Research Directions

The Research DAO stands at the intersection of three fields of Computer Science:

1. Cryptography. Cryptography concerns the design and analysis of protocols in the presence of adversaries. A strongly mathematical field, it touches upon both low-level primitives such as signatures, encryption schemes, and zero-knowledge proofs, as well as higher level protocols such as blockchains, consensus algorithms, and authenticated data structures.
2. Security. Security is the applied field that ensures systems are protected from attackers. Taking cryptography and deploying it to real-world infrastructure, secure systems are resilient to attack and verify this empirically through procedures such as Penetration Testing. They also check and ensure this via formal methods with hardened programming languages, protocols, and APIs.
3. Distributed Computing. Sometimes referred to as simply "decentralization," this field is about designing protocols in which multiple parties coordinate to achieve a common goal, such as reaching consensus, without trusting a central third party. Throughout its history, the field has explored Byzantine Agreement and other basic consensus algorithms. Today, it has been revived with the invention of the blockchain.

Blockchain Science stands between all three: we are developing new cryptography to make blockchain systems possible; we compose cryptographic primitives to build high-level secure systems; and we build them such that multiple parties can coordinate to achieve a common goal without a trusted third party. Naturally, other fields of computer science and mathematics come into play also, including privacy (with landmark conferences such as PETS), information theory, programming languages, networks, and game theory.

As a new field of Computer Science, Blockchain Science has many interesting and foundational outstanding problems. As a Research DAO, we will be pursuing solutions in the following areas:

1. Bootstrapping. This concerns the speed and efficiency with which wallets synchronize with the rest of the network. There has been significant advances in the last few years on the topic of fast synchronization in Proof-of-Stake blockchains, including the works on Non-Interactive Proofs of Proof-of-Work (NIPoPoWs) using superblocks, FlyClient, and logarithmic space mining. Open problems concern the security of NIPoPoWs in the variable difficulty setting, but also the development of Proof of Proof-of-Stake (PoPoS). A topic with significant theoretical depth as well as many practical applications, tackling this problem can yield exponential improvements in how long it takes to synchronize a mobile client. At the same time, it allows removing centrally trusted servers without harming performance. Developing proper "superlight clients" also allows for building trustless cross-chain bridges, without the need for trusted federations and overcollateralization.

2. Interoperability. The number of chains, coins, and protocols keeps growing. Ensuring that these can play well with one another has become a central problem in the space. It has become apparent that there will be no one coin to rule them all, but multiple coins working in tandem, each offering its own unique features. Developing an ecosystem of collaboration, in which different protocols can speak to each other and interact in a secure and performant manner, is both a scientific and an engineering challenge. Between main chains, communication must be done both between Proof-of-Work and Proof-of-Stake chains. Making use of bootstrapping techniques to build cross-chain clients, moving data from Layer 1 to Layer 2 and back quickly and securely, as well as communicating between the real world and the chain world using Oracles are central questions that fall under this topic.

3. On-chain scaling. The main chain functions as the settlement layer and all parties reference it for finality. Scaling this layer has become the current main challenge of our science. There are several means by which scaling can be achieved. With Sharding, a blockchain is split into multiple subsystems, each with its own validators. Ensuring the validators are allocated in a secure manner even against an adaptive adversary is difficult. Another means is developing authenticated data structures that go beyond the concept of simple chains. From parallel chains that cross-reference each other, to DAG-based systems; such topologically exotic consensus systems seem promising.

4. Off-chain scaling. Scaling a blockchain's Layer 1 infrastructure can only get us so far. For achieving the desired scalability of a global monetary and contract system, most transactions will have to be moved off the main chain. There are many candidate approaches here. Sidechains and interoperability between them would allow the creation of smaller chains that can take off some of the load. Payment and state channels can allow the off chain transaction of smaller groups of people, but also develop more globally as payment and channel networks are built on top. Lastly, rollups of the Optimistic and ZK kind have seen significant adoption in the last year, and are prominent candidates for scaling data off the chain.

