Wendy, the Good Little Fairness Widget

TL;DR

This paper introduces Wendy, a low-overhead, blockchain-agnostic protocol suite designed to ensure relative order fairness of transactions, addressing manipulation issues in decentralized trading markets.

Contribution

Wendy provides flexible, independent fairness protocols that can be integrated into existing blockchains to prevent transaction order manipulation.

Findings

Wendy can implement various fairness concepts effectively.

The protocols are low overhead and compatible with different blockchain architectures.

Multiple independent fair markets can operate simultaneously on the same chain.

Abstract

The advent of decentralized trading markets introduces a number of new challenges for consensus protocols. In addition to the `usual' attacks -- a subset of the validators trying to prevent disagreement -- there is now the possibility of financial fraud, which can abuse properties not normally considered critical in consensus protocols. We investigate the issues of attackers manipulating or exploiting the order in which transactions are scheduled in the blockchain. More concretely, we look into relative order fairness, i.e., ways we can assure that the relative order of transactions is fair. We show that one of the more intuitive definitions of fairness is impossible to achieve. We then present Wendy, a group of low overhead protocols that can implement different concepts of fairness. Wendy acts as an additional widget for an existing blockchain, and is largely agnostic to the underlying blockchain and its security assumptions. Furthermore, it is possible to apply a the protocol only for a subset of the transactions, and thus run several independent fair markets on the same chain.