arXiv subjects

Zeta Avarikioti

Publications and source records attributed to Zeta Avarikioti.

15 recordsLinked to original sources

arXiv2026

Slow and Steady: Preventing MEV with Verifiable Delays

Our work presents a defense mechanism against Maximal Extractable Value (MEV) opportunities in distributed ledgers. The mechanism relies on the idea of enforcing a verifiable delay when generating transactions, such that a block creator cannot react to the appearance of a MEV opportunity without breaking liveness. We present positive results both in the Byzantine setting and in a game theoretic model of rational participants. We additionally present negative bounds that outline the limitations of this line of defense. Finally, we explore real-world implementation details of verifiable delays and show that, based on historical MEV data, our mechanism could realistically help prevent most existing MEV threats.

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arXiv2026

Ark: Offchain Transaction Batching in Bitcoin

Bitcoin is the cryptocurrency with the largest market capitalisation, but its widespread adoption is fundamentally limited by the scalability constraints of its consensus algorithm, which requires every transaction to be confirmed onchain. To address this, several Layer-2 scalability solutions have been proposed to move payments offchain -- most notably, the Lightning Network. However, their deployment remains hindered by cumbersome setup requirements: users must lock funds onchain to participate and engage in complex auxiliary protocols (e.g., for channel rebalancing, top-ups, and routing). Other solutions, like payment pools, sidechains and rollups, cannot be implemented in a non-custodial way on Bitcoin due to its limited scripting capabilities, or require all protocol participants to update the offchain state. In this work, we present Ark, the first Bitcoin-compatible commit-chain. Ark enables offchain transactions of virtual UTXOs (VTXOs), through an untrusted operator who aggregates them into succinct onchain commitments. A distinctive feature of Ark is its ease of deployment: users can receive offchain payments without locking any funds beforehand and Ark state updates can be performed only requiring the users involved in that update. We formally define the Ark protocol and prove its security. During this process, we identified two attacks affecting the testnet implementation, which we responsibly disclosed and proposed fixes for, which have been now integrated into the mainnet implementation. Our experimental evaluation demonstrates that Ark can commit onchain to batches of arbitrarily many VTXOs with a constant-sized footprint of approximately 200 vB. Cooperative exits add one output per user, while unilateral exits require $\mathcal{O}(\log n)$ transactions of roughly 150 vB per VTXO for a batch of $n$ VTXOs.

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arXiv2026

Wonderboom -- Efficient, and Censorship-Resilient Signature Aggregation for Million Scale Consensus

Over the last years, Ethereum has evolved into a public platform that safeguards the savings of hundreds of millions of people and secures more than $650 billion in assets, placing it among the top 25 stock exchanges worldwide in market capitalization, ahead of Singapore, Mexico, and Thailand. As such, the performance and security of the Ethereum blockchain are not only of theoretical interest, but also carry significant global economic implications. At the time of writing, the Ethereum platform is collectively secured by almost one million validators highlighting its decentralized nature and underlining its economic security guarantees. However, due to this large validator set, the protocol takes around 15 minutes to finalize a block which is prohibitively slow for many real world applications. This delay is largely driven by the cost of aggregating and disseminating signatures across a validator set of this scale. Furthermore, as we show in this paper, the existing protocol that is used to aggregate and disseminate the signatures has several shortcomings that can be exploited by adversaries to shift stake proportion from honest to adversarial nodes. In this paper, we introduce Wonderboom, the first million scale aggregation protocol that can efficiently aggregate the signatures of millions of validators in a single Ethereum slot (x32 faster) while offering higher security guarantees than the state of the art protocol used in Ethereum. Furthermore, to evaluate Wonderboom, we implement the first simulation tool that can simulate such a protocol on the million scale and show that even in the worst case Wonderboom can aggregate and verify more than 2 million signatures within a single Ethereum slot.

