Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-26T23:45:07.140Z Has data issue: false hasContentIssue false

5 - The Smart Contract Ecosystem

from Part II - Technological Underpinnings of Web3

Published online by Cambridge University Press:  21 November 2024

Ken Huang ,
Youwei Yang ,
Fan Zhang ,
Xi Chen  and
Feng Zhu
Ken Huang
Affiliation:
DistributedApps.ai
Youwei Yang
Affiliation:
Bit Mining Limited
Fan Zhang
Affiliation:
Yale University, Connecticut
Xi Chen
Affiliation:
New York University
Feng Zhu
Affiliation:
Harvard Business School
Get access

Summary

Chapter 5 explores the interconnected ecosystem enabling feature-rich smart contracts. It first covers oracles, which provide external data to blockchains, outlining use cases, design considerations, and business decisions around oracle solutions. It then discusses interoperability, explaining atomic swaps and various cross-chain bridge designs such as lock/mint, liquidity pools, and zkBridge for trustless transfers. Next, it examines the ecosystem for mitigating Miner Extractable Value (MEV), categorizing solutions into auctions, time/content-based ordering, and application-specific designs. It also highlights other vital components such as user-friendly wallets, performant RPC nodes, governance mechanisms for collective decision-making, and privacy-preserving techniques such as zero-knowledge proofs. By delving into these key building blocks, this chapter offers readers a comprehensive understanding of the dynamic smart contract ecosystem. It emphasizes how components such as oracles, bridges, MEV mitigation, governance, and privacy-preservation enable richer functionality, interoperability, fairness, and user experience, shaping decentralized applications’ future.

Type
Chapter
Information
Web3
Blockchain, the New Economy, and the Self-Sovereign Internet
 , pp. 121 - 142
Publisher: Cambridge University Press
Print publication year: 2024

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Breidenbach, Lorenz, Cachin, Christian, Coventry, Alex, Ellis, Steve, Juels, Ari, Miller, Andrew, Magauran, Brendan, et al. 2021. “Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks,” April. https://research.chain.link/whitepaper-v2.pdfGoogle Scholar
Budish, Eric, Cramton, Peter, and Shim, John. 2015. “The High Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response.” The Quarterly Journal of Economics 130 (4): 1547–1621.CrossRefGoogle Scholar
Cachin, Christian, Mićić, Jovana, Steinhauer, Nathalie, and Zanolini, Luca. 2022. “Quick Order Fairness.” In International Conference on Financial Cryptography and Data Security, 316–333. Springer.CrossRefGoogle Scholar
Cheng, Raymond, Zhang, Fan, Kos, Jernej, He, Warren, Hynes, Nicholas, Johnson, Noah, Juels, Ari, Miller, Andrew, and Song, Dawn. 2019. “Ekiden: A Platform for Confidentiality Preserving, Trustworthy, and Performant Smart Contracts.” In 2019 IEEE European Symposium on Security and Privacy (EuroS&P), 185–200. https://doi.org/10.1109/EuroSP.2019.00023.CrossRefGoogle Scholar
Daian, Philip, Goldfeder, Steven, Kell, Tyler, Li, Yunqi, Zhao, Xueyuan, Bentov, Iddo, Breidenbach, Lorenz, and Juels, Ari. 2020. “Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability.” In 2020 IEEE Symposium on Security and Privacy (SP), 910–927. https://doi.org/10.1109/SP40000.2020.00040.CrossRefGoogle Scholar
Eskandari, Shayan, Salehi, Mehdi, Catherine Gu, Wanyun, and Clark, Jeremy. 2021. “SoK: Oracles from the Ground Truth to Market Manipulation.” In Proceedings of the 3rd ACM Conference on Advances in Financial Technologies, 127–141. AFT’21. New York, NY, USA: Association for Computing Machinery. https://doi.org/10.1145/3479722.3480994.CrossRefGoogle Scholar
Kelkar, Mahimna, Deb, Soubhik, Long, Sishan, Juels, Ari, and Kannan, Sreeram. 2021. “Themis: Fast, Strong Order Fairness in Byzantine Consensus.” Cryptology EPrint Archive.Google Scholar
Kelkar, Mahimna, Zhang, Fan, Goldfeder, Steven, and Juels, Ari. 2020. “Order Fairness for Byzantine Consensus.” In Advances in Cryptology – CRYPTO 2020, edited by Daniele Micciancio and Thomas Ristenpart, 12172:451–480. Lecture Notes in Computer Science. Cham: Springer International Publishing. https://doi.org/10.1007/9783030568771_16.CrossRefGoogle Scholar
Kosba, Ahmed, Miller, Andrew, Shi, Elaine, Wen, Zikai, and Papamanthou, Charalampos. 2016. “Hawk: The Blockchain Model of Cryptography and Privacy Preserving Smart Contracts.” In 2016 IEEE Symposium on Security and Privacy (SP), 839–858. https://doi.org/10.1109/SP.2016.55.CrossRefGoogle Scholar
Kursawe, Klaus. 2020. “Wendy, the Good Little Fairness Widget: Achieving Order Fairness for Blockchains.” In Proceedings of the 2nd ACM Conference on Advances in Financial Technologies, 25–36.Google Scholar
Redman, Jamie. 2022. “Axie Infinity Loses $620 Million After Hacker Compromised Ronin Validators – Bitcoin News.” https://news.bitcoin.com/axie-infinity-loses-620-million-after-hacker-compromised-ronin-validators/.Google Scholar
Xie, Tiancheng, Zhang, Jiaheng, Cheng, Zerui, Zhang, Fan, Zhang, Yupeng, Jia, Yongzheng, Boneh, Dan, and Song, Dawn. 2022. “ZkBridge: Trustless Cross Chain Bridges Made Practical.” In Proceedings of the 2022 ACM SIGSAC Conference on Computer and Communications Security, 3003–3017. CCS’22. New York, NY, USA: Association for Computing Machinery. https://doi.org/10.1145/3548606.3560652.CrossRefGoogle Scholar
Yang, Sen, Zhang, Fan, Huang, Ken, Chen, Xi, Yang, Youwei, and Zhu, Feng. 2022. “SoK: MEV Countermeasures: Theory and Practice.” arXiv. https://doi.org/10.48550/arXiv.2212.05111.CrossRefGoogle Scholar
Zhang, Fan, Cecchetti, Ethan, Croman, Kyle, Juels, Ari, and Shi, Elaine. 2016. “Town Crier: An Authenticated Data Feed for Smart Contracts.” In Proceedings of the 2016 ACM SIGSAC Conference on Computer and Communications Security, 270–82. CCS’16. New York, NY, USA: Association for Computing Machinery. https://doi.org/10.1145/2976749.2978326.CrossRefGoogle Scholar
Zhang, Fan, Maram, Deepak, Malvai, Harjasleen, Goldfeder, Steven, and Juels, Ari. 2020. “DECO: Liberating Web Data Using Decentralized Oracles for TLS.” In Proceedings of the 2020 ACM SIGSAC Conference on Computer and Communications Security, 1919–1938. CCS’20. New York, NY, USA: Association for Computing Machinery. https://doi.org/10.1145/3372297.3417239.CrossRefGoogle Scholar
Zhang, Yunhao, Setty, Srinath, Chen, Qi, Zhou, Lidong, and Alvisi, Lorenzo. 2020. “Byzantine Ordered Consensus without Byzantine Oligarchy.” In 14th USENIX Symposium on Operating Systems Design and Implementation (OSDI 20), 633–649.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×