Data Independent Order Policy Enforcement: Limitations and Solutions

Order manipulation attacks such as frontrunning and sandwiching have become an increasing concern in blockchain applications such as DeFi. To protect from such attacks, several recent works have designed order policy enforcement (OPE) protocols to order transactions fairly in a data-independent fashion. However, while the manipulation attacks are motivated by monetary profits, the defenses assume honesty among a significantly large set of participants. In existing protocols, if all participants are rational, they may be incentivized to collude and circumvent the order policy without incurring any penalty.