A mechanism design overview of Sedna

TL;DR

This paper analyzes incentive issues in Sedna, a multi-proposer consensus protocol, identifying potential manipulation by proposers and proposing mechanisms to ensure honest participation, ultimately reducing MEV costs significantly.

Contribution

It introduces PIVOT-K, a bounty mechanism for Sedna, and provides incentive compatibility conditions to prevent collusion and withholding attacks.

Findings

Delay probability characterized by large deviation bounds.

PIVOT-K incentivizes honest decoding participation.

Sedna can reduce MEV costs to 0.04% of transaction value.

Abstract

Sedna is a coded multi-proposer consensus protocol in which a sender shards a transaction payload into rateless symbols and disseminates them across parallel proposer lanes, providing high throughput and ``until decode'' privacy. This paper studies a sharp incentive failure in such systems. A cartel of lane proposers can withhold the bundles addressed to its lanes, slowing the chain's symbol accumulation while privately pooling the missing symbols. Because finalized symbols become public, the cartel's multi-slot information lead is governed by a chain level delay event where the chain fails to accumulate the $\kappa$ bundles needed for decoding by the honest horizon $t^\star=\lceil \kappa/m\rceil$. We characterize the resulting delay probability with KL-type large deviation bounds and show a knife edge pathology when the slack $\Delta=t^\star m-\kappa$ is zero such that withholding a single bundle suffices to push inclusion into the next slot with high probability. We propose \textsf{PIVOT-$K$}, a Sedna native pivotal bundle bounty that concentrates rewards on the $\kappa$ bundles that actually trigger decoding, and we derive explicit incentive compatibility conditions against partial and coalition deviations. We further show that an adaptive sender ``ratchet'' that excludes lanes whose tickets were not redeemed collapses multi-slot withholding into a first slot deficit when $t^\star\ge 2$, reducing the required bounty by orders of magnitude. We close by bounding irreducible within slot decode races and providing parameter guidance and numerical illustrations. Our results show that for realistic parameters Sedna can reduce MEV costs to 0.04\% of the transaction value.