{"ID":2856555,"CreatedAt":"2026-06-01T04:54:23.091178241Z","UpdatedAt":"2026-06-01T04:54:23.091178241Z","DeletedAt":null,"paper_url":"https://arxiv.org/abs/2510.11866","arxiv_id":"2510.11866","title":"Rationally Analyzing Shelby: Proving Incentive Compatibility in a Decentralized Storage Network","abstract":"Decentralized storage is one of the most natural applications built on blockchains and a central component of the Web3 ecosystem. Yet despite a decade of active development -- from IPFS and Filecoin to more recent entrants -- most of these storage protocols have received limited formal analysis of their incentive properties. Claims of incentive compatibility are sometimes made, but rarely proven. This gap matters: without well-designed incentives, a system may distribute storage but fail to truly decentralize it. We analyze Shelby -- a storage network protocol recently proposed by Aptos Labs and Jump Crypto -- and provide the first formal proof of its incentive properties. Our game-theoretic model shows that while off-chain audits alone collapse to universal shirking, Shelby's combination of peer audits with occasional on-chain verification yields incentive compatibility under natural parameter settings. We also examine coalition behavior and outline a simple modification that strengthens the protocol's collusion-resilience.","short_abstract":"Decentralized storage is one of the most natural applications built on blockchains and a central component of the Web3 ecosystem. Yet despite a decade of active development -- from IPFS and Filecoin to more recent entrants -- most of these storage protocols have received limited formal analysis of their incentive prope...","url_abs":"https://arxiv.org/abs/2510.11866","url_pdf":"https://arxiv.org/pdf/2510.11866v1","authors":"[\"Michael Crystal\",\"Guy Goren\",\"Scott Duke Kominers\"]","published":"2025-10-13T19:20:43Z","proceeding":"cs.GT","tasks":"[\"cs.GT\",\"cs.DC\",\"cs.MA\"]","methods":"[]","has_code":false}