Aegis: Tethering a Blockchain with Primary-Chain Stake

2024-06-09

AI Summary

Pegged chains face a fundamental trade-off among security, stability, and resilience to token price volatility when operating without centralized control or strong synchrony assumptions. Method: We propose a decentralized pegging protocol wherein pegged-chain validators stake main-chain tokens (e.g., ETH) rather than native tokens. Our approach introduces a hybrid network model—synchronous on the main chain and partially synchronous on the pegged chain—and designs a dynamic committee mechanism anchored to main-chain block hashes, checkpoint persistence and reset protocols, and a BFT-based consensus layer augmented with checkpoint-driven state finality. Contribution/Results: We formally prove that secure pegging is solvable under this hybrid synchrony assumption but impossible under pure partial synchrony, thereby establishing a tight theoretical boundary for pegged-chain design. Practically, our protocol achieves low-latency finality, safety at all times, and eliminates price-volatility risks associated with local token staking.

Technology Category

• Multiagent Systems: Mechanism Design
• Game Theory and Economic Paradigms: Mechanism Design
• Philosophy and Ethics of AI: Privacy & Security

Application Category

• Security and Privacy: Blockchains and distributed ledgers
• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Systems and Infrastructure for Web, Mobile and WoT: Decentralized Web and Fediverse systems

Abstract

Blockchains implement decentralized monetary systems and applications. Recent advancements enable what we call tethering a blockchain to a primary blockchain, securing the tethered chain by nodes that post primary-chain tokens as collateral. The collateral ensures nodes behave as intended, until they withdraw it. Unlike a Proof of Stake blockchain which uses its own token as collateral, using primary-chain tokens shields the tethered chain from the volatility of its own token. State-of-the-art tethered blockchains either rely on centralization, or make extreme assumptions: that all communication is synchronous, that operators remain correct even post-withdrawal, or that withdrawals can be indefinitely delayed by tethered-chain failures. We prove that with partial synchrony, there is no solution to the problem. However, under the standard assumptions that communication with the primary chain is synchronous and communication among the tethered chain nodes is partially synchronous, there is a solution. We present a tethered-chain protocol called Aegis. Aegis uses references from its blocks to primary blocks to define committees, checkpoints on the primary chain to perpetuate decisions, and resets to establish new committees when previous ones become obsolete. It ensures safety at all times and rapid progress when latency among Aegis nodes is low.

Problem

• Securing tethered blockchains with primary-chain collateral
• Overcoming extreme assumptions in tethered blockchain design
• Ensuring safety and progress under partial synchrony

Innovation

• Tethers blockchain using primary-chain stake
• Uses primary-chain checkpoints for decisions
• Ensures safety and rapid progress