A mechanism design overview of Sedna

Abstract

Sedna is a coded multi-proposer consensus protocol in which a sender shards a transaction payload into rateless symbols and disseminates them across parallel proposer lanes, providing high throughput and ``until decode'' privacy. This paper studies a sharp incentive failure in such systems. A cartel of lane proposers can withhold the bundles addressed to its lanes, slowing the chain's symbol accumulation while privately pooling the missing symbols. Because finalized symbols become public, the cartel's multi-slot information lead is governed by a chain level delay event where the chain fails to accumulate the $κ$ bundles needed for decoding by the honest horizon $t^\star=\lceil κ/m\rceil$. We characterize the resulting delay probability with KL-type large deviation bounds and show a knife edge pathology when the slack $Δ=t^\star m-κ$ is zero such that withholding a single bundle suffices to push inclusion into the next slot with high probability. We propose \textsf{PIVOT-$K$}, a Sedna native pivotal bundle bounty that concentrates rewards on the $κ$ bundles that actually trigger decoding, and we derive explicit incentive compatibility conditions against partial and coalition deviations. We further show that an adaptive sender ``ratchet'' that excludes lanes whose tickets were not redeemed collapses multi-slot withholding into a first slot deficit when $t^\star\ge 2$, reducing the required bounty by orders of magnitude. We close by bounding irreducible within slot decode races and providing parameter guidance and numerical illustrations. Our results show that for realistic parameters Sedna can reduce MEV costs to 0.04\% of the transaction value.

Figures (3)

• Figure 1: Multi-slot delay probability under full withholding, static sender ($q^{(0)}$, red) vs. ratchet ($q_{\mathrm{rat}}$, blue). Dots mark knife edge instances ($m \mid \kappa$). For $t^\star \ge 2$, the ratchet reduces the delay probability by many orders of magnitude except on knife edges ($\Delta = 0$) where a single cartel contact suffices. Parameters: $n = 100$, $m = 20$, $\beta = 0.2$.
• Figure 2: Multi-slot delay risk under full withholding ($q^{(0)}$, red), ratchet-corrected delay ($q_{\mathrm{rat}}$, blue), and within-slot race feasibility ($q_{\mathrm{micro}}$, green dashed). The three risks are complementary: $q^{(0)}$ peaks where $q_{\mathrm{micro}}$ is negligible (knife edges, $\Delta = 0$) and vice versa. The ratchet flattens the multi-slot delay envelope for $t^\star \ge 2$ to the single-slot tail level, except on knife edges where it coincides with $q^{(0)}$. No single $\kappa$ eliminates all three risks simultaneously; PIVOT-$K$ and adaptive sending address the multi-slot component, while protocol-level timing addresses the within-slot component. Parameters: $n = 100$, $m = 20$, $\beta = 0.2$.
• Figure 3: Coalition decomposition across $\kappa$. Panel (a): equal share benchmark $\alpha v \cdot \gamma^{t^\star}/(\Delta+1)$ (blue) versus per-lane opportunity cost $f$ (red dashed). Shaded regions: fees alone break the coalition (blue), moderate bounty suffices (green), monolithic IC binds (red). Dots mark knife edges. Panel (b): coalition bounty $B_{\mathrm{coal}}$ (solid blue) versus monolithic proxy (dotted grey). Red arrows mark knife edges where $B_{\mathrm{coal}}$ is undefined. Parameters: $n = 100$, $m = 20$, $\beta = 0.2$, $\alpha v = 100$, $\gamma = 0.99$, $f = 1$.

Theorems & Definitions (33)

• Lemma 1: Equivalence of delay and bundle deficit
• proof
• Theorem 1: Delay probability under the fluid stationary model
• proof
• Theorem 2: Full withholding maximizes delay probability
• proof
• Theorem 3: Sufficient condition for $w{=}1$ to dominate all stationary $w{<}1$
• proof
• Theorem 4: Minimax optimality of uniform pivotal payments
• proof