Paper 2025/1428

Strategic Mining in Proof-of-Stake with Practical Random Election

Abstract

The security of blockchain systems relies on the honest majority assumption. However, strategic mining threatens this assumption, because selfish miners can gain more block rewards than honest miners by attacks such as withholding blocks. Due to its significant implication, blockchain mining games have been studied in PoW and PoS under various settings using different methods. Nonetheless, this paper argues that the practical limitation of random beacons has not been exploited in strategic mining in PoS blockchains. Current PoS blockchains use random beacons to randomly select validators for each slot. However, the randomness is usually fixed for multiple slots, due to the latency of distributed random beacon protocols. This means that validators actually know the exact election results for future slots within an epoch, which contrasts with the Markov process models in previous analysis. In this paper, we formalize this ”Lookahead Property” and present Lookahead-Aware Mining (LAM), a deterministic optimal strategy that exploits the predictability of epoch-based leader schedules. By mapping the mining process to a Weighted Interval Scheduling problem on the difference of prefix sums, we derive an $O(T \log T )$ algorithm that allows adversaries to compute the exact optimal attack strategy in real-time. Our simulations demonstrate that LAM enables miners with as little as 5% stake to outperform honest mining, significantly lowering the security threshold compared to probabilistic MDP-based models which require >30% stake to be profitable.