Blockchain Transaction Ordering With Bid-Sorted Sentry Nodes
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Solution Overview
Problem
Existing Layer-2 blockchain solutions suffer from latency issues, transaction spam, lack of revenue for validators, and an inefficient market for transaction submitters, leading to delays and inefficiencies in transaction processing.
Innovation Solution
Implementing a sentry node system that sorts transactions based on bid amounts and uses an auction smart contract to execute the highest-bidding transaction first, ensuring consistent propagation delays and eliminating incentives for spamming, while monetizing transaction priority through a validator vault system.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If transactions are propagated through the network using existing Layer-2 solutions, then transactions can be processed off the main blockchain, but latency issues arise leading to delays in transaction recording
Solution Approach 1:
The system performs preliminary sorting of transactions by bid amount at the sentry node before propagation. This preliminary action ensures that high-value transactions are prioritized in the propagation queue, allowing the highest-bidding transaction to reach validators first and be executed immediately, thus reducing recording delay for valuable transactions while maintaining overall processing speed.
2Device complexity
If transactions are propagated without priority ordering, then network simplicity is maintained, but transaction spam occurs and validators receive no revenue
Solution Approach 1:
The system changes the parameter of transaction ordering from FIFO (first-in-first-out) to priority-based ordering by bid amount. This parameter change introduces a sorting mechanism at the sentry node that reorders transactions based on their bid values, transforming the propagation behavior to prioritize high-value transactions and eliminate spam through economic incentives.
Solution Approach 2:
The sentry node acts as an intermediary between transaction submitters and validators. It receives transactions, sorts them by bid amount, and propagates them in priority order to validators. This intermediary function allows the system to maintain a simple validator structure while introducing sophisticated priority ordering and revenue mechanisms through the sentry node layer.
3Speed
If transactions are processed in arbitrary order, then processing speed is maximized, but arbitrage opportunities become inefficient and market fairness deteriorates
Solution Approach 1:
The system performs preliminary sorting of transactions by bid amount before execution. This preliminary ordering ensures that transactions are executed in a predictable, fair sequence based on willingness to pay, creating a reliable and fair arbitrage market while maintaining fast execution speeds through immediate processing of the highest-bidding transaction.
Data Source
AI summary
Systems and methods for managing transactions associated with a blockchain are provided. According to aspects, a blockchain scaling solution may include a sentry component configured to facilitate an auction during which transactions may be received. The sentry component may sort the transactions according to bid amount size and provide the sorted transactions to a validator component. Further, the validator component may invoke an auction smart contract that may execute the transaction that arrives first. The transaction may successfully complete if the corresponding bid amount is successfully transferred, where the validator component may be entitled to the corresponding bid amount.