Discussion: Addressing MEV Resistance in Stacks and the Risks of Empty Block Attacks

[joeypark-dev]

Introduction

The recent improvements in Stacks' MEV mitigation strategies, particularly through Assumed Total Commitment (ATC), are steps in the right direction. However, despite these efforts, there remains a critical gap in the protection against targeted Sybil-based mining attacks, which exploit the low cost of writing the next part of the decentralized ledger.

This discussion aims to highlight how an attacker with hacked funds can still execute an empty or spam block attack, leveraging the inefficiencies in the current Nakamoto-based sortition mechanism. If Stacks is to evolve into a dominant, permissionless Bitcoin L2 suitable for instant payments and widespread institutional adoption, robust protection against such attacks must be in place.

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Problem Statement

Currently, an attacker can exploit several weaknesses in the mining process to execute a denial-of-service (DoS) attack by creating empty or spam blocks while simultaneously shorting STX on exchanges to launder money.

The primary concerns are:

1. Attack Funding from Hacked Funds

• Unlike a rational miner who seeks profitability, an attacker using stolen funds has little concern about mining losses.

• The attacker can commit BTC at an aggressive rate to manipulate the mining process and execute the attack.

2. Minimal Effectiveness of ATC Due to Sybil Attacks

• By spinning up multiple fake mining nodes, an attacker can build up a reputation to meet the assumed commitment threshold.

• Even if honest miners react and set up their own nodes, they require approximately 10 Bitcoin blocks to establish reputation, providing ample time for an attack to succeed and disrupt the market.

3. Guaranteed Chain Halt for a Bitcoin Block if the Attacker Wins Sortition

• Since the tenure only changes when the next Bitcoin block is mined, if an attacker is selected, they can ensure that no transactions are included for the duration of that Bitcoin block.

• The result is a short-term but highly effective attack window that causes network disruption and volatility.

• Even if just a few malicious miners succeed in doing so, this will cause "broken windows theory", which suggests that visible signs of disorder can lead to more disorder and crime afterwards.

4. Laundering Through STX Shorting

• The attacker does not need direct profits from mining; their goal is to create market instability.

• By shorting STX, they can profit from the price collapse caused by the chain halt, effectively laundering illicit funds in the process.

Implications for Stacks as a Bitcoin L2

Stacks aspires to be a global, decentralized, and permissionless layer for Bitcoin, enabling fast transactions and broader adoption. However, the current mining incentives allow attackers to execute a relatively low-cost DoS attack, undermining Stacks' reliability. To gain adoption from financial institutions, enterprises, and users seeking a robust L2 solution, stronger guarantees against such attacks are necessary.

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Final Thoughts

While the current MEV mitigation strategies address some concerns, they do not fully resolve the vulnerability where an attacker can execute a chain halt at low cost while leveraging market shorts to profit. Given that Stacks aims to serve as a resilient Bitcoin L2, it is crucial to explore additional solutions that ensure the cost of disrupting the ledger remains prohibitively high.

I am not an experienced developer, just a novice learner who is concerned about the long-term security of the network. If the community acknowledges this as an issue, I am willing to contribute to a new SIP addressing this problem. I look forward to hearing thoughts from the broader community on this matter.