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arXiv2025

Thunderdome: Timelock-Free Rationally-Secure Virtual Channels

Payment channel networks (PCNs) offer a promising solution to address the limited transaction throughput of deployed blockchains. However, several attacks have recently been proposed that stress the vulnerability of PCNs to timelock and censoring attacks. To address such attacks, we introduce Thunderdome, the first timelock-free PCN. Instead, Thunderdome leverages the design rationale of virtual channels to extend a timelock-free payment channel primitive, thereby enabling multi-hop transactions without timelocks. Previous works either utilize timelocks or do not accommodate transactions between parties that do not share a channel. At its core, Thunderdome relies on a committee of non-trusted watchtowers, known as wardens, who ensure that no honest party loses funds, even when offline, during the channel closure process. We introduce tailored incentive mechanisms to ensure that all participants follow the protocol's correct execution. Besides a traditional security proof that assumes an honest majority of the committee, we conduct a formal game-theoretic analysis to demonstrate the security of Thunderdome when all participants, including wardens, act rationally. We implement a proof of concept of Thunderdome on Ethereum to validate its feasibility and evaluate its costs. Our evaluation shows that deploying Thunderdome, including opening the underlying payment channel, costs approximately \$15 (0.0089 ETH), while the worst-case cost for closing a channel is about \$7 (0.004 ETH).

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arXiv2025

Calyx: Privacy-Preserving Multi-Token Optimistic-Rollup Protocol

Rollup protocols have recently received significant attention as a promising class of Layer 2 (L2) scalability solutions. By utilizing the Layer 1 (L1) blockchain solely as a bulletin board for a summary of the executed transactions and state changes, rollups enable secure off-chain execution while avoiding the complexity of other L2 mechanisms. However, to ensure data availability, current rollup protocols require the plaintext of executed transactions to be published on-chain, resulting in inherent privacy limitations. In this paper, we address this problem by introducing Calyx, the first privacy-preserving multi-token optimistic-Rollup protocol. Calyx guarantees full payment privacy for all L2 transactions, revealing no information about the sender, recipient, transferred amount, or token type. The protocol further supports atomic execution of multiple multi-token transactions and introduces a transaction fee scheme to enable broader application scenarios while ensuring the sustainable operation of the protocol. To enforce correctness, Calyx adopts an efficient one-step fraud-proof mechanism. We analyze the security and privacy guarantees of the protocol and provide an implementation and evaluation. Our results show that executing a single transaction costs approximately $0.06 (0.00002 ETH) and incurs only constant-size on-chain cost in asymptotic terms.

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arXiv2025

A Composable Game-Theoretic Framework for Blockchains

Blockchains rely on economic incentives to ensure secure and decentralised operation, making incentive compatibility a core design concern. However, protocols are rarely deployed in isolation. Applications interact with the underlying consensus and network layers, and multiple protocols may run concurrently on the same chain. These interactions give rise to complex incentive dynamics that traditional, isolated analyses often fail to capture. We propose the first compositional game-theoretic framework for blockchain protocols. Our model represents blockchain protocols as interacting games across the application, network, and consensus layers. It enables formal reasoning about incentive compatibility under composition by introducing two key abstractions: the cross-layer game, which models how strategies in one layer influence others, and cross-application composition, which captures how application protocols interact concurrently through shared infrastructure. We illustrate our framework through case studies on Hashed Timelock Contracts (HTLCs), Layer-2 protocols, and Maximal Extractable Value (MEV) showing how compositional analysis reveals new subtle incentive vulnerabilities and supports modular security proofs. Also, by introduction of a novel rational miner model, we derive new conditions for the robustness of timelocks to bribing attacks.

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arXiv2025

A Security Framework for General Blockchain Layer 2 Protocols

Layer 2 (L2) protocols, payment channels, sidechains, and rollups, are central to blockchain scalability, enabling off-chain execution while preserving on-chain security. Despite growing deployment, existing security models remain protocol-specific and monolithic, hindering compositional reasoning and principled comparison of assumptions and requirements. We present a general security framework for L2 protocols in the IITM-style Universal Composability (iUC) model. At its core is a modular ideal functionality F_layer2 that abstracts mechanism-specific details while capturing the essential structure of L2 systems through composable subroutines for joining, submission, updating, reading, and settlement under adversarial conditions. This yields uniform definitions of safety, liveness, and data availability across a broad class of L2 protocols. We demonstrate generality by instantiating the framework for three representative constructions: the Brick payment channel, the Liquid sidechain, and the Arbitrum Nitro rollup. Each case study yields a protocol-specific ideal functionality derived from F_layer2 and tailored to its assumptions. Our analysis (i) establishes security via simulation-based proofs, (ii) exposes inherent trade-offs among safety, liveness, and data availability, and (iii) derives lower bounds characterizing fundamental limitations of each design class. Finally, we illustrate the framework as a design tool by presenting FRoll, the first optimistic rollup protocol with fast-finality guarantees, together with a security analysis in our model, showing how the framework supports requirement-driven design of L2 protocols.

