Abstract
Many aspects of blockchain-based decentralized finance can be understood as an extension of classical distributed computing. In this paper, we trace the evolution of two interrelated notions: failure and fault-tolerance. In classical distributed computing, a failure to complete a multi-party protocol is typically attributed to hardware malfunctions. A fault-tolerant protocol is one that responds to such failures by rolling the system back to an earlier consistent state. In the presence of Byzantine failures, a failure may be the result of an attack, and a fault-tolerant protocol is one that ensures that attackers will be punished and victims compensated. In modern decentralized finance however, failure to complete a protocol can be considered a legitimate option, not a transgression. A fault-tolerant protocol is one that ensures that the party offering the option cannot renege, and the party purchasing the option provides fair compensation (in the form of a fee) to the offering party. We sketch the evolution of such protocols, starting with two-phase commit, and finishing with timed hashlocked smart contracts.
Supported by NSF grant 1917990.
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Engel, D., Herlihy, M., Xue, Y. (2021). Failure is (literally) an Option: Atomic Commitment vs Optionality in Decentralized Finance. In: Johnen, C., Schiller, E.M., Schmid, S. (eds) Stabilization, Safety, and Security of Distributed Systems. SSS 2021. Lecture Notes in Computer Science(), vol 13046. Springer, Cham. https://doi.org/10.1007/978-3-030-91081-5_5
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