[blog] Decentralized Exchange Network as a Platform for Centralized Exchanges

[Akado]

Well other chains might have other methods to deal with this problem.

But in BTS, specifically, what if witnesses detected the spamming and simply didn't include those transactions on the blocks? I mean, this would be a very serious action, they would need to be sure but... Or why not make fees escalate if they're done within X blocks? That makes sense? If number of tx > X and the transaction IDs are all within [w, z] blocks, they scale up.

If it passes that defined threshold then fees go up OR transactions get delayed and spread throughout the next X number of blocks as a mean to distribute it evenly

[btstip]

Hey ebit, here are the results of your tips...

• Akado: has been credited 1 ROSE

Curious about ShareBits? Visit us at http://sharebits.io and start tipping BTS on https://bitsharestalk.org/ today!

Source: https://bitsharestalk.org/index.php/topic,21097.msg273446/topicseen.html#msg273446

Created by hybridd

[ebit]

#sharebits Akado 1 ROSE

[monsterer]

I am not sure that users really care about the temporal fee of 1 BTS per creating order during DDOS.
If you want to be more active, you can charge much more fees during DDOS (say, 10 BTS by adjusting CER), collect BTS from the attacker, and payback to normal users for their fees paid during the DDOS. Isn't it a good idea?

No, I don't think it is. Charging users to place or modify orders will cause them to seek another exchange which doesn't charge them. Trading bots execute thousands of such actions per day in the busiest exchanges.

[clayop]

Regarding DDOS, By charging order creation fee (without refund when cancelled) during the DDOS, you can effectively prevent the attack. In centralized exchanges, users sometimes cannot use the service due to DDOS. DEX has better option. They choose not to use the service to avoid additional fees, or choose to use the service with small amount of fees.

All that happens then is users are forced to move away from this exchange to another one which doesn't charge them fees (for creation/change); therein the DDOS attack succeeds. Motivation for the attack in this case is clear: competitors.

I am not sure that users really care about the temporal fee of 1 BTS per creating order during DDOS.
If you want to be more active, you can charge much more fees during DDOS (say, 10 BTS by adjusting CER), collect BTS from the attacker, and payback to normal users for their fees paid during the DDOS. Isn't it a good idea?

[monsterer]

Regarding DDOS, By charging order creation fee (without refund when cancelled) during the DDOS, you can effectively prevent the attack. In centralized exchanges, users sometimes cannot use the service due to DDOS. DEX has better option. They choose not to use the service to avoid additional fees, or choose to use the service with small amount of fees.

All that happens then is users are forced to move away from this exchange to another one which doesn't charge them fees (for creation/change); therein the DDOS attack succeeds. Motivation for the attack in this case is clear: competitors.

[clayop]

The killer problem with this idea is DDOS. This is a major problem for real exchanges and actually gets worse for exchanges thinking of decentralising to bitshares transparently.

Fees are the issue. Creating/changing an order has an associated cost. Exchanges are forced to swallow this cost, or attempt to offset it by charging more for fills, but this does not mitigate the DDOS problem.

A motivated attacker can easily game this system by creating/modifying orders using a bot over and over until it triggers whatever mechanism the exchange has to prevent it. If the attacker uses enough accounts to mount this attack it becomes very difficult to repel, and will effectively DDOS the entire exchange.

Fee issue can be abated by reducing order creation fee (say to 1 BTS) and set a minimum order amount (e.g. under 0.2% fee, 500 (1 BTS / 0.2%) BTS worth).

Regarding DDOS, By charging order creation fee (without refund when cancelled) during the DDOS, you can effectively prevent the attack. In centralized exchanges, users sometimes cannot use the service due to DDOS. DEX has better option. They choose not to use the service to avoid additional fees, or choose to use the service with small amount of fees.

[monsterer]

The killer problem with this idea is DDOS. This is a major problem for real exchanges and actually gets worse for exchanges thinking of decentralising to bitshares transparently.

Fees are the issue. Creating/changing an order has an associated cost. Exchanges are forced to swallow this cost, or attempt to offset it by charging more for fills, but this does not mitigate the DDOS problem.

A motivated attacker can easily game this system by creating/modifying orders using a bot over and over until it triggers whatever mechanism the exchange has to prevent it. If the attacker uses enough accounts to mount this attack it becomes very difficult to repel, and will effectively DDOS the entire exchange.

[Akado]

Ok so this is my first attempt at a blog post. It's not finished yet, need to check grammar. I still didn't review it but the main idea is there.

Just wanted to share it first here. Tell me what you think. Correct me if I said something wrong. Any ideas are welcomed.

I didn't mention OpenLedger and BitShares on purpose as I'm just trying to get this idea around and some people who hate alt coins, upon seeing that could immediately dismiss it. I intend in the future, however, to make some posts reviewing decentralized exchanges, how they work, etc, meaning bts/openledger will most likely be the first one.

http://akadosang.github.io/decentralized_exchange_network.html