Auto-Balancer: Harnessing idle network resources for enhanced market stability

We propose a mechanism embedded into the foundational infrastructure of a blockchain network, designed to improve the utility of idle network resources, whilst enhancing market microstructure efficiency during block production by leveraging both network-owned and external capital. By systematically seeking to use idle network resources for internally capture arbitrageable inefficiencies, the mechanism mitigates extractable value leakage, reduces execution frictions, and improves price formation across venues. This framework optimises resource allocation by incentivising an ordered set of transactions to be identified and automatically executed at the end of each block, redirecting any realised arbitrage income - to marketplaces operating on the host blockchain network (and other stakeholders), which may have otherwise been extracted as rent by external actors. Crucially, this process operates without introducing additional inventory risk, ensuring that the network remains a neutral facilitator of price discovery. While the systematic framework governing the distribution of these internally captured returns is beyond the scope of this work, reinvesting them to support the ecosystem deployed on the host blockchain network is envisioned to endogenously enhance liquidity, strengthen transactional efficiency, and promote the organic adoption of the blockchain for end users. This mechanism is designed specifically for Supra's blockchain and seeks to maximally utilise its highly efficient automation framework to enhance the blockchain network's efficiency.

Publication Details

Journal
ArXiv.org
Published
2025-02-27
Primary Topic
Blockchain Technology Applications and Security
Type
article
Field-Weighted Citation Impact
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article

Auto-Balancer: Harnessing idle network resources for enhanced market stability

ArXiv.org
Blockchain Technology Applications and Security
article

Auto-Balancer: Harnessing idle network resources for enhanced market stability

article en

Abstract

We propose a mechanism embedded into the foundational infrastructure of a blockchain network, designed