Balakrishnan Chandrasekaran

Vabuk Pahari, Balakrishnan Chandrasekaran, Johnnatan Messias et al.

A decentralized autonomous organization (DAO) is a governing entity that empowers its stakeholders (i.e., users who hold one or more of its tokens) to manage blockchain-based protocols (i.e., smart contracts) collaboratively. The governance of a DAO is explicitly encoded in the DAO's governance contract, which defines how stakeholders participate in governance and how much influence (or voting power) they have in any decision. While decentralization and autonomy are the fundamental tenets of a DAO's design, empirical evidence suggests that in practice governance is often highly centralized. In this work, we study the designs and implementations of 48 public and actively used DAOs, with substantially large capital, deployed on Ethereum. We identify how three key governance mechanisms--token registration, staking, and delegation--originally introduced to improve security or participation, contribute to the concentration of voting power. Unlike prior work on centralization of voting power in specific DAOs, our findings reveal that these governance mechanisms of DAOs themselves systematically reinforce centralization. By elucidating the relationship between governance design and voting centralization, this work advances the understanding of DAO governance structures and highlights the inherent trade-offs between decentralization, security, and usability of DAOs.

Johnnatan Messias, Mohamed Alzayat, Balakrishnan Chandrasekaran et al.

Most public blockchain protocols, including the popular Bitcoin and Ethereum blockchains, do not formally specify the order in which miners should select transactions from the pool of pending (or uncommitted) transactions for inclusion in the blockchain. Over the years, informal conventions or "norms" for transaction ordering have, however, emerged via the use of shared software by miners, e.g., the GetBlockTemplate (GBT) mining protocol in Bitcoin Core. Today, a widely held view is that Bitcoin miners prioritize transactions based on their offered "transaction fee-per-byte." Bitcoin users are, consequently, encouraged to increase the fees to accelerate the commitment of their transactions, particularly during periods of congestion. In this paper, we audit the Bitcoin blockchain and present statistically significant evidence of mining pools deviating from the norms to accelerate the commitment of transactions for which they have (i) a selfish or vested interest, or (ii) received dark-fee payments via opaque (non-public) side-channels. As blockchains are increasingly being used as a record-keeping substrate for a variety of decentralized (financial technology) systems, our findings call for an urgent discussion on defining neutrality norms that miners must adhere to when ordering transactions in the chains. Finally, we make our data sets and scripts publicly available.

Mohamed Alzayat, Johnnatan Messias, Balakrishnan Chandrasekaran et al.

We study efficiency in a proof-of-work blockchain with non-zero latencies, focusing in particular on the (inequality in) individual miners' efficiencies. Prior work attributed differences in miners' efficiencies mostly to attacks, but we pursue a different question: Can inequality in miners' efficiencies be explained by delays, even when all miners are honest? Traditionally, such efficiency-related questions were tackled only at the level of the overall system, and in a peer-to-peer (P2P) setting where miners directly connect to one another. Despite it being common today for miners to pool compute capacities in a mining pool managed by a centralized coordinator, efficiency in such a coordinated setting has barely been studied. In this paper, we propose a simple model of a proof-of-work blockchain with latencies for both the P2P and the coordinated settings. We derive a closed-form expression for the efficiency in the coordinated setting with an arbitrary number of miners and arbitrary latencies, both for the overall system and for each individual miner. We leverage this result to show that inequalities arise from variability in the delays, but that if all miners are equidistant from the coordinator, they have equal efficiency irrespective of their compute capacities. We then prove that, under a natural consistency condition, the overall system efficiency in the P2P setting is higher than that in the coordinated setting. Finally, we perform a simulation-based study to demonstrate that even in the P2P setting delays between miners introduce inequalities, and that there is a more complex interplay between delays and compute capacities.