Prrr: Personal Random Rewards for Blockchain Reporting

TL;DR

Prrr introduces a novel mechanism for blockchain reporting that assigns random heterogeneous rewards to reports, balancing security, efficiency, and decentralization through asymmetric incentives.

Contribution

It proposes Prrr, the first game-theoretic mechanism using deliberate participant asymmetry to overcome the security-performance trade-off in blockchain reporting.

Findings

Prrr achieves incentive compatibility with a second-price-style reward system.

The protocol is robust against collusion and Sybil attacks.

Prrr is applicable to various smart contracts requiring timely reports.

Abstract

Smart contracts, the stateful programs running on blockchains, often rely on reports. Publishers are paid to publish these reports on the blockchain. Designing protocols that incentivize timely reporting is the prevalent reporting problem. But existing solutions face a security-performance trade-off: Relying on a small set of trusted publishers introduces centralization risks, while allowing open publication results in an excessive number of reports on the blockchain. We identify the root cause of this trade-off to be the standard symmetric reward design, which treats all reports equally. We prove that no symmetric-reward mechanism can overcome the trade-off. We present Personal Random Rewards for Reporting (Prrr), a protocol that assigns random heterogeneous values to reports. We call this novel mechanism-design concept Ex-Ante Synthetic Asymmetry. To the best of our knowledge, Prrr is the first game-theoretic mechanism (in any context) that deliberately forms participant asymmetry. Prrr employs a second-price-style settlement to allocate rewards, ensuring incentive compatibility and achieving both security and efficiency. Following the protocol constitutes a Subgame-Perfect Nash Equilibrium, robust against collusion and Sybil attacks. Prrr is applicable to numerous smart contracts that rely on timely reports.