Publication Type
Conference Paper
Version
publishedVersion
Publication Date
12-2021
Abstract
Blockchain-based auctions play a key role in decentralized finance, such as liquidation of collaterals in crypto-lending. In this research, we show that a Blockchain-based auction is subject to the threat to availability because of the characteristics of the Blockchain platform, which could lead to auction inefficiency or even market failure. Specifically, an adversary could occupy all of the transaction capacity of an auction by sending transactions with sufficiently high transaction fees, and then win the item in an auction with a nearly zero bid price as there are no competitors available. We discuss how to prevent this kind of strategic bidding behavior, also known as block stuffing attack, with auction mechanism design.
Keywords
Blockchain, Auction, Mechanism Design, Transaction Fee, Transaction Capacity, Block Stuffing
Discipline
Databases and Information Systems
Research Areas
Data Science and Engineering
Publication
32nd Workshop on Information Systems and Economics (WISE) 2021, December 16-17
Publisher
Elsevier
City or Country
Austin, TX
Citation
KE, Ping Fan; CHEN, Jianqing; and GUO, Zhiling.
Strategic behavior and market inefficiency in blockchain-based auctions. (2021). 32nd Workshop on Information Systems and Economics (WISE) 2021, December 16-17.
Available at: https://ink.library.smu.edu.sg/sis_research/7263
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Comments
Presentation Video: https://www.youtube.com/watch?v=gw04ULXLUuM