NEST Oracle Machine Facing Mining Pool Refusal to Package Attack Analysis

The distributed Oracle Machine system NEST aims to improve the reliability of price data and the security of the system through extensive on-chain user participation. However, this design also brings some potential risks, one of which is that the Mining Pool may exploit its computing power advantage to carry out denial-of-service attacks.

NEST Oracle Machine adopts a quotation-taking verification mechanism to prevent malicious quoting. However, the effectiveness of this mechanism depends on whether relevant transactions can be timely packaged and put on the chain. With the rise of Mining Pools, their monopoly on transaction packaging rights may threaten the normal operation of this mechanism.

Specifically, malicious mining pools may carry out the following attack process:

1. Pre-stock cryptocurrencies for arbitrage
2. Submit a quote to NEST that has a huge discrepancy from the actual market price.
3. During the verification period, reject any transactions attempting to modify the quoted price.
4. After the verification period ends, arbitrage using incorrect price data.

From the perspective of game theory, this type of attack can be viewed as a complete information static game. Each Mining Pool faces the decision of whether to package corrected quoted transactions, and the final outcome depends on the comparison of benefits among the parties.

For a single Mining Pool, choosing to package corrected transactions can yield instant profits a, but the probability is only based on its hash rate proportion. On the other hand, choosing not to package can offer the opportunity for higher arbitrage profits b, but it requires that other Mining Pools also do not package in order to realize this.

Therefore, the decisions of the Mining Pool will depend on:

1. The proportion of one's own computing power
2. The ratio of immediate earnings a to potential arbitrage earnings b
3. Other possible Mining Pools

This attack not only threatens the security of the NEST Oracle Machine but also highlights the potential risks of mining pool centralization to the entire blockchain ecosystem. How to address the challenges posed by mining pools while maintaining decentralization is a problem that the entire industry needs to face together.