Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade
We propose a new approach for a secure, decentralized, and censorless upgrade of existing cryptocurrencies to newly created tokens without interaction with any external information sources (oracles). The proposed scheme is based on the burning of existing cryptocurrency tokens and implemented via th...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2024-03-01
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| Series: | Blockchain: Research and Applications |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096720923000453 |
| _version_ | 1797214897079058432 |
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| author | Mariia Rodinko Roman Oliynykov Andrii Nastenko |
| author_facet | Mariia Rodinko Roman Oliynykov Andrii Nastenko |
| author_sort | Mariia Rodinko |
| collection | DOAJ |
| description | We propose a new approach for a secure, decentralized, and censorless upgrade of existing cryptocurrencies to newly created tokens without interaction with any external information sources (oracles). The proposed scheme is based on the burning of existing cryptocurrency tokens and implemented via the multi-currency auction. The auction is carried out on the blockchain of the new token and implemented using a smart contract that processes participants' bids of burnt tokens of other cryptocurrencies and supports a new token price discovery algorithm for each cryptocurrency with no oracles or any other trusted source of information. Contrary to traditional ways of getting the new asset, like centralized and decentralized exchanges, our method requires no user registration (as well as no KYC — “know your customer” procedure that requires obligatory client identification) and provides a predicted supply level of the new asset for an adequate price within a model with economically rational participants. We provide the results of decentralized auction simulations implemented for several strategies of user behavior (based on bid prices with normal and log-normal distribution laws), both under the normal operation and in the presence of an adversary who follows specific strategies. |
| first_indexed | 2024-03-07T23:06:08Z |
| format | Article |
| id | doaj.art-727cf453dc0e4b66b6f01aaefd7f3877 |
| institution | Directory Open Access Journal |
| issn | 2666-9536 |
| language | English |
| last_indexed | 2024-04-24T11:21:28Z |
| publishDate | 2024-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Blockchain: Research and Applications |
| spelling | doaj.art-727cf453dc0e4b66b6f01aaefd7f38772024-04-11T04:41:09ZengElsevierBlockchain: Research and Applications2666-95362024-03-0151100170Decentralized Proof-of-Burn auction for secure cryptocurrency upgradeMariia Rodinko0Roman Oliynykov1Andrii Nastenko2IOG, 4 Battery Road, 049908, Singapore; V. N. Karazin Kharkiv National University, 4 Svobody Sq., Kharkiv, 61022, Ukraine; Corresponding author. V. N. Karazin Kharkiv National University, 4 Svobody Sq., Kharkiv, 61022, Ukraine.IOG, 4 Battery Road, 049908, Singapore; V. N. Karazin Kharkiv National University, 4 Svobody Sq., Kharkiv, 61022, UkraineIOG, 4 Battery Road, 049908, SingaporeWe propose a new approach for a secure, decentralized, and censorless upgrade of existing cryptocurrencies to newly created tokens without interaction with any external information sources (oracles). The proposed scheme is based on the burning of existing cryptocurrency tokens and implemented via the multi-currency auction. The auction is carried out on the blockchain of the new token and implemented using a smart contract that processes participants' bids of burnt tokens of other cryptocurrencies and supports a new token price discovery algorithm for each cryptocurrency with no oracles or any other trusted source of information. Contrary to traditional ways of getting the new asset, like centralized and decentralized exchanges, our method requires no user registration (as well as no KYC — “know your customer” procedure that requires obligatory client identification) and provides a predicted supply level of the new asset for an adequate price within a model with economically rational participants. We provide the results of decentralized auction simulations implemented for several strategies of user behavior (based on bid prices with normal and log-normal distribution laws), both under the normal operation and in the presence of an adversary who follows specific strategies.http://www.sciencedirect.com/science/article/pii/S2096720923000453Proof-of-BurnBlockchainCryptocurrencyAuctionToken |
| spellingShingle | Mariia Rodinko Roman Oliynykov Andrii Nastenko Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade Blockchain: Research and Applications Proof-of-Burn Blockchain Cryptocurrency Auction Token |
| title | Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade |
| title_full | Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade |
| title_fullStr | Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade |
| title_full_unstemmed | Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade |
| title_short | Decentralized Proof-of-Burn auction for secure cryptocurrency upgrade |
| title_sort | decentralized proof of burn auction for secure cryptocurrency upgrade |
| topic | Proof-of-Burn Blockchain Cryptocurrency Auction Token |
| url | http://www.sciencedirect.com/science/article/pii/S2096720923000453 |
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