Proof-of-Fee, Part 2

spiral staircase
In Part 1 of this paper we laid the foundations for Proof of Fee. Some of the ideas expressed there may be different from what you have seen elsewhere, and we do urge you to read that before you begin here. In Part 2 of this paper, below, we get into the mechanics and implementation details of Proof-of-Fee (PoF).

From empirical evidence over the last five years, we have seen few malicious attacks by validators; clearly something is working. We don’t want to break something that is working. What we want to evaluate is whether we can make it sustainably work at a lower cost.…

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Proof of Fee, Part 1

spiral staircase

The Cost of Consensus

 

 

TL;DR

As an alternative to the (near-universally deployed) Delegated Proof of Stake (DPoS), we propose Proof of Fee (PoF), a sybil resistance technique designed natively and with consideration of the benefits and tradeoffs of PBFT consensus from empirical experience.

  • Profits to blockchains are slim to non-existent. Low consensus costs are foundational for any chain that wishes to provide consumer surplus and profit to coin-holders; where excess winnings of the chain can be distributed to all account holders without preference to an investor class of “stakers”.
  • In PoF the cost of consensus is lowered maximally to the operator opportunity cost; with such an approach, the social cost of dilution through issuance is minimized.
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Spring Forward 

Growth requires challenge. 

There was plenty of such fuel over the last several weeks, challenging our community to run a functional and fair network that is more poised for growth. This announcement will detail what has happened, how we addressed it and how, along the way, we solved a number of different problems and improved prospects going forward.

On 9 April 2022, the 0L Network halted. Multiple factors combined to create the incident; factors that started small and cascaded until the entire network ceased to produce blocks. While the detailed causes and the technical forensics have been discussed at length in our community meetings, the important point to raise here is that the halt was avoidable – or rather would have been avoidable – had a sufficient number within our validator community been more attentive to their machines and taken steps in a timely fashion.…

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Research Report: Decentralizing Permissioned Blockchain with Delay Towers

This report, published 18 March 2022, looks at the Delay Towers mechanism that was pioneered and deployed in the 0L Network.

The article was co-authored by Shashank Motepalli and Hans-Arno Jocobsen of the University of Toronoto. We quote the original synopsis below:

Growing excitement around permissionless blockchains is uncovering its latent scalability concerns. Permissioned blockchains offer high transactional throughput and low latencies while compromising decentralization. In the quest for a decentralized, scalable blockchain fabric, i.e., to offer the scalability of permissioned blockchain in a permissionless setting, we present L4L to encourage decentralization over the permissioned Libra network without compromising its sustainability.…

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Future-Proofing the Economics of Blockchains (Pt. 3)

TL;DR

Incentives are hard. There are many different stakeholders in a healthy economy and the needs of those stakeholders can be a moving target. Advanced mechanisms are employed to address the trade-off between clear rules and adaptive capacity. Polycentric programs with community wallets provide a means of voluntarily contributing to capex, while thermostatic security dynamically rebalances validator rewards based on validator count in order to manage opex. Furthermore, incentive alignment between network operators and end users is enhanced via two mechanisms: i) the introduction of slow wallets for validators which rate limit the availability to spend their rewards and ii) the introduction of an identity subsidy whereby end users may submit proofs of elapsed time to establish persistent identities and earn rewards (which do not have spending rate limits).…

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