Author: Chris Belcher 2019-08-05 19:04:26
Published on: 2019-08-05T19:04:26+00:00
In a discussion about the fidelity bond scheme, Chris Belcher corrected himself and said that running a maker under the proposal doesn't require a sacrifice of value; it actually makes money. However, being a sybil attacker does come at a cost as dishonest makers would earn less than honest ones. This is due to the quadratic V^2 term in the fidelity bond value calculation, which incentivizes entities to run just one honest maker bot instead of multiple bots. The V^2 term also creates a bad incentive for people to pool their bitcoin hoard into one maker bot to earn higher fee income, which can be done by renting out TXOs signatures. To make this difficult or impossible, fidelity bonds made of rented TXOs can be capped at a certain number or require bond signature proofs to involve the one-time taker identifier, making privkeys to be online in hot wallets.
Updated on: 2023-06-13T20:24:57.613500+00:00