FairLedger: A Fair Blockchain Protocol for Financial Institutions

Financial institutions are currently looking into technologies for permissioned blockchains. A major effort in this direction is Hyperledger, an open source project hosted by the Linux Foundation and backed by a consortium of over a hundred companies. A key component in permissioned blockchain protocols is a byzantine fault tolerant (BFT) consensus engine that orders transactions. However, currently available BFT solutions in Hyperledger (as well as in the literature at large) are inadequate for financial settings; they are not designed to ensure fairness or to tolerate selfish behavior that arises when financial institutions strive to maximize their own profit. We present FairLedger, a permissioned blockchain BFT protocol, which is fair, designed to deal with rational behavior, and, no less important, easy to understand and implement. The secret sauce of our protocol is a new communication abstraction, called detectable all-to-all (DA2A), which allows us to detect participants (byzantine or rational) that deviate from the protocol, and punish them. We implement FairLedger in the Hyperledger open source project, using Iroha framework, one of the biggest projects therein. To evaluate FairLegder's performance, we also implement it in the PBFT framework and compare the two protocols. Our results show that in failure-free scenarios FairLedger achieves better throughput than both Iroha's implementation and PBFT in wide-area settings

FairBlock: Preventing Blockchain Front-running with Minimal Overheads

While blockchain systems are quickly gaining popularity, front-running remains a major obstacle to fair exchange. In this paper, we show how to apply identity-based encryption (IBE) to prevent front-running with minimal bandwidth overheads. In our approach, to decrypt a block of N transactions, the number of messages sent across the network only grows linearly with the size of decrypting committees, S. That is, to decrypt a set of N transactions sequenced at a specific block, a committee only needs to exchange S decryption shares (independent of N ). In comparison, previous solutions are based on threshold decryption schemes, where each transaction in a block must be decrypted separately by the committee, resulting in bandwidth overhead of N × S. Along the way, we present a model for fair block processing and build a prototype implementation. We show that on a sample of 1000 messages with 1000 validators our system saves 42.53 MB of bandwidth which is 99.6% less compared with the standard threshold decryption paradigm

Mitigating MEV via Multiparty Delay Encryption

Ethereum is a decentralized and permissionless network offering several attractive features. However, block proposers in Ethereum can exploit the order of transactions to extract value. This phenomenon, known as maximal extractable value (MEV), not only disrupts the optimal functioning of different protocols but also undermines the stability of the underlying consensus mechanism. In this work, we present a new method to alleviate the MEV problem by separating transaction inclusion and execution, keeping transactions encrypted before execution. We formulate the notion of multiparty delay encryption (MDE) and construct a practical MDE scheme based on time-lock puzzles. Unlike other encryption-based methods, our method excels in scalability (in terms of transaction decryption), efficiency (minimizing communication and storage overhead), and security (with minimal trust assumptions). To demonstrate the effectiveness of our MDE scheme, we have implemented it on a local Ethereum testnet. We also prove that with the presence of just one honest attestation aggregator per slot, the MEV threat can be significantly mitigated in a practical way

FairBlock: Preventing Blockchain Front-running with Minimal Overheads

While blockchain systems are quickly gaining popularity, front-running remains a major obstacle to fair exchange. Front-running is a family of strategies in which a malicious party manipulates the order of transactions such that a transaction tx_2 which is broadcasted in time t_2 executes before the transaction of victim tx_1 which is broadcasted earlier in time t_1 (t_1 < t_2). In this thesis, we show how to apply Identity-Based Encryption (IBE) to prevent front-running with minimal bandwidth overheads. In our approach, to decrypt a block of N transactions, the number of messages sent across the network only grows linearly with the size of decrypting committees, S. That is, to decrypt a set of N transactions sequenced at a specific block, a committee only needs to exchange S decryption shares (independent of N). In comparison, previous solutions are based on threshold decryption schemes, where each transaction in a block must be decrypted separately by the committee, resulting in bandwidth overhead of N*S. Along the way, we present a model for fair block processing, explore technical challenges, and build prototype implementations. We show that on a sample of 1000 messages with 1000 validators our work saves 42.53 MB of bandwidth which is 99.6% less compared with the standard threshold decryption paradigm

