Remote Staking with Optimal Economic Safety (2408.01896v4)

Abstract: The idea of security sharing traces back to Nakamoto's introduction of merge mining, a technique that enables Bitcoin miners to reuse their hash power to bootstrap and secure other Proof-of-Work (PoW) blockchains. However, with the rise of Proof-of-Stake (PoS) chains (where merge mining is inapplicable) there is a need for new methods of Bitcoin security sharing. In this paper, we introduce remote staking as a technique that allows Bitcoin holders to use their idle assets to secure PoS chains. Our remote staking protocol achieves optimal economic safety: in the event of a safety violation on the PoS chain, at least one-third of the Bitcoin stake securing the chain is slashed. We make two key technical contributions to enable this: 1) A cryptographic protocol that enables slashing of Bitcoin stake despite the absence of smart contracts on Bitcoin; 2) A secure unbonding mechanism that guarantees slashing can occur before the stake is withdrawn from Bitcoin if a safety violation occurs on the PoS chain. Our design is entirely modular and can be integrated with any PoS chain as the security consumer and any chain (including Bitcoin) as the security provider. A version of this protocol was deployed to mainnet in August 2024 and has since accumulated over 4.1 billion USD worth of staked bitcoins.