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NEST Oracle Machine encounters Mining Pool rejection packaging attack, DeFi security is threatened
Analysis of Mining Pool Refusal to Package Attacks Facing NEST Oracle Machine
The NEST distributed Oracle Machine aims to enhance the reliability of price data and the security of the system through extensive on-chain user participation. To address potential malicious quotes, NEST has designed a quote-eat-order verification mechanism that allows validators to trade based on quotes and propose corrections.
However, the effective operation of this mechanism relies on the timely appearance of order executions and new quote transactions in the blocks. With the emergence of Mining Pools, the transaction packaging rights are monopolized by a few large mining pools, which may result in certain transactions not being verified in a timely manner. In this case, the NEST Oracle Machine may output incorrect price data, creating arbitrage opportunities for some mining pools, thereby threatening the security of the DeFi ecosystem.
Attack Process Analysis
Attackers ( are usually large Mining Pools ) that first accumulate cryptocurrencies for arbitrage through methods such as flash loans. They then submit a quote to NEST that has a significant difference from the actual market price. During the verification period, it is normal for validators to propose an eat order transaction for correction.
At this time, all Mining Pools face two choices: whether to package the corrected transaction into the next block. This constitutes a multi-party complete information static game, and the final outcome depends on the returns of each party under different decision combinations.
Choosing a Mining Pool with a corrected quote can yield immediate profits a, but it can only be realized when a block is successfully mined. If you do not choose the correction, you can arbitrage after the quote is established, gaining higher profits b. The Mining Pool will make decisions based on its own hash power ratio and the relationship between a and b.
Summary
Mining Pools may delay or obstruct price updates from the NEST Oracle Machine for arbitrage due to their computational power advantage. This is not only an issue faced by NEST, but also a challenge for the entire decentralized concept of blockchain. How to address the problems brought by Mining Pools is an important topic in achieving true decentralization.