FairDAG: Consensus Fairness over Concurrent Causal Design

Abstract: The rise of cryptocurrencies like Bitcoin and Ethereum has driven interest in blockchain technology, with Ethereum's smart contracts enabling the growth of decentralized finance (DeFi). However, research has shown that adversaries exploit transaction ordering to extract profits through attacks like front-running, sandwich attacks, and liquidation manipulation. This issue affects both permissionless and permissioned blockchains, as block proposers have full control over transaction ordering. To address this, a more fair approach to transaction ordering is essential. Existing fairness protocols, such as Pompe and Themis, operate on leader-based consensus protocols, which not only suffer from low throughput but also allow adversaries to manipulate transaction ordering. To address these limitations, we propose FairDAG-AB and FairDAG-RL, which leverage DAG-based consensus protocols. We theoretically demonstrate that FairDAG protocols not only uphold fairness guarantees, as previous fairness protocols do, but also achieve higher throughput and greater resilience to adversarial ordering manipulation. Our deployment and evaluation on CloudLab further validate these claims.