Order-Fairness for Byzantine Consensus

Decades of research in both cryptography and distributed systems has extensively studied the problem of state machine replication, also known as Byzantine consensus. A consensus protocol must satisfy two properties: consistency and liveness. These properties ensure that honest participating nodes agree on the same log and dictate when fresh transactions get added. They fail, however, to ensure against adversarial manipulation of the actual ordering of transactions in the log. Indeed, in leader-based protocols (almost all protocols used today), malicious leaders can directly choose the final transaction ordering. To rectify this problem, we propose a third consensus property: transaction order-fairness. We initiate the first formal investigation of order-fairness and explain its fundamental importance. We provide several natural definitions for order-fairness and analyze the assumptions necessary to realize them. We also propose a new class of consensus protocols called Aequitas. Aequitas protocols are the first to achieve order-fairness in addition to consistency and liveness. They can be realized in a black-box way using existing broadcast and agreement primitives (or indeed using any consensus protocol), and work in both synchronous and asynchronous network models

Auditable and performant Byzantine consensus for permissioned ledgers

Permissioned ledgers allow users to execute transactions against a data store, and retain proof of their execution in a replicated ledger. Each replica verifies the transactions’ execution and ensures that, in perpetuity, a committed transaction cannot be removed from the ledger. Unfortunately, this is not guaranteed by today’s permissioned ledgers, which can be re-written if an arbitrary number of replicas collude. In addition, the transaction throughput of permissioned ledgers is low, hampering real-world deployments, by not taking advantage of multi-core CPUs and hardware accelerators. This thesis explores how permissioned ledgers and their consensus protocols can be made auditable in perpetuity; even when all replicas collude and re-write the ledger. It also addresses how Byzantine consensus protocols can be changed to increase the execution throughput of complex transactions. This thesis makes the following contributions: 1. Always auditable Byzantine consensus protocols. We present a permissioned ledger system that can assign blame to individual replicas regardless of how many of them misbehave. This is achieved by signing and storing consensus protocol messages in the ledger and providing clients with signed, universally-verifiable receipts. 2. Performant transaction execution with hardware accelerators. Next, we describe a cloud-based ML inference service that provides strong integrity guarantees, while staying compatible with current inference APIs. We change the Byzantine consensus protocol to execute machine learning (ML) inference computation on GPUs to optimize throughput and latency of ML inference computation. 3. Parallel transactions execution on multi-core CPUs. Finally, we introduce a permissioned ledger that executes transactions, in parallel, on multi-core CPUs. We separate the execution of transactions between the primary and secondary replicas. The primary replica executes transactions on multiple CPU cores and creates a dependency graph of the transactions that the backup replicas utilize to execute transactions in parallel.Open Acces

Ordering Transactions with Bounded Unfairness: Definitions, Complexity and Constructions

An important consideration in the context of distributed ledger protocols is fairness in terms of transaction ordering. Recent work [Crypto 2020] revealed a deep connection of (receiver) order fairness to social choice theory and related impossibility results arising from the Condorcet paradox. As a result of the impossibility, various relaxations of order fairness were investigated in prior works. Given that distributed ledger protocols, especially those processing smart contracts, must serialize the input transactions, a natural objective is to minimize the distance (in terms of injected number of transactions) between any pair of unfairly ordered transactions in the output ledger — a concept we call bounded unfairness. In state machine replication (SMR) parlance this asks for minimizing the number of unfair state updates occurring before the processing of any transaction. This unfairness minimization objective gives rise to a natural class of parametric order fairness definitions that has not been studied before. As we observe, previous realizable relaxations of order fairness do not yield good unfairness bounds. Achieving optimal order fairness in the sense of bounded unfairness turns out to be connected to the graph theoretic properties of the underlying transaction dependency graph and specifically the bandwidth metric of strongly connected components in this graph. This gives rise to a specific instance of the definition that we call ``directed bandwidth order-fairness\u27\u27 which we show that it captures the best possible that any protocol can achieve in terms of bounding unfairness. We prove ordering transactions in this fashion is NP-hard and non-approximable for any constant ratio. Towards realizing the property, we put forth a new distributed ledger protocol called Taxis that achieves directed bandwidth order-fairness in the permissionless setting. We present two variants of our protocol, one that matches the property perfectly but (necessarily) lacks in performance and liveness, and a second variant that achieves liveness and better complexity while offering a slightly relaxed version of the directed bandwidth definition. Finally, we comment on applications of our work to social choice theory, a direction which we believe to be of independent interest