On the Sybil-Proofness of Accounting Mechanisms

A common challenge in distributed work systems like P2P file-sharing communities, or ad-hoc routing networks, is to minimize the number of free-riders and incentivize contributions. Without any centralized monitoring it is difficult to distinguish contributors from free-riders. One way to address this problem is via accounting mechanisms which rely on voluntary reports by individual agents and compute a score for each agent in the network. In Seuken et al. [11], we have recently proposed a mechanism which removes any incentive for a user to manipulate the mechanism via misreports. However, we left the existence of sybil-proof accounting mechanisms as an open question. In this paper, we settle this question, and show the striking impossibility result that under reasonable assumptions no sybil-proof accounting mechanism exists. We show, that a significantly weaker form of K-sybil-proofness can be achieved against certain classes of sybil attacks. Finally, we explain how limited robustness to sybil manipulations can be achieved by using max-flow algorithms in accounting mechanism design.Engineering and Applied Science

Accounting Mechanisms for Distributed Work Systems

In distributed work systems, individual users perform work for other users. A significant challenge in these systems is to provide proper incentives for users to contribute as much work as they consume, even when monitoring is not possible. We formalize the problem of designing incentive-compatible accounting mechanisms that measure the net contributions of users, despite relying on voluntary reports. We introduce the Drop-Edge Mechanism that removes any incentive for a user to manipulate via misreports about work contributed or consumed. We prove that Drop-Edge provides a good approximation to a user’s net contribution, and is accurate in the limit as the number of users grows. We demonstrate very good welfare properties in simulation compared to an existing, manipulable mechanism. In closing, we discuss our ongoing work, including a real-world implementation and evaluation of the DropEdge Mechanism in a BitTorrent client.Engineering and Applied Science

Incentive-driven QoS in peer-to-peer overlays

A well known problem in peer-to-peer overlays is that no single entity has control over the software, hardware and configuration of peers. Thus, each peer can selfishly adapt its behaviour to maximise its benefit from the overlay. This thesis is concerned with the modelling and design of incentive mechanisms for QoS-overlays: resource allocation protocols that provide strategic peers with participation incentives, while at the same time optimising the performance of the peer-to-peer distribution overlay. The contributions of this thesis are as follows. First, we present PledgeRoute, a novel contribution accounting system that can be used, along with a set of reciprocity policies, as an incentive mechanism to encourage peers to contribute resources even when users are not actively consuming overlay services. This mechanism uses a decentralised credit network, is resilient to sybil attacks, and allows peers to achieve time and space deferred contribution reciprocity. Then, we present a novel, QoS-aware resource allocation model based on Vickrey auctions that uses PledgeRoute as a substrate. It acts as an incentive mechanism by providing efficient overlay construction, while at the same time allocating increasing service quality to those peers that contribute more to the network. The model is then applied to lagsensitive chunk swarming, and some of its properties are explored for different peer delay distributions. When considering QoS overlays deployed over the best-effort Internet, the quality received by a client cannot be adjudicated completely to either its serving peer or the intervening network between them. By drawing parallels between this situation and well-known hidden action situations in microeconomics, we propose a novel scheme to ensure adherence to advertised QoS levels. We then apply it to delay-sensitive chunk distribution overlays and present the optimal contract payments required, along with a method for QoS contract enforcement through reciprocative strategies. We also present a probabilistic model for application-layer delay as a function of the prevailing network conditions. Finally, we address the incentives of managed overlays, and the prediction of their behaviour. We propose two novel models of multihoming managed overlay incentives in which overlays can freely allocate their traffic flows between different ISPs. One is obtained by optimising an overlay utility function with desired properties, while the other is designed for data-driven least-squares fitting of the cross elasticity of demand. This last model is then used to solve for ISP profit maximisation

Cloudarmor: Supporting Reputation-Based Trust Management for Cloud Services

Cloud services have become predominant in the current technological era. For the rich set of features provided by cloud services, consumers want to access the services while protecting their privacy. In this kind of environment, protection of cloud services will become a significant problem. So, research has started for a system, which lets the users access cloud services without losing the privacy of their data. Trust management and identity model makes sense in this case. The identity model maintains the authentication and authorization of the components involved in the system and trust-based model provides us with a dynamic way of identifying issues and attacks with the system and take appropriate actions. Further, a trust management-based system provides us with a new set of challenges such as reputation-based attacks, availability of components, and misleading trust feedbacks. Collusion attacks and Sybil attacks form a significant part of these challenges. This paper aims to solve the above problems in a trust management-based model by introducing a credibility model on top of a new trust management model, which addresses these use-cases, and also provides reliability and availability

Security and efficiency of collateral in decentralized finance

Decentralized Finance (DeFi) promises to be a new contender for a radically new financial system. Its foundations are censorship-resistant, non-custodial, and transparent financial protocols. Securing these protocols is achieved by combining cryptographic primitives with economic incentives instead of relying on trusted intermediaries. In DeFi, financial collateral is the central incentive measure providing repercussions against "misbehaving” agents. However, requiring collateral introduces security and efficiency concerns. (i) Securing DeFi protocols using price-volatile and complex assets requires careful risk management. (ii) Efficiency of capital is diminished since locking assets is an opportunity cost and restricts access to DeFi to agents with sufficient funds. We tackle these issues by developing new protocols to optimize collateral requirements in existing DeFi protocols safely. Our contributions are threefold. First, we provide a risk-based classification of collateral applied in DeFi protocols. Specifically, the classification serves as the starting point to develop a model capturing the security property of financial collateral with unique risks in DeFi. Second, we present two protocols that can be integrated into existing DeFi protocols. Promise transforms suitable DeFi protocols into a subscription mechanism lowering the initial capital locking requirements thus tackling the capital efficiency of collateral. Balance is a protocol to reduce collateral in DeFi protocols safely. Balance is similar to a credit scoring system where “well-behaving” agents enjoy a lowered collateral. As such, Balance can be used both to tailor security of protocols by required per-agent collateral requirements instead of per-protocol requirements and, at the same time, increase capital efficiency of collateral. We demonstrate the practical applicability of Promise and Balance by decreasing collateral in the XCLAIM cross-chain communication protocol by up to 10% under conservative assumptions. Third, we discuss the practical security of financial collateral. We outline new types of attacks on DeFi protocols secured by collateral through trustless coordination of rational agents and so-called flash loans with the example of the popular Maker protocol. We conclude by noting the perils of constructing collateralized DeFi protocols and outlining strands of future work to increase their security and efficiency.Open Acces