Trustless and Bias-resistant Game-theoretic Distributed Randomness

Proof-of-Stake blockchain protocols rely on a dis-tributed random beacon to select the next miner that is allowed to add a block to the chain. Each party's likelihood to be selected is in proportion to their stake in the cryptocurrency. Current random beacons used in PoS protocols have two fundamental limitations: either (i) they rely on pseudo-randomness, e.g. assuming that the output of a hash function is uniform, which is an unproven assumption, or (ii) they generate their randomness using a distributed protocol in which several participants are required to submit random numbers which are then used in the generation of a final random result. However, in this case, there is no guarantee that the numbers provided by the parties are truly random and there is no incentive for the parties to honestly generate uniform randomness. In this work, we provide a protocol that generates trustless and unbiased randomness for PoS and overcomes the above limitations. We provide a game-theoretic guarantee showing that it is in everyone's best interest to submit truly uniform random numbers. Hence, our approach is the first to provably incentivize honest and reliable behavior instead of simply assuming it.