Why Harvard Research on a Low-Profit Tezos Attack Matters for Proof-of-Stake

A recent academic study says Tezos is threatened by “selfish mining,” providing a valid threat model for other live and up-and-coming proof-of-stake (PoS) cryptocurrencies.

That’s the finding from Selfish Behavior in the Tezos Proof-of-Stake Protocol, published last November by then-Harvard researcher and current Google engineering intern Michael Neuder.

The paper from Neuder and other Harvard researchers shows the profitability – albeit small – of “selfish endorsing” attacks in Tezos, a variant of selfish mining. 

Luckily for Tezos, the selfish mining concern can easily be patched through the network’s flexible on-chain governance model, which conducts periodic votes for protocol changes in lieu of hard or soft forks.

“It was a great research paper and we’d love to see more focus on economic and complex-system-interactions in cryptocurrency systems in academic and industrial research,” Tezos Chief Security Officer Ryan Lackey told CoinDesk in an email. “Thanks to our governance model, it’s pretty easy to get [the fix] adopted.”

However, the ability to address governance issues quickly raises questions concerning possible trade-offs involved with on-chain governance, how voting works and the possible outcomes of staking centralization.

Key findings

As described and proven by the researchers, a Tezos baker (the blockchain’s term for “miner”) can be rationally incentivized to create their own blocks and receive endorsements from other bakers not connected to the main chain, creating a secondary invalid chain.

Through the attack, the initial baker gains both the block and endorsement reward for the invalid block and can continue the attack until detected. If exposed, the baker’s stake is slashed, punishing the baker for dishonest mining.

In Tezos, stakers gain fractions of a block reward for endorsing the creation of a new block, which packages network transactions. Selfish mining occurs in Nakamoto-style consensus mechanisms, like Tezos,…

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