Modelling Economical Attacks In Distributed P2P Segregated Markets, A Stability And Reliability Approach

Abstract

In the last 20 years, the technological maturity of online payment systems, the widespread adoption of the WEB and advances in distributed systems and cryptology protocols are generating a new range of exchange opportunities, with related novel market models and properties. This has translated in the design and implementation of segregated p2p exchanges, where the supply of liquidity is driven by consensus and governance algorithms driven by distributes systems protocols. Within that context, this work focus on the taxonomy and modelling of adversarial situation in which a subset of the p2p actors instantiate “ economical attacks” that attempt at undermining the liquidity of the system. In order to do so we develop a mathematical framework uses distributions and multipliers to analyse the links between markets stability (defined in terms of inflation) and reliability.