Lioba Heimbach is a PhD candidate at ETH Zurich in the Distributed Computing group under the supervision of Roger Wattenhofer. Her research focuses on blockchain protocols, with a particular emphasis on decentralized finance (DeFi). She aims to enhance the accessibility, resilience, fairness, and efficiency of DeFi and the blockchain ecosystem. To achieve this, she conducts measurement studies and analytical evaluations to understand participant behavior, analyze protocol dynamics, and identify vulnerabilities and inefficiencies. Building on these insights, she designs and proposes new protocols to address key challenges and strengthen the ecosystem.

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AG Audience

English

60 Minutes

Kaiserslautern

The multi-layer blockchain architecture presents unique challenges, as issues in one layer can amplify or cause problems in another. These layers include the network layer, a peer-to-peer (P2P) network responsible for information dissemination; the consensus layer, where nodes reach agreement on the blockchain’s state; and the application layer, which hosts decentralized finance (DeFi) applications. My research investigates the interactions between these layers and the resulting challenges, with the goal of enhancing fairness and resilience in the blockchain ecosystem. In the first part of this talk, I will explore how financial value originating at the application layer can threaten the consensus layer, focusing on non-atomic arbitrage — arbitrage between on-chain and off-chain exchanges. I will demonstrate how this value, despite originating at the application layer, introduces centralizing forces and security vulnerabilities in the consensus layer. In the second part, I will show how these dynamics operate in the opposite direction. Specifically, I will highlight privacy flaws in Ethereum’s P2P network that threaten the consensus layer by enabling attacks targeting application layer value. As I will demonstrate, the P2P network leaks validator locations. This vulnerability allows malicious validators (i.e., consensus layer participants) to launch targeted attacks on validators handling blocks with significant application layer value and scoop the value from those blocks.

Kateryna Panfilova

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