Incentives in Ethereum's hybrid Casper protocol. Issue 5 (24th February 2020) - Buterin, Vitalik
Summary: We present an overview of hybrid Casper the Friendly Finality Gadget (FFG), a proof‐of‐stake checkpointing protocol overlaid onto Ethereum's proof‐of‐work blockchain. We describe its core functionalities and reward scheme and explore its properties. Our findings indicate that Casper's implemented incentives mechanism ensures liveness, while providing safety guarantees that improve over standard proof‐of‐work protocols. On the basis of a minimal impact implementation of the protocol as a smart contract on the blockchain, we discuss additional issues related to parametrization, funding, throughput, and network overhead and detect potential limitations. Abstract : Hybrid Casper the Friendly Finality Gadget (FFG) is a proof‐of‐stake checkpointing protocol overlaid onto Ethereum's proof‐of‐work blockchain. We describe its core functionalities and reward scheme. Our findings indicate that Casper's implemented incentives mechanism ensures liveness, while providing safety guarantees that improve over standard proof‐of‐work protocols. On the basis of a minimal‐impact implementation of the protocol as a smart contract on the blockchain, we discuss issues related to parametrization, funding, throughput, and network overhead.