2025/10/13 by Michael Crystal, Crystal, Michael, Guy Goren +3
Business, Management and Accounting · Computer Science · Economics, Econometrics and Finance · #Banking stability, regulation, efficiency #Computer Science and Game Theory (cs.GT) #Digital Platforms and Economics #Distributed #FOS: Computer and information sciences #Multiagent Systems (cs.MA) #Parallel #Peer-to-Peer Network Technologies #and Cluster Computing (cs.DC)
paper · pdf · doi:10.48550/arxiv.2510.11866
openalex publication_date 2025/10/13 · openalex created_date 2025/10/17 · openalex updated_date 2026/07/28
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.