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arXiv2025

CoBRA: A Universal Strategyproof Confirmation Protocol for Quorum-based Proof-of-Stake Blockchains

The security of many Proof-of-Stake (PoS) payment systems relies on quorum-based State Machine Replication (SMR) protocols. While classical analyses assume purely Byzantine faults, real-world systems must tolerate both arbitrary failures and strategic, profit-driven validators. We therefore study quorum-based SMR under a hybrid model with honest, Byzantine, and rational participants. We first establish the fundamental limitations of traditional consensus mechanisms, proving two impossibility results: (1) in partially synchronous networks, no quorum-based protocol can achieve SMR when rational and Byzantine validators collectively exceed $1/3$ of the participants; and (2) even under synchronous network assumptions, SMR remains unattainable if this coalition comprises more than $2/3$ of the validator set. Assuming a synchrony bound $\Delta$, we show how to extend any quorum-based SMR protocol to tolerate up to $1/3$ Byzantine and $1/3$ rational validators by modifying only its finalization rule. Our approach enforces a necessary bound on the total transaction volume finalized within any time window $\Delta$ and introduces the \emph{strongest chain rule}, which enables efficient finalization of transactions when a supermajority of honest participants provably supports execution. Empirical analysis of Ethereum and Cosmos demonstrates validator participation exceeding the required $5/6$ threshold in over $99%$ of blocks, supporting the practicality of our design. Finally, we present a recovery mechanism that restores safety and liveness after consistency violations, even with up to $5/9$ Byzantine stake and $1/9$ rational stake, guaranteeing full reimbursement of provable client losses.

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arXiv2025

Optimal Reward Allocation via Proportional Splitting

Following the publication of Bitcoin's arguably most famous attack, selfish mining, various works have introduced mechanisms to enhance blockchain systems' game-theoretic resilience. The only proof-of-work reward rule with a Nash-equilibrium guarantee, FruitChains, demands reward finality on the order of days. The rules that settle in minutes have no such guarantee, and one of them, Reward Splitting, still outperforms FruitChains on most of the metrics that matter in deployment. This paper closes that gap between theory and practice. We introduce FairChain, a two-level transformation for any proof-of-work Nakamoto-style protocol. At the protocol layer, FairChain records low-difficulty samples called workshares alongside blocks. At the reward layer, it applies Proportional Reward Splitting (PRS): each height's reward is divided among the competing work objects in proportion to the intrinsic work behind them, with workshares supplying a fresh power estimate at every height. The fork-choice rule and block-production loop are left untouched, so the host chain's security carries over unchanged. Workshares can be discarded once the corresponding rewards mature, leaving zero on-chain footprint. We prove FairChain is a \r{ho}-coalition-safe {\epsilon}-Nash equilibrium for sufficiently large parameters, matching FruitChains in theory. To evaluate practical performance, we leverage Markov decision processes and compute the optimal adversarial policy under each utility function, rather than the gain of any one attack. At a six-block confirmation window, FairChain raises the deviation threshold to 38% of mining power and beats every mechanism in that framework on incentive compatibility, subversion gain (except FruitChains above 42%), and censorship susceptibility (except FruitChains below 25%).

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arXiv2024

Bribe & Fork: Cheap Bribing Attacks via Forking Threat

In this work, we reexamine the vulnerability of Payment Channel Networks (PCNs) to bribing attacks, where an adversary incentivizes blockchain miners to deliberately ignore a specific transaction to undermine the punishment mechanism of PCNs. While previous studies have posited a prohibitive cost for such attacks, we show that this cost may be dramatically reduced (to approximately \$125), thereby increasing the likelihood of these attacks. To this end, we introduce Bribe & Fork, a modified bribing attack that leverages the threat of a so-called feather fork which we analyze with a novel formal model for the mining game with forking. We empirically analyze historical data of some real-world blockchain implementations to evaluate the scale of this cost reduction. Our findings shed more light on the potential vulnerability of PCNs and highlight the need for robust solutions.

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arXiv2023

Lightning Creation Games

Payment channel networks (PCNs) are a promising solution to the scalability problem of cryptocurrencies. Any two users connected by a payment channel in the network can theoretically send an unbounded number of instant, costless transactions between them. Users who are not directly connected can also transact with each other in a multi-hop fashion. In this work, we study the incentive structure behind the creation of payment channel networks, particularly from the point of view of a single user that wants to join the network. We define a utility function for a new user in terms of expected revenue, expected fees, and the cost of creating channels, and then provide constant factor approximation algorithms that optimise the utility function given a certain budget. Additionally, we take a step back from a single user to the whole network and examine the parameter spaces under which simple graph topologies form a Nash equilibrium.

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arXiv2022

Wiser: Increasing Throughput in Payment Channel Networks with Transaction Aggregation

Payment channel networks (PCNs) are one of the most prominent solutions to the limited transaction throughput of blockchains. Nevertheless, PCNs suffer themselves from a throughput limitation due to the capital constraints of their channels. A similar dependence on high capital is also found in inter-bank payment settlements, where the so-called netting technique is used to mitigate liquidity demands. In this work, we alleviate this limitation by introducing the notion of transaction aggregation: instead of executing transactions sequentially through a PCN, we enable senders to aggregate multiple transactions and execute them simultaneously to benefit from several amounts that may "cancel out". Two direct advantages of our proposal is the decrease in intermediary fees paid by senders as well as the obfuscation of the transaction data from the intermediaries. We formulate the transaction aggregation as a computational problem, a generalization of the Bank Clearing Problem. We present a generic framework for the transaction aggregation execution, and thereafter we propose Wiser as an implementation of this framework in a specific hub-based setting. To overcome the NP-hardness of the transaction aggregation problem, in Wiser we propose a fixed-parameter linear algorithm for a special case of transaction aggregation as well as the Bank Clearing Problem. Wiser can also be seen as a modern variant of the Hawala money transfer system, as well as a decentralized implementation of the overseas remittance service of Wise.

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arXiv2021

HIDE & SEEK: Privacy-Preserving Rebalancing on Payment Channel Networks

Payment channels effectively move the transaction load off-chain thereby successfully addressing the inherent scalability problem most cryptocurrencies face. A major drawback of payment channels is the need to ``top up'' funds on-chain when a channel is depleted. Rebalancing was proposed to alleviate this issue, where parties with depleting channels move their funds along a cycle to replenish their channels off-chain. Protocols for rebalancing so far either introduce local solutions or compromise privacy. In this work, we present an opt-in rebalancing protocol that is both private and globally optimal, meaning our protocol maximizes the total amount of rebalanced funds. We study rebalancing from the framework of linear programming. To obtain full privacy guarantees, we leverage multi-party computation in solving the linear program, which is executed by selected participants to maintain efficiency. Finally, we efficiently decompose the rebalancing solution into incentive-compatible cycles which conserve user balances when executed atomically. Keywords: Payment Channel Networks, Privacy and Rebalancing.

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arXiv2021

FnF-BFT: Exploring Performance Limits of BFT Protocols

We introduce FnF-BFT, a parallel-leader byzantine fault-tolerant state-machine replication protocol for the partially synchronous model with theoretical performance bounds during synchrony. By allowing all replicas to act as leaders and propose requests independently, FnF-BFT parallelizes the execution of requests. Leader parallelization distributes the load over the entire network -- increasing throughput by overcoming the single-leader bottleneck. We further use historical data to ensure that well-performing replicas are in command. FnF-BFT's communication complexity is linear in the number of replicas during synchrony and thus competitive with state-of-the-art protocols. Finally, with FnF-BFT, we introduce a BFT protocol with performance guarantees in stable network conditions under truly byzantine attacks. A prototype implementation of \prot outperforms (state-of-the-art) HotStuff's throughput, especially as replicas increase, showcasing \prot's significantly improved scaling capabilities.

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arXiv2019

Ride the Lightning: The Game Theory of Payment Channels

Payment channels were introduced to solve various eminent cryptocurrency scalability issues. Multiple payment channels build a network on top of a blockchain, the so-called layer 2. In this work, we analyze payment networks through the lens of network creation games. We identify betweenness and closeness centrality as central concepts regarding payment networks. We study the topologies that emerge when players act selfishly and determine the parameter space in which they constitute a Nash equilibrium. Moreover, we determine the social optima depending on the correlation of betweenness and closeness centrality. When possible, we bound the price of anarchy. We also briefly discuss the price of stability.

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