Buying Time: Latency Racing vs. Bidding in Transaction Ordering

Akaki Mamageishvili, Mahimna Kelkar, Jan Christoph Schlegel and Edward W. Felten

Abstract: We design TimeBoost: a practical transaction ordering policy for rollup sequencers that takes into account both transaction timestamps and bids; it works by creating a score from timestamps and bids, and orders transactions based on this score. TimeBoost is transaction-data-independent (i.e., can work with encrypted transactions) and supports low transaction finalization times similar to a first-come first-serve (FCFS or pure-latency) ordering policy. At the same time, it avoids the inefficient latency competition created by an FCFS policy. It further satisfies useful economic properties of first-price auctions that come with a pure-bidding policy. We show through rigorous economic analyses how TimeBoost allows players to compete on arbitrage opportunities in a way that results in better guarantees compared to both pure-latency and pure-bidding approaches.

Date: 2023-06, Revised 2023-08
New Economics Papers: this item is included in nep-des, nep-gth and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://arxiv.org/pdf/2306.02179 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2306.02179

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().