What is it about?
Cryptocurrencies like Bitcoin and Ethereum rely on users called miners to create blocks at some predefined average rate. We show that platforms that operate on top of cryptocurrencies actually provide monetary incentives which can lead miners to misbehave and create blocks at higher and lower rates. For example, Decentralized Finance (DeFi) platforms let users perform financial operations such as borrowing and giving out loans, but inadvertently provide such an incentive to miners due to the interest which they offer on deposits.
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Why is it important?
Ethereum and DeFi platforms which operate on top of it are immensely popular, with the latter holding a combined amount of billions of dollars. We show that although such platforms rely on the underlying cryptocurrency, they can actually destabilize it.
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This page is a summary of: Blockchain Stretching & Squeezing: Manipulating Time for Your Best Interest, July 2022, ACM (Association for Computing Machinery), DOI: 10.1145/3490486.3538250.
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