Hedging Against Sore Loser Attacks in Cross-Chain Transactions

TL;DR

This paper introduces protocols to mitigate sore loser attacks in cross-chain transactions, reducing their impact in synchronous communication settings, thereby enhancing security and reliability in blockchain interoperability.

Contribution

It proposes new distributed protocols that significantly lower the risk of sore loser attacks across various cross-chain transaction types.

Findings

Protocols effectively reduce attack impact

Applicable to multiple transaction types

Enhance security in blockchain cross-communication

Abstract

A *sore loser attack* in cross-blockchain commerce rises when one party decides to halt participation partway through, leaving other parties' assets locked up for a long duration. Although vulnerability to sore loser attacks cannot be entirely eliminated, it can be reduced to an arbitrarily low level. This paper proposes new distributed protocols for hedging a range of cross-chain transactions in a synchronous communication model, such as two-party swaps, $n$-party swaps, brokered transactions, and auctions.