MAD-DAG: Protecting Blockchain Consensus from MEV

2025-11-26

AI Summary

Selfish mining poses a severe threat to DAG-based blockchain security, especially under realistic adversarial conditions—including miner-extractable value (MEV), network propagation advantages, and bribery-induced compliant miners. Existing protocols (e.g., Colordag) are proven secure only under prohibitively high network delays, with their safety threshold collapsing to zero in practical settings. This paper proposes MAD-DAG—the first DAG protocol explicitly designed to withstand selfish mining in real-world networks. Its core innovation is a Mutual Assured Destruction (MAD) mechanism: rational miners voluntarily discard competing chain segments to raise the baseline security threshold. MAD-DAG integrates DAG topology, a novel ledger function, and conservative reward rules, and models miner incentives via a Markov Decision Process. Experiments demonstrate that under concurrent high-MEV and compliant-miner scenarios, MAD-DAG achieves a robust safety threshold of 11%–31%, substantially outperforming both Colordag and Bitcoin.

Technology Category

• Multiagent Systems: Mechanism Design
• Data Mining & Knowledge Management: Representing, Reasoning, and Using Provenance, Trust
• Game Theory and Economic Paradigms: Mechanism Design

Application Category

• Security and Privacy: Blockchains and distributed ledgers
• Economics, Online Markets and Human Computation: Economic aspects of blockchain and cryptocurrencies
• Web Mining and Content Analysis: Web data provenance, reliability, and authenticity

Abstract

Blockchain security is threatened by selfish mining, where a miner (operator) deviates from the protocol to increase their revenue. Selfish mining is exacerbated by adverse conditions: rushing (network propagation advantage for the selfish miner), varying block rewards due to block contents, called miner extractable value (MEV), and petty-compliant miners who accept bribes from the selfish miner. The state-of-the-art selfish-mining-resistant blockchain protocol, Colordag, does not treat these adverse conditions and was proven secure only when its latency is impractically high. We present MAD-DAG, Mutually-Assured-Destruction Directed-Acyclic-Graph, the first practical protocol to counter selfish mining under adverse conditions. MAD-DAG achieves this thanks to its novel ledger function, which discards the contents of equal-length chains competing to be the longest. We analyze selfish mining in both Colordag and MAD-DAG by modeling a rational miner using a Markov Decision Process (MDP). We obtain a tractable model for both by developing conservative reward rules that favor the selfish miner to yield an upper bound on selfish mining revenue. To the best of our knowledge, this is the first tractable model of selfish mining in a practical DAG-based blockchain. This enables us to obtain a lower bound on the security threshold, the minimum fraction of computational power a miner needs in order to profit from selfish mining. MAD-DAG withstands adverse conditions under which Colordag and Bitcoin fail, while otherwise maintaining comparable security. For example, with petty-compliant miners and high levels of block reward variability, MAD-DAG's security threshold ranges from 11% to 31%, whereas both Colordag and Bitcoin achieve 0% for all levels.

Problem

• Protecting blockchain consensus from selfish mining attacks
• Addressing MEV and network advantages in mining protocols
• Establishing practical security thresholds under adverse conditions

Innovation

• MAD-DAG protocol counters selfish mining practically
• Novel ledger function discards competing chain contents
• Modeled rational miner behavior using Markov Decision Process