions: they ask the sellers to report their private costs and then use randomization to determine which subset of services will be procured and how much each of the chosen providers will be paid, ensuring that the total payment does not exceed budget. Our main result in this paper is a novel method for designing budget-feasible auctions, leading to solutions that outperform the previously proposed auctions in multiple ways. First, our solutions take the form of descending clock auctions, and thus satisfy a list of properties, such as obvious strategyproofness, group strategyproofness, transparency, and unconditional winner privacy; this makes these auctions much more likely to be used in practice. Second, in contrast to previous results that heavily depend on randomization, our auctions are deterministic. As a result, we provide an affirmative answer to one of the main open questions in this literature, asking whether a deterministic strategyproof auction can achieve a constant approximation when the buyer's valuation function is submodular over the set of services. In addition, we also provide the first deterministic budget-feasible auction that matches the approximation bound of the best-known randomized auction for the class of subadditive valuations. Finally, using our method, we improve the best-known approximation factor for monotone submodular valuations, which has been the focus of most of the prior work.

cs.GT↗

arXiv2021

PROPm Allocations of Indivisible Goods to Multiple Agents

We study the classic problem of fairly allocating a set of indivisible goods among a group of agents, and focus on the notion of approximate proportionality known as PROPm. Prior work showed that there exists an allocation that satisfies this notion of fairness for instances involving up to five agents, but fell short of proving that this is true in general. We extend this result to show that a PROPm allocation is guaranteed to exist for all instances, independent of the number of agents or goods. Our proof is constructive, providing an algorithm that computes such an allocation and, unlike prior work, the running time of this algorithm is polynomial in both the number of agents and the number of goods.

cs.GT↗

arXiv2021

Achieving Proportionality up to the Maximin Item with Indivisible Goods

We study the problem of fairly allocating indivisible goods and focus on the classic fairness notion of proportionality. The indivisibility of the goods is long known to pose highly non-trivial obstacles to achieving fairness, and a very vibrant line of research has aimed to circumvent them using appropriate notions of approximate fairness. Recent work has established that even approximate versions of proportionality (PROPx) may be impossible to achieve even for small instances, while the best known achievable approximations (PROP1) are much weaker. We introduce the notion of proportionality up to the maximin item (PROPm) and show how to reach an allocation satisfying this notion for any instance involving up to five agents with additive valuations. PROPm provides a well-motivated middle-ground between PROP1 and PROPx, while also capturing some elements of the well-studied maximin share (MMS) benchmark: another relaxation of proportionality that has attracted a lot of attention.

cs.GT↗