5. Consensus. The foundation of chain protocols is always an appropriate consensus mechanism. We have consensus protocols employing Proof-of-Work and Proof-of-Stake, and many have been proven to be secure. Can these protocols be optimized from first principles to achieve better performance without harming security? Questions such as increasing block sizes and block production rate, or changing the longest chain rule, temporary dishonest majority, as well as applying concepts from Information Theory pertain to this area. The analysis and consolidation of existing consensus protocols, from the era of byzantine agreement to today's complex decentralized consensus protocols, also falls into this category. Lastly, it also pertains to the development of theoretical tools to aid the understanding and education around consensus.

6. Formal verification. Developing new protocols is only one aspect of ensuring they are secure. In addition to the mathematical tools in the arsenal of cryptography, tools from the area of formal verification can be used to ensure that both mathematical proofs are correct, through the use of a proof checker, but also that the software implementations of such protocols really follow the protocol as intended. Very closely tied to these concepts is the development of secure programming languages for smart contracts that lend themselves to such tools.

7. DeFi. The smart contract ecosystem is evolving to replicate all of traditional finance, and beyond. Many concepts that are already possible in Decentralized Finance (DeFi), such as flash loans and perpetuals, are new and have never appeared before in traditional finance. Other financial derivatives such as options and futures as well as useful instruments such as insurance, payroll, and loans are being developed too. This new field raises a plethora of open questions about security, from contract composition, to oracles and miner extractable value. Another question pertains to the fair governance of all these protocols – starting with our own DAO. Lastly, the proper deployment and upgrade of these contracts and the underlying blockchain to support new versions remains a central problem.

8. Networking. Blockchain consensus typically models the network as a simplistic machine. However, the devil is in the details. Burning questions, such as achieving order fairness, with the involvement or not of a central trusted party, are becoming increasingly important. Tradeoffs between performance and security, reducing latency, and taking full advantage of the available bandwidth are central here. A powerful adversary may also be able to disrupt the network, and protections against splits remain a central question. But given a more lax adversary, better efficiency may be possible. Electing temporary leading parties can also help.

9. Economics. Consensus protocols can work under honest assumptions, but how are they incentivized? In particular, is each participant's financial gain aligned with the consensus protocol's properties and goals? This touches on the field of game theory, with many questions remaining open. The topics pertain to pool formation, delegation of participating rights, sybil resilience, and resilience against malicious coalitions. In the midst of all this comes the topic of building and governing a transparent macroeconomic policy, upgrading it, and controlling money supply without a central bank. Lastly, difficult questions, such as egalitarianism and fair allocation of rewards, arise also, some of them with more philosophical and ethical ramifications than we initially imagined.

10. Privacy. Blockchains are the first practical application of zero-knowledge proofs, a much loved if not idolized concept in cryptography. The ability to perform private transactions that enable untraceability and unlinkability is one aspect. The ability to have fully private smart contracts and smart contract state, whether on Layer 1 or on Layer 2, is a much more difficult goal. New blockchain-centric primitives that enable zero-knowledge creation of stake and signatures are central to these systems.

11. Usable security. Even if we build the perfect systems technically, in the end, our users are humans. The current state of affairs in blockchain systems is disconcerning: most truly decentralized wallets and other end-user software are barely usable. To make matters worse, the inherent irreversibility of blockchain systems all but ensures that small mistakes might have devastating consequences on the users' accounts. The topic of usable security concerns the human-computer interaction in blockchain systems, helping users understand what is going on at every point in time. Having easy-to-use wallets, social wallets that cannot be lost or stolen easily, multi-factor authentication, reasonable spending limits, and easy hardware wallets are key questions here.

12. Community. While systems are designed with decentralization in mind, this is often not achieved in practice. To ensure proper decentralization, concrete metrics must be proposed, relevant measures must be taken, and experiments must be conducted. Usage metrics on staking, mining, network, and node decentralization allow us to collect such statistics to gauge whether decentralization has been achieved and, if not, seek ways to rectify.

13. Transparency. New institutions are replacing old ones as decentralized finance is taking shape. Blockchain systems and DAOs must be governed for the people by the people. Centralized organizations such as exchanges must also be held accountable, while maintaining privacy. To ensure these, regulatory transparency must be ensured by developing privacy-preserving proofs of assets, liabilities, and solvency, as well as off-chain transaction auditing. The tools to do that securely and privately are an important research topic.

These thirteen areas of research in Blockchain Science will be central for the next few years. The Research DAO plans to fund, support, and steer the direction, so that the foundational problems in all of these areas are tackled with academic rigour and an eye for application.