FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker

Ciampi, Michele; Ishaq, Muhammad; Magdon‐Ismail, Malik; Ostrovsky, Rafail; Zikas, Vassilis

doi:10.1007/978-3-031-07689-3_31

Cited by 13 publications

(8 citation statements)

References 24 publications

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“…Finally, recent works [11,29,55] have proposed multi-party computation [111] to mitigate front-running attacks. We discuss their current drawbacks as a promising approach for future work in Section 6.…”

Section: Related Workmentioning

confidence: 99%

FairBlock: Preventing Blockchain Front-Running with Minimal Overheads

Momeni

Gorbunov

Zhang

2023

Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering

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This thesis consists of material all of which I authored or co-authored: see Statement of Contributions included in the thesis. This is a true copy of the thesis, including any required final revisions, as accepted by my examiners.I understand that my thesis may be made electronically available to the public. I am also grateful to my thesis readers: Alfred Menezes and Mohammad Hajiabadi for offering their time and invaluable perspectives on this thesis. v Dedication This is dedicated to the one I love, my lovely family, and loved ones in PS752. vi

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Section: Related Workmentioning

confidence: 99%

FairBlock: Preventing Blockchain Front-Running with Minimal Overheads

Momeni

Gorbunov

Zhang

2023

Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering

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“…For (18), let S X − → S ′ , where X ∈ κ B (P) * maximises the gain of B. Since B ⊆ A, by Definition 10 (choosing the identity function for the first renaming ρ 0 and ρ for the second renaming ρ 1 ), there exist X ′ and R ′ such that S ρ…”

Section: Appendix a Proofsmentioning

confidence: 99%

“…Given the huge practical relevance of MEV, several research efforts have been made to improve its understanding. However, most approaches are preeminently empirical, as they focus on the definition of heuristics to extract value from certain classes of protocols [6]- [9], on the quantification of their impact in the wild [10]- [13], or on techniques to mitigate the effects of MEV attacks [14]- [18]. There are only a few attempts to provide MEV with a rigorous definition [19]- [21], and the resulting notions are not completely satisfactory, as we discuss in detail in Section VII.…”

Section: Introductionmentioning

confidence: 99%

A theoretical basis for Blockchain Extractable Value

Bartoletti¹,

Zunino²

2023

Preprint

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Extractable Value refers to a wide class of economic attacks to public blockchains, where adversaries with the power to reorder, drop or insert transactions in a block can "extract" value from user transactions. Empirical research has shown that mainstream protocols, like e.g. decentralized exchanges, are massively targeted by these attacks, with detrimental effects on their users and on the blockchain network. Despite the growing impact of these attacks in the real world, theoretical foundations are still missing. In this paper we propose a formal theory of Extractable Value, based on a general, abstract model of blockchains and smart contracts. Our theory is the basis for formal proofs of security against Extractable Value attacks.

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“…A separate line of work seeks to design specific CFMMs with good properties by identifying good bonding functions, variations and combinations of CFMMs in a dynamic setting with a specific focus on optimizing fees, and minimizing arbitrage and slippage (Angeris, Evans, Chitra, and Boyd 2022;Engel and Herlihy 2021a;Engel and Herlihy 2021b;Port and Tiruviluamala 2022;Wu and McTighe 2022;Ciampi et al 2022;Forgy and Lau 2021;Krishnamachari et al 2021;Wang and Krishnamachari 2022;Felekis and Kristensen 2022;Jensen et al 2021). While fees could be easily integrated into our model, they have no bearing on complexity-approximation trade-offs and thus we generally ignore them in this paper for simplicity.…”

Section: Literature Reviewmentioning

confidence: 99%

Complexity-Approximation Trade-offs in Exchange Mechanisms: AMMs vs. LOBs

Milionis¹,

Moallemi²,

Roughgarden³

2023

Preprint

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This paper presents a general framework for the design and analysis of exchange mechanisms between two assets that unifies and enables comparisons between the two dominant paradigms for exchange, constant function market markers (CFMMs) and limit order books (LOBs). In our framework, each liquidity provider (LP) submits to the exchange a downward-sloping demand curve, specifying the quantity of the risky asset it wishes to hold at each price; the exchange buys and sells the risky asset so as to satisfy the aggregate submitted demand. In general, such a mechanism is budget-balanced (i.e., it stays solvent and does not make or lose money) and enables price discovery (i.e., arbitrageurs are incentivized to trade until the exchange's price matches the external market price of the risky asset). Different exchange mechanisms correspond to different restrictions on the set of acceptable demand curves.The primary goal of this paper is to formalize an approximation-complexity trade-off that pervades the design of exchange mechanisms. For example, CFMMs give up expressiveness in favor of simplicity: the aggregate demand curve of the LPs can be described using constant space (the liquidity parameter), but most demand curves cannot be well approximated by any function in the corresponding single-dimensional family. LOBs, intuitively, make the opposite trade-off: any downward-slowing demand curve can be well approximated by a collection of limit orders, but the space needed to describe the state of a LOB can be large.This paper introduces a general measure of exchange complexity, defined by the minimal set of basis functions that generate, through their conical hull, all of the demand functions allowed by an exchange. With this complexity measure in place, we investigate the design of optimally expressive exchange mechanisms, meaning the lowest complexity mechanisms that

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FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker

Cited by 13 publications

References 24 publications

FairBlock: Preventing Blockchain Front-Running with Minimal Overheads

FairBlock: Preventing Blockchain Front-Running with Minimal Overheads

A theoretical basis for Blockchain Extractable Value

Complexity-Approximation Trade-offs in Exchange Mechanisms: AMMs vs. LOBs

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