Reward Mechanism for Blockchains Using Evolutionary Game Theory

Shashank Motepalli, Hans Arno Jacobsen

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

13 Scopus citations

Abstract

Blockchains have witnessed widespread adoption in the past decade in various fields. The growing demand makes their scalability and sustainability challenges more evident than ever. As a result, more and more blockchains have begun to adopt proof-of-stake (PoS) consensus protocols to address those challenges. One of the fundamental characteristics of any blockchain technology is its crypto-economics and incentives. Lately, each PoS blockchain has designed a unique reward mechanism, yet, many of them are prone to free-rider and nothing-at-stake problems. To better understand the ad-hoc design of reward mechanisms, in this paper, we develop a reward mechanism framework that could apply to many PoS blockchains. We formulate the block validation game wherein the rewards are distributed for validating the blocks correctly. Using evolutionary game theory, we analyze how the participants' behaviour could potentially evolve with the reward mechanism. Also, penalties are found to play a central role in maintaining the integrity of blockchains.

Original languageEnglish
Title of host publication2021 3rd Conference on Blockchain Research and Applications for Innovative Networks and Services, BRAINS 2021
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages217-224
Number of pages8
ISBN (Electronic)9781665439244
DOIs
StatePublished - 27 Sep 2021
Externally publishedYes
Event3rd Conference on Blockchain Research and Applications for Innovative Networks and Services, BRAINS 2021 - Virtual, Paris, France
Duration: 27 Sep 202130 Sep 2021

Publication series

Name2021 3rd Conference on Blockchain Research and Applications for Innovative Networks and Services, BRAINS 2021

Conference

Conference3rd Conference on Blockchain Research and Applications for Innovative Networks and Services, BRAINS 2021
Country/TerritoryFrance
CityVirtual, Paris
Period27/09/2130/09/21

Keywords

  • BFT
  • blockchain
  • Evolutionary game theory
  • incentive mechanism
  • PoS

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