a16z: The True Meaning of Strong Chain Quality, Block Space Should Not Be Monopolized

Original Title: Beyond a core blockchain property: "Strong Chain Quality"

Original Authors: ittaia, PGarimidi, jneu_net, a16z

Original Compilation: AididiaoJP, Foresight News

Chain Quality (CQ) is a core property of blockchain. In simple terms, it means:

If you hold 3% of the staked equity, then on average, you can control 3% of the block space.

For early blockchains with lower throughput, chain quality is sufficient. However, modern blockchains have much greater bandwidth, allowing a single block to contain a large number of transactions.

This leads to a stronger and more refined concept. It not only focuses on the average block space ratio over time but also looks at the allocation of block space within each block. We call this "Strong Chain Quality" (SCQ):

If you hold 3% of the staked equity, then in each block, you can control 3% of the block space.

Essentially, this property allows stakeholders to have "virtual lanes" within a high-throughput blockchain, ensuring that their transactions can be included.

"Chain Quality" in Blockchain

One of Bitcoin's key innovations—now present in almost every blockchain—is the introduction of a reward mechanism for block proposers within the protocol: the party that successfully appends a block to the state machine can earn newly minted tokens and transaction fees. These rewards are specified by the state transition function and ultimately reflected in the system state.

In traditional distributed computing models, participants are divided into honest and malicious parties. There is no need to reward honest parties because honest behavior is the default assumption in the model.

In contrast, in cryptoeconomic models, participants are viewed as rational actors whose utility functions may be unknown. The goal is to design incentives that align these participants with the successful operation of the protocol while pursuing their own profit maximization. Combining the internal reward mechanism of the protocol, we can derive the following idealized definition of chain quality:

Chain Quality (CQ): An alliance holding X% of the total staked equity has an X% probability of becoming the proposer of each block entering the chain after the Global Stabilization Time (GST).

If a chain deviates from the requirements of chain quality, it may allow certain alliances to gain a reward share exceeding the normal proportion, thereby weakening the incentive for honest behavior and threatening the security of the protocol.

Many blockchains meet or strive to meet this property through a "staking-weighted random leader rotation mechanism."

Typical challenges currently faced include: Bitcoin's "selfish mining" problem; Monad's tail fork resistance issue; and issues within Ethereum's LMD GHOST protocol.

The Origin of "Strong Chain Quality"

When block space is sufficiently abundant, we do not need to entrust the entire content of a block to a single proposer. Instead, the block space of the same block can be jointly allocated by multiple participants. The cryptoeconomic definition of strong chain quality expresses this idea:

Strong Chain Quality (SCQ): An alliance holding X% of the total staked equity can control X% of the block space in each block after the Global Stabilization Time (GST).

This idealized property implicitly introduces the abstract concept of "virtual lanes." In other words, alliances can actually control a certain proportion of dedicated block space in each block.

From an economic perspective, having a virtual lane is equivalent to holding a productive asset that can generate income, which may come from transaction fees or MEV (Maximum Extractable Value). External entities will compete around staked equity to acquire and maintain these lanes, creating sustained demand for the underlying L1 tokens. The greater the economic value a lane can generate, the stronger the motivation for parties to compete for staked equity, and the higher the value that L1 staked equity can accumulate from controlling access to this block space. Through this abstraction, we can translate stronger censorship resistance into the effective property of SCQ within the protocol.

Strong Chain Quality and Censorship Resistance

Recent research indicates that censorship-resistant protocols are very important. Such protocols must not only ensure that the inputs of honest parties are eventually included but also guarantee that they can be included immediately. Strong Chain Quality (SCQ) can be seen as an extension of this property in the context of limited block capacity.

In practical scenarios, if the volume of transactions to be included exceeds the available block space, then no protocol can satisfy ideal censorship resistance. SCQ addresses this limitation with a more pragmatic approach: it does not require that all honest transactions are always included, but rather allocates a "budget" for each staking node to ensure that its transactions can be included within this budget.

The MCP protocol is proposed as a component on top of existing Practical Byzantine Fault Tolerance (PBFT) consensus protocols, aiming to provide these protocols with censorship resistance. This protocol also satisfies the requirements of SCQ—it allocates corresponding block space to proposers based on the proportion of staked equity. Existing DAG-based BFT protocols provide a way to implement multi-writer memory pools and also possess a certain degree of censorship resistance.

The standard implementations of these protocols often fail to strictly meet SCQ because they allow leaders to selectively delay certain subsets of transactions. However, with slight modifications to these protocols, it may be possible to re-implement SCQ. One related direction is "mandatory transaction inclusion," aimed at reducing censorship behavior.

MCP also demonstrates how to achieve a stronger hiding property. With this property, stakeholders can create virtual private lanes, the contents of which will only be revealed when the entire block is publicly disclosed. We will elaborate on this point in subsequent articles.

How to Achieve Strong Chain Quality

To achieve strong chain quality after the Global Stabilization Time (GST), the key is to ensure that proposers cannot arbitrarily censor the inputs of stakeholders. This can be accomplished through a two-round protocol. Based on almost all view-based BFT protocols, only two small modifications are needed:

First Round: Each participant sends their authenticated input to all other participants.

Second Round: Each participant, if they receive authenticated input from participant i, adds i to their inclusion list. Subsequently, that participant sends their inclusion list to the leader. This operation effectively commits them to only accept blocks that include all inputs from that list.

BFT Proposal: After receiving these messages, the leader includes the union of all received inclusion lists in the block.

BFT Voting: A participant will only vote in favor if a block includes all inputs from their own inclusion list.

It is evident that according to this protocol sketch, a complete protocol can be constructed. This protocol can satisfy strong chain quality after the Global Stabilization Time (GST), provide censorship resistance, and maintain liveness when the leader is an honest party. To achieve SCQ before GST, it is also necessary to wait for a sufficient number (quorum) of values or lists in each round. We will detail this protocol and its extended forms in subsequent articles.

Recent research indicates that achieving strong chain quality and censorship resistance requires adding two additional rounds on top of the voting rounds of conventional BFT protocols (as shown in the protocol sketch above). We will also elaborate on this result in subsequent articles.

While Strong Chain Quality (SCQ) specifies the proportion of block space that an alliance can control, it does not fully constrain the ordering of transactions within the block. SCQ can be understood as reserving space for each staking node but does not guarantee the order of transactions within that space.

This opens up rich research opportunities for the design of transaction ordering mechanisms. A good ordering mechanism is expected to further enhance fairness and efficiency within the blockchain ecosystem. One promising direction is to order transactions based on priority fees.