A Solomonic Solution to Ownership Disputes: An Application to Blockchain Front-Running
20 Pages Posted: 21 Feb 2022 Last revised: 15 May 2023
Date Written: February 2022
Blockchain front-running involves multiple agents, other than the legitimate agent, claiming a payment from performing a contract. It arises because of the public nature of blockchain transactions and potential network congestion. This paper notes that disputes over payments are similar to classic ownership disputes (such as King Solomon's dilemma). We propose a simultaneous report mechanism that resolves Solomon's dilemma (using only ordinal preference information) and also eliminates blockchain front-running. In each case, the mechanism relies on threats to remove ownership from all claimants and preferences from the legitimate claimant over allocations to other agents.
Suggested Citation: Suggested Citation