LedgerHedger: Gas Reservation for Smart-Contract Security.

Smart-contract ledger platforms, like Ethereum, rate-limit their workload with incentives. Users issue orders, called transactions, with assigned fees, and system operators, called miners, confirm them and receive the fees. The combination of limited throughput and varying demand results in a volatile fee market, where underpaying transactions are not confirmed. However, the security of prominent smart contracts, securing billions of dollars, critically relies on their transactions being confirmed in specific, future time frames. Despite theoretical and practical active efforts, guaranteeing timely confirmation remained an open problem. We present LedgerHedger, a mechanism for assuring that a miner will confirm a user’s transaction in a target time frame. As the name implies, LedgerHedger employs hedging – the user pays for her transaction in advance and the miner commits to confirm it even if the required fee rises. But unlike regulated markets, there are no external enforcers, and miners unilaterally choose which transactions to confirm. Due to the amounts at stake, relying on miner altruism does not suffice. Therefore, LedgerHedger uses a combination of collateral deposits to incentivize correct behavior. The contract requires the issuer to deposit her payment and the miner to deposit a collateral. During the target time frame, the miner is incentivized to confirm the issuer’s transaction if it exists, but is also capable of withdrawing the payment and the collateral if not. LedgerHedger gives rise to a game, where the parties can only take specific actions. For a wide range of parameter values there is a subgame perfect equilibrium where both parties act as desired. We implement LedgerHedger and deploy it on an Ethereum test network, showing its efficacy and minor overhead.