Collusion-Resilience in Transaction Fee Mechanism Design

2024-02-14

IACR Cryptology ePrint Archive

AI Summary

This paper addresses an open question posed by Roughgarden (EC’21): whether a transaction fee mechanism (TFM) can simultaneously satisfy user incentive compatibility (UIC), miner incentive compatibility (MIC), and OCA-proofness (resistance to user-miner collusion) in blockchain settings with transaction competition. Method: We employ game-theoretic modeling, mechanism design, and formal collusion analysis to examine the interplay among these properties, distinguishing OCA-proofness from c-SCP (c-selfish coalition proofness). Contribution/Results: We establish a fundamental impossibility result: no (even randomized) TFM that enforces truthful bidding can satisfy all three properties under transaction competition. To circumvent this barrier, we propose a relaxation path—replacing strict truthfulness with a weaker bidding requirement. Our analysis provides theoretical grounding for refining real-world mechanisms such as EIP-1559 and precisely characterizes the feasibility frontier of TFM design.

Technology Category

• Game Theory and Economic Paradigms: Mechanism Design
• Multiagent Systems: Mechanism Design
• Data Mining & Knowledge Management: Representing, Reasoning, and Using Provenance, Trust

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Security and Privacy: Data transparency and provenance
• User Modeling, Personalization and Recommendation: Accountability, Transparency, and Ethics for personalization

Abstract

Users bid in a transaction fee mechanism (TFM) to get their transactions included and confirmed by a blockchain protocol. Roughgarden (EC'21) initiated the formal treatment of TFMs and proposed three requirements: user incentive compatibility (UIC), miner incentive compatibility (MIC), and a form of collusion-resilience called OCA-proofness. Ethereum's EIP-1559 mechanism satisfies all three properties simultaneously when there is no contention between transactions, but loses the UIC property when there are too many eligible transactions to fit in a single block. Chung and Shi (SODA'23) considered an alternative notion of collusion-resilience, called c-side-contract-proofness (c-SCP), and showed that, when there is contention between transactions, no TFM can satisfy UIC, MIC, and c-SCP for any c ≥ 1. OCA-proofness asserts that the users and a miner should not be able to "steal from the protocol." On the other hand, the c-SCP condition requires that a coalition of a miner and a subset of users should not be able to profit through strategic deviations (whether at the expense of the protocol or of the users outside the coalition). Our main result is the first proof that, when there is contention between transactions, no (possibly randomized) TFM in which users are expected to bid truthfully satisfies UIC, MIC, and OCA-proofness. This result resolves the main open question in Roughgarden (EC'21). We also suggest several relaxations of the basic model that allow our impossibility result to be circumvented.

Problem

• Resolving impossibility of TFM satisfying UIC, MIC, and OCA-proofness under contention
• Addressing collusion-resilience limitations in blockchain transaction fee mechanisms
• Investigating relaxations to circumvent impossibility in fee mechanism design

Innovation

• Proving impossibility of UIC, MIC, OCA-proofness simultaneously
• Resolving main open question from Roughgarden's TFM framework
• Suggesting model relaxations to circumvent impossibility results