Conference Agenda

To support a growing financial system, many recent blockchain innovations (e.g., layer-2 scaling solutions, proof-of-stake layer-1 chains, cross-chain interoperability bridges, and data availability layers, etc.) adopt an “optimistic” design principle, that is, the system proceeds as if all participants are well-behaving, presumably sustained by some “stake-and-slash” mechanisms. We formulate the logic behind such optimistic systems in a simple game and characterize its equilibria. We point out that the “optimistic” assumption under current designs is not compatible with all participants being rational. Therefore, to ensure security, protocol designers have to impose trust assumptions regarding the presence of altruistic participants. We explore alternative design changes that may help alleviate the identified problems, including introducing redistribution across participants or adopting succinct proof-based designs.