Searching for Optimal Strategies in Proof-of-Stake Mining Games with Access to External Randomness

Abstract

In light of the massive energy consumption due to proof-of-work cryptocurrency mining protocols, more environmentally-friendly proof-of-stake mining protocols are becoming increasingly desirable. However, to sustain a healthy mining ecosystem, a mining protocol must be fairly robust against strategic manipulation. This paper continues work by Ferreira and Weinberg (2021) to determine the feasibility of strategic manipulation under a proof-of-stake mining protocol with access to external randomness. Previously, Ferreira and Weinberg showed that strategic manipulation is always possible when some miner owns more than 32.47% of the stake but never possible when every miner owns less than 30.80% of the stake. Here, we are able to improve both bounds in showing that strategic manipulation is always possible when some miner owns more than 32.35% of the stake but never possible when every miner owns less than 31.89% of the stake.