Reducing Latency of DAG-based Consensus in the Asynchronous Setting via the UTXO Model

DAG-based consensus has attracted significant interest due to its high throughput in asynchronous network settings. However, existing protocols such as DAG-rider (Keidar et al., PODC 2021) and ``Narwhal and Tusk'' (Danezis et al., Eurosys 2022) face two undesired practical issues: (1) high transaction latency and (2) high cost to verify transaction outcomes. To address (1), this work introduces a novel commit rule based on the Unspent Transaction Output (UTXO) Data Model, which allows a node to predict the transaction results before triggering the commitment. We propose a new consensus algorithm named ``Board and Clerk'', which reduces the transaction latency by half for roughly 50% of transactions. As the tolerance for faults escalates, more transactions can partake in this latency reduction. In addition, we also propose the Hyper-Block Model with two flexible proposing strategies to tackle (2): blocking and non-blocking. Using our proposed strategies, each node first predicts the transaction results if its proposal is committed and packs this result as a commitment in its proposal. The hyper-block packs the signature of the proposal and the outputs of the consensus layer together in order to prove the transaction results

Maravedí: A Secure and Practical Protocol to Trade Risk for Instantaneous Finality

The efficiency of blockchain systems is often compared to popular credit card networks with respect to the transactions per second rate. This seems to be an unfair comparison since these networks do not complete a transaction from beginning to end. Rather they buy the risk and settle it much later. Typically transactions have only two players, the payer and the payee, and the settlement of this transaction requires time since it depends on basic properties of the consensus protocol. In practice, the payee, very often, needs to wait for confirmation in order to ship the traded goods. Alternatively, the payee, or merchant, can ship it in faith that the transaction will be confirmed. Our contribution, the Maravedí Protocol, introduces a third player to minimize the risk of the payee to be left without the payment even without the consensus layer confirmation. The main idea is that the third player can work similarly to a credit card company. That is, it buys the risk from the merchant, by a small discount, and allows the third player to pay it instantaneously via a payment-channel like protocol. In parallel, the third player receives the regular payment transaction from the payer that can be settled on the chain, thus, after waiting the consensus/blockchain required time. Moreover, the on-chain transaction pays the full amount, allowing the third player to cash in the discount. Hence, on the side of the merchant, our protocol puts forth instantaneous finality in a novel way to the best of our knowledge

State Machines across Isomorphic Layer 2 Ledgers

With the ever greater adaptation of blockchain systems, smart contract based ecosystems have formed to provide financial services and other utility. This results in an ever increasing demand for transactions on blockchains, however, the amount of transactions per second on a given ledger is limited. Layer-2 systems attempt to improve scalability by taking transactions off-chain, with building blocks that are two party channels which are concatenated to form networks. Interaction between two parties requires (1) routing such a network, (2) interaction with and collateral from all intermediaries on the routed path and (3) interactions are often more limited compared to what can be done on the ledger. In contrast to that design, recent constructions such as Hydra Heads (FC’21) are both multi-party and isomorphic, allowing interactions to have the same expressiveness as on the ledger making it akin to a ledger located on Layer-2. The follow up Interhead Construction (MARBLE’22) further extends the protocol to connect Hydra Heads into networks by means of a “virtual” Hydra Head construction. This work puts forth an even greater generalization of the Interhead Protocol, allowing for inter- action across different Layer-2 ledgers with a multitude of improvements. As concrete example, our design is modular and lightweight, which makes it viable for both full virtual ledger constructions as well as straightfor- ward one-time interactions and payments systems

Interhead Hydra Two Heads are Better than One

Distributed ledger are maintained through consensus protocols executed by mutually distrustful parties. However, these consensus protocols have inherent limitations thus resulting in scalability issues of the ledger. Layer-2 protocols operate on channels and allow parties to interact with another without going through the consensus protocol albeit relying on its security as fall-back. Prominent Layer-2 protocols are payment channels for Bitcoin that allow two parties to exchange coins, State Channels for Ethereum that allow two parties to execute a state machine, and Hydra heads [FC\u2721] for Cardano which allows multiple parties execution of Constraint Emitting Machines (CEM). Channels can be concatenated into networks using techniques such as Hashed Timelocked Contracts to execute payments or virtual state channels as introduced by Dziembowski et al. [CCS\u2718] to execute state machines. These constructions allow interaction between two parties across a channel network, i.e. the two endpoints of a path of channels. This is realized by utilizing intermediaries, which are the parties on the channel path which are in-between both endpoints, who have to pay collateral to ensure security of the constructions. While these approaches can be used with Hydra, they cannot be trivially extended to allow execution of CEMs between an arbitrary amount of parties across different Hydra heads. This work addresses this gap by introducing the Interhead construction that allows for the iterative creation of virtual Hydra heads. Of independent interest, our construction is the first that (1) supports channels with an arbitrary amount of parties and (2) allows for collateral to be paid by multiple intermediaries which allows to share this burden and thus improves practicality

SoK: A Taxonomy for Layer-2 Scalability Related Protocols for Cryptocurrencies

Blockchain based systems, in particular cryptocurrencies, face a serious limitation: scalability. This holds, especially, in terms of number of transactions per second. Several alternatives are currently being pursued by both the research and practitioner communities. One venue for exploration is on protocols that do not constantly add transactions on the blockchain and therefore do not consume the blockchain\u27s resources. This is done using off-chain transactions, i.e., protocols that minimize the interaction with the blockchain, also commonly known as Layer-2 approaches. This work relates several existing off-chain channel methods, also known as payment and state channels, channel network constructions methods, and other components as channel and network management protocols, e.g., routing nodes. All these components are crucial to keep the usability of the channel, and are often overlooked. For the best of our knowledge, this work is the first to propose a taxonomy for all the components of the Layer-2. We provide an extensive coverage on the state-of-art protocols available. We also outline their respective approaches, and discuss their advantages and disadvantages