Paper 2023/868
Data Independent Order Policy Enforcement: Limitations and Solutions
Abstract
Order manipulation attacks such as frontrunning and sandwiching have become an increasing concern in blockchain applications such as DeFi. To protect from such attacks, several recent works have designed order policy enforcement (OPE) protocols to order transactions fairly in a data-independent fashion. However, while the manipulation attacks are motivated by monetary profits, the defenses assume honesty among a significantly large set of participants. In existing protocols, if all participants are rational, they may be incentivized to collude and circumvent the order policy without incurring any penalty. This work makes two key contributions. First, we explore whether the need for the honesty assumption is fundamental. Indeed, we show that it is impossible to design OPE protocols under some requirements when all parties are rational. Second, we explore the tradeoffs needed to circumvent the impossibility result. In the process, we propose a novel concept of rationally binding transactions that allows us to construct AnimaguSwap, the first content-oblivious Automated Market Makers (AMM) interface that is secure under rationality. A key design in AnimaguSwap is that user orders may transform to a different direction---like the fictional creatures Animagi in Harry Potter---in order to achieve the desired game theoretic properties. We report on a prototype implementation of AnimaguSwap and performance evaluation results demonstrating its practicality.
Metadata
- Available format(s)
-
PDF
- Category
- Cryptographic protocols
- Publication info
- Published elsewhere. Major revision. ACM CCS 2024
- DOI
- 10.1145/3658644.3670367
- Keywords
- BlockchainsDe-FiMEVRationalityMechanism Design
- Contact author(s)
- sarisht wadhwa @ duke edu
- History
- 2024-06-06: last of 2 revisions
- 2023-06-07: received
- See all versions
- Short URL
- https://ia.cr/2023/868
- License
-
CC BY
BibTeX
@misc{cryptoeprint:2023/868, author = {Sarisht Wadhwa and Luca Zanolini and Francesco D'Amato and Aditya Asgaonkar and Chengrui Fang and Fan Zhang and Kartik Nayak}, title = {Data Independent Order Policy Enforcement: Limitations and Solutions}, howpublished = {Cryptology {ePrint} Archive, Paper 2023/868}, year = {2023}, doi = {10.1145/3658644.3670367}, url = {https://eprint.iacr.org/2023/868} }