License: Creative Commons Attribution 4.0 International license (CC BY 4.0)
When quoting this document, please refer to the following
DOI: 10.4230/LIPIcs.AFT.2023.23
URN: urn:nbn:de:0030-drops-192120
URL: http://dagstuhl.sunsite.rwth-aachen.de/volltexte/2023/19212/
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Mamageishvili, Akaki ; Kelkar, Mahimna ; Schlegel, Jan Christoph ; Felten, Edward W.

Buying Time: Latency Racing vs. Bidding for Transaction Ordering

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LIPIcs-AFT-2023-23.pdf (0.7 MB)

Abstract

We design TimeBoost: a practical transaction ordering policy for rollup sequencers that takes into account both transaction timestamps and bids; it works by creating a score from timestamps and bids, and orders transactions based on this score.
TimeBoost is transaction-data-independent (i.e., can work with encrypted transactions) and supports low transaction finalization times similar to a first-come first-serve (FCFS or pure-latency) ordering policy. At the same time, it avoids the inefficient latency competition created by an FCFS policy. It further satisfies useful economic properties of first-price auctions that come with a pure-bidding policy. We show through rigorous economic analyses how TimeBoost allows players to compete on arbitrage opportunities in a way that results in better guarantees compared to both pure-latency and pure-bidding approaches.

BibTeX - Entry

@InProceedings{mamageishvili_et_al:LIPIcs.AFT.2023.23,
  author =	{Mamageishvili, Akaki and Kelkar, Mahimna and Schlegel, Jan Christoph and Felten, Edward W.},
  title =	{{Buying Time: Latency Racing vs. Bidding for Transaction Ordering}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{23:1--23:22},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-303-4},
  ISSN =	{1868-8969},
  year =	{2023},
  volume =	{282},
  editor =	{Bonneau, Joseph and Weinberg, S. Matthew},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/opus/volltexte/2023/19212},
  URN =		{urn:nbn:de:0030-drops-192120},
  doi =		{10.4230/LIPIcs.AFT.2023.23},
  annote =	{Keywords: Transaction ordering, First-come-first-serve, First-price auctions}
}

Keywords: Transaction ordering, First-come-first-serve, First-price auctions
Collection: 5th Conference on Advances in Financial Technologies (AFT 2023)
Issue Date: 2023
Date of publication: 18.10.2023

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