Byzantine Attacks Exploiting Penalties in Ethereum PoS

TL;DR

This paper analyzes how the inactivity leak mechanism in Ethereum's PoS can be exploited by Byzantine validators to threaten blockchain safety, revealing potential vulnerabilities in penalizing inactive nodes.

Contribution

It provides a theoretical analysis of safety risks introduced by the inactivity leak, highlighting scenarios where Byzantine validators can compromise security.

Findings

Byzantine validators can expedite conflicting finalizations.

Inactivity leak can lead to probabilistic safety breaches.

Penalizing inactive nodes may weaken blockchain safety.

Abstract

In May 2023, the Ethereum blockchain experienced its first inactivity leak, a mechanism designed to reinstate chain finalization amid persistent network disruptions. This mechanism aims to reduce the voting power of validators who are unreachable within the network, reallocating this power to active validators. This paper investigates the implications of the inactivity leak on safety within the Ethereum blockchain. Our theoretical analysis reveals scenarios where actions by Byzantine validators expedite the finalization of two conflicting branches, and instances where Byzantine validators reach a voting power exceeding the critical safety threshold of one-third. Additionally, we revisit the probabilistic bouncing attack, illustrating how the inactivity leak can result in a probabilistic breach of safety, potentially allowing Byzantine validators to exceed the one-third safety threshold. Our findings uncover how penalizing inactive nodes can compromise blockchain properties, particularly in the presence of Byzantine validators capable of coordinating actions.