Problem Description
One important dimensions that separates mechanisms that allocate block proposing rights, is the temporal one. The technical challenge of implementing mechanisms in distributed systems is increased when low latency is a requirement. Hence, one may be tempted to allocate the role of block proposing far in advance of the time the block needs to be proposed. Another motivation for mechanisms that do this, is that predetermined proposing right ownership allows for earlier resale (i.e. “preconfirming” transactions in a block).
However, changing the temporal structure of a mechanism can impact the information available to agents participating in the mechanism, thereby affecting outcomes. Market concentration and revenue may change as a consequence. Can we characterise the tradeoffs involved?
In this post, we lay out some thoughts on the topic.
Future work
- Can we come up with models (analytical or simulation) that model these effects more precisely?̉̉̉̉̉
- Can we find settings in which these effects can be studied analytically?
