Ordering by Unanimity: Giving Applications Sequencing Rights Without Breaking Composability

Blockchain applications may have preferences over the order in which transactions execute: an automated market maker may use an external feed to price its liquidity, and require that the oracle update incorporating this price execute before any swap; an exchange may want to execute cancellations of limit orders before incoming market orders; an application may run an on-chain auction by executing bids from highest to lowest, so that the first bid wins.

However, the ordering of transactions is chosen by the underlying blockchain and may not be compatible with the requirements of a specific application.

In this paper, I tackle this problem by introducing an algorithm called unanimity override.

The intuition is that when all the applications agree on how to order two transactions, the underlying blockchain should respect this agreement; a default order - the order in which transactions appear in the block - settles the rest.

The problem with this naive approach is that application unanimity may form cycles, which the algorithm must break.

Cycle-breaking is also the rule's main vulnerability because an attacker can insert transactions to manufacture a cycle.

Yet two guarantees hold against any attacker who sets the default order, deploys applications, and inserts transactions.

All transactions that interact with a single application that expressed preferences are ordered according to that application's preferences, even when they also interact with other applications that did not express preferences.

Also, gated transactions - those that cannot be outranked in the unanimity order by any transaction crafted by an attacker - always execute as the applications unanimously prefer, even when they touch many applications.

The two guarantees identify the preferences the protocol can protect, and they tell applications and senders in advance which transactions will execute in the intended order.