Selfish Behavior in the Tezos Proof-of-Stake Protocol

TL;DR

This paper analyzes the Tezos Proof-of-Stake protocol, revealing incentives for dishonest behavior, and proposes modifications to mitigate selfish attacks, providing a framework for analyzing similar protocols.

Contribution

It offers a theoretical analysis of selfish endorsing attacks in Tezos and proposes protocol modifications to prevent such attacks.

Findings

Selfish endorsing can be profitable under certain conditions.

A simple protocol change reduces attack profitability.

The new scheme is secure against short-length selfish attacks.

Abstract

Proof-of-Stake consensus protocols give rise to complex modeling challenges. We analyze the recently-updated Tezos Proof-of-Stake protocol and demonstrate that, under certain conditions, rational participants are incentivized to behave dishonestly. In doing so, we provide a theoretical analysis of the feasibility and profitability of a block stealing attack that we call selfish endorsing, a concrete instance of an attack previously only theoretically considered. We propose and analyze a simple change to the Tezos protocol which significantly reduces the (already small) profitability of this dishonest behavior, and introduce a new delay and reward scheme that is provably secure against length-1 and length-2 selfish endorsing attacks. Our framework provides a template for analyzing other Proof-of-Stake implementations for selfish behavior.