FairDAG: Consensus Fairness over Multi-Proposer Causal Design

The rise of cryptocurrencies like Bitcoin and Ethereum has driven interest in blockchain database technology, with smart contracts enabling the growth of decentralized finance (DeFi). However, research has shown that adversaries exploit transaction ordering to extract profits through attacks like front-running, sandwich attacks, and liquidation manipulation. This issue affects blockchains where block proposers have full control over transaction ordering. To address this, a more fair transaction ordering mechanism is essential. Existing fairness protocols, such as Pompe and Themis, operate on leader-based consensus protocols, which not only suffer from low throughput caused by the single-leader bottleneck, but also allow adversarial block proposers to manipulate transaction ordering. To address these limitations, we propose a new framework, FairDAG, that runs fairness protocols on top of DAG-based consensus protocols. FairDAG improves protocol performance in both throughput and fairness quality by leveraging the multi-proposer design and validity property of DAG-based consensus protocols. We conducted a comprehensive analytical and experimental evaluation of two FairDAG variants - FairDAG-AB and FairDAG-RL. Our results demonstrate that FairDAG outperforms prior fairness protocols in both throughput and fairness quality.