a16z: Redefining the "Block Space Allocation Rights" in Blockchain with Strong Chain Quality

Author: @ittaia, @PGarimidi, and @jneu_net
Compiled by: AididiaoJP, Foresight News
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Disclaimer: This article is a reprint, and readers can obtain more information through the original link. If the authors have any objections to the form of reprint, please contact us, and we will make modifications according to the authors’ requests. The reprint is for information sharing only and does not constitute any investment advice, nor does it represent the views and positions of Wu’s statements.

Chain Quality (CQ) is a core property of blockchain. In simple terms, it means: if you hold 3% of the staked equity, then on average, you can control 3% of the block space. For early blockchains with lower throughput, chain quality was sufficient. But modern blockchains have much greater bandwidth, allowing a single block to contain a large number of transactions. This introduces a stronger and more nuanced concept. It not only focuses on the average proportion of block space over time but also looks at the allocation of block space within each block. We call this “Strong Chain Quality” (SCQ): if you hold 3% of the staked equity, then in each block, you can control 3% of the block space. Essentially, this property enables stakeholders to have “virtual lanes” within a high-throughput blockchain, ensuring that their transactions can be included.

Chain Quality in Blockchain
One of Bitcoin’s key innovations—now present in almost every blockchain—is the introduction of an incentive mechanism for block proposers within the protocol: the party that successfully appends a block to the state machine can earn newly minted tokens and transaction fees. These rewards are specified by the state transition function and ultimately reflected in the system state. In traditional distributed computing models, participants are divided into honest and malicious parties. Here, there is no need to reward the honest party, as honest behavior is the default assumption within the model. In cryptoeconomic models, participants are viewed as rational actors, and their utility functions may be unknown. The goal is to design incentives that align these participants’ pursuit of self-profit maximization with the successful operation of the protocol. Combining the internal reward mechanisms of the protocol, we can derive the following idealized definition of chain quality:

Chain Quality (CQ): An alliance holding X% of the total staked equity has an X% probability of becoming the proposer of each block entering the chain after the Global Stability Time (GST).
If a chain deviates from the requirements of chain quality, it may allow certain alliances to gain an excessive share of rewards, thereby weakening the incentive for honest behavior and threatening the security of the protocol. Many blockchains strive to meet this property through a “random leader rotation mechanism based on staking weight.” Typical challenges faced include: Bitcoin’s “selfish mining” problem; Monad’s tail fork resistance issue; and problems in Ethereum’s LMD GHOST protocol.

Origins of “Strong Chain Quality”
When block space is sufficiently abundant, we do not have to allow a single proposer to monopolize the contents of an entire block. Instead, the block space of the same block can be shared among multiple participants. The cryptoeconomic definition of strong chain quality expresses this idea:
Strong Chain Quality (SCQ): An alliance holding X% of the total staked equity can control X% of the block space in each block after the Global Stability Time (GST).
This idealized attribute implicitly introduces the abstract concept of “virtual lanes.” In other words, alliances can actually control a certain proportion of dedicated block space in each block. From an economic perspective, having a virtual lane is akin to holding a productive asset that generates revenue; this revenue may come from transaction fees or from MEV (Maximum Extractable Value). External entities will compete around staking equity to acquire and maintain these lanes, creating sustained demand for the underlying L1 tokens. The greater the economic value a lane can generate, the stronger the motivation for various parties to compete for staking equity, and the more value can be accumulated from L1 staking equity that controls access to this block space. Through this abstraction, we can transform stronger censorship resistance into the effective property of SCQ within the protocol.

Strong Chain Quality and Censorship Resistance
Recent studies have shown that censorship-resistant protocols are highly important. Such protocols must not only ensure that honest parties’ inputs are eventually included but also guarantee that they are included immediately. Strong Chain Quality (SCQ) can be viewed as an extension of this property in the context of limited block capacity. In practical scenarios, if the volume of transactions waiting to be included exceeds the available block space, no protocol can achieve ideal censorship resistance. SCQ addresses this limitation with a more pragmatic approach: it does not require all honest transactions to always be included but instead allocates a “budget” for each staking node, ensuring that transactions can be included within this budget.

The MCP protocol was proposed as a component on top of existing practical Byzantine fault-tolerant (PBFT) consensus protocols to endow these protocols with censorship resistance. This protocol also meets the SCQ requirements—it allocates corresponding block space to proposers based on their staking equity. Existing directed acyclic graph (DAG)-based BFT protocols provide a means to implement a multi-writer memory pool, which also offers a degree of censorship resistance.
Standard implementations of these protocols often fail to strictly meet SCQ because they allow leaders to selectively delay certain subsets of transactions. However, slight modifications to these protocols could potentially re-establish SCQ. One related direction is “forced transaction inclusion,” aimed at reducing censorship behavior. The MCP also demonstrates how to achieve a stronger hiding property. With this property, stakeholders can create virtual private lanes, where the contents of these lanes are only revealed when the entire block is publicly disclosed. We will elaborate on this in subsequent articles.

How to Achieve Strong Chain Quality
To achieve strong chain quality after the Global Stability Time (GST), it is critical to ensure that proposers cannot arbitrarily censor the inputs of stakeholders. This can be achieved through a two-round protocol. Based on nearly all view-based BFT protocols, only two small modifications are needed:
First round: Each participant sends its verified input to all other participants.
Second round: Each participant adds i to their inclusion list if they receive a verified input from participant i. Subsequently, that participant sends its inclusion list to the leader. This operation is equivalent to a commitment: they will only accept blocks that include all inputs in that list.
BFT Proposal: After receiving these messages, the leader includes the union of all received inclusion lists in the block.
BFT Voting: A participant will only vote in favor if a block contains all inputs from their own inclusion list.
It is evident that a complete protocol can be constructed based on this protocol sketch. This protocol can satisfy strong chain quality after the Global Stability Time (GST), provide censorship resistance, and maintain liveness when the leader is an honest party. To achieve SCQ before GST, it is also necessary to wait for a sufficient number (quorum) of values or lists in each round. We will detail this protocol and its extended forms in subsequent articles.

Recent research indicates that to achieve strong chain quality and censorship resistance, it is necessary to add two additional rounds on top of the voting rounds of conventional BFT protocols (as outlined in the protocol sketch above). We will also elaborate on this result in subsequent articles.
Although strong chain quality (SCQ) specifies the proportion of block space that an alliance can control, it does not fully constrain the order of transactions within the block. SCQ can be understood as reserving space for each staking node, but it does not guarantee the order of transactions within these spaces. This opens up rich research opportunities for designing transaction ordering mechanisms. A good ordering mechanism has the potential to further enhance fairness and efficiency in the blockchain ecosystem. One promising direction is to prioritize transactions based on fee incentives.