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1. Private Proof-of-Stake Blockchains using Differentially-Private Stake Distortion

   Wang, Chenghong; Pujol, David; Nayak, Kartik; Machanavajjhala, Ashwin (August 2023, 32nd USENIX Security Symposium (USENIX Security 23))

   Safety, liveness, and privacy are three critical properties for any private proof-of-stake (PoS) blockchain. However, prior work (SP'21) has shown that to obtain safety and liveness, a PoS blockchain must in theory forgo privacy. In particular, to obtain safety and liveness, PoS blockchains elect parties proportional to their stake, which, in turn, can potentially reveal the stake of a party even if the transaction processing mechanism is private. In this work, we make two key contributions. First, we present the first stake inference attack that can be actually run in practice. Specifically, our attack applies to both deterministic and randomized PoS protocols and has exponentially lesser running time in comparison with the SOTA approach. Second, we use differentially private stake distortion to achieve privacy in PoS blockchains. We formulate certain privacy requirements to achieve transaction and stake privacy, and design two stake distortion mechanisms that any PoS protocol can use. Moreover, we analyze our proposed mechanisms with Ethereum 2.0, a well-known PoS blockchain that is already operating in practice. The results indicate that our mechanisms mitigate stake inference risks and, at the same time, provide reasonable privacy while preserving required safety and liveness properties. 

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2. Optimal Incentive Mechanisms for Fair and Equitable Rewards in PoS Blockchains

   https://doi.org/10.1109/IPCCC55026.2022.9894306  

   Sahin, Hadi; Akkaya, Kemal; Ganapati, Sukumar (November 2022, IEEE)

   Blockchain technology that came with the introduction of Bitcoin offers many powerful use-cases while promising the establishment of distributed autonomous organizations (DAOs) that may transform our current understanding of client-server interactions on the cyberspace. They employ distributed consensus mechanisms that were subject to a lot of research in recent years. While most of such research focused on security and performance of consensus protocols, less attention was given to their incentive mechanisms which relate to a critical feature of blockchains. Unfortunately, while blockchains are advocating decentralized operations, they are not egalitarian due to existing incentive mechanisms. Many current consensus protocols inadvertently incentivize centralization of mining power and inequitable participation. This paper explores and evaluates alternative incentive mechanisms for a more decentralized and equitable participation. We first evaluate inequality in existing Proof of Stake (PoS) based incentive mechanisms, then we examine three alternatives in which rewards scheme is more partial to low-stakeholders. Through simulation, we show that two of our alternative mechanisms can reduce inequality and offer an attractive solution for sustainability of blockchain-based applications and DAOs. 

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3. Brief Announcement: Best-Possible Unpredictable Proof-Of-Stake

   https://doi.org/10.4230/lipics.disc.2024.45  

   Fan, Lei; Katz, Jonathan; Lu, Zhenghao; Thai, Phuc; Zhou, Hong-Sheng (January 2024, Schloss Dagstuhl – Leibniz-Zentrum für Informatik)

   Alistarh, Dan (Ed.)

   {"Abstract":["The proof-of-stake (PoS) protocols aim to reduce the unnecessary computing power waste seen in Bitcoin. Various practical and provably secure designs have been proposed, like Ouroboros Praos (Eurocrypt 2018) and Snow White (FC 2019). However, the essential security property of unpredictability in these protocols remains insufficiently explored. This paper delves into this property in the cryptographic setting to achieve the "best possible" unpredictability for PoS.\r\nWe first present an impossibility result for all PoS protocols under the single-extension design framework, where each honest player extends one chain per round. The state-of-the-art permissionless PoS protocols (e.g., Praos, Snow White, and more), are all under this single-extension framework. Our impossibility result states that, if a single-extension PoS protocol achieves the best possible unpredictability, then this protocol cannot be proven secure unless more than 73% of stake is honest. To overcome this impossibility, we introduce a new design framework called multi-extension PoS, allowing each honest player to extend multiple chains using a greedy strategy in a round. This strategy allows us to construct a class of PoS protocols that achieve the best possible unpredictability. It is noteworthy that these protocols can be proven secure, assuming a much smaller fraction (e.g., 57%) of stake to be honest."]} 

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4. Demo:Towards the Development of a Differentially Private Lightweight and Scalable Blockchain for IoT

   Shahid, Abdur; Pissinou, Niki; Njilla, Laurent; Aguilar, Edwin; Perez, Eric (November 2019, 16th IEEE International Conference on Mobile Ad-Hoc and Smart Systems (MASS))

   In this work, we demonstrate the design and implementation of a novel privacy-preserving blockchain for the resource-constrained Internet of Things (IoT). Blockchain, by design, ensures trust, provides built-in integrity of information and security of immutability in an IoT system without the need of a centralized entity. However, its slow transaction rate, lack of transaction privacy, and high resource consumption are three of the major hindrances to the practical realization of blockchain in IoT. While directed acyclic graphs (DAG)-based blockchain variants (e.g., hashgraph) improve the transaction rate, the other two problems remain open. To this end, we designed and constructed the prototype of a blockchain by utilizing the benefits of high transaction rate and miner-free transaction validation process from hashgraph. The proposed blockchain, coined as PrivLiteChain, implements the concept of local differential privacy to provide transaction privacy and temporal constraint to the lifecycle of the blockchain to make it lightweight. 

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5. SPRITE: Secure and Private Routing in Payment Channel Networks

   Panwar, Gaurav; Vishwanathan, Roopa; Torres, George; Misra Satyajayant (July 2024, ACM Asia Conference on Computer and Communications Security (ACM AsiaCCS))

   Payment channel networks are a promising solution to the scalability challenge of blockchains and are designed for significantly increased transaction throughput compared to the layer one blockchain. Since payment channel networks are essentially decentralized peerto- peer networks, routing transactions is a fundamental challenge. Payment channel networks have some unique security and privacy requirements that make pathfinding challenging, for instance, network topology is not publicly known, and sender/receiver privacy should be preserved, in addition to providing atomicity guarantees for payments. In this paper, we present an efficient privacypreserving routing protocol, SPRITE, for payment channel networks that supports concurrent transactions. By finding paths offline and processing transactions online, SPRITE can process transactions in just two rounds, which is more efficient compared to prior work. We evaluate SPRITE’s performance using Lightning Network data and prove its security using the Universal Composability framework. In contrast to the current cutting-edge methods that achieve rapid transactions, our approach significantly reduces the message complexity of the system by 3 orders of magnitude while maintaining similar latencies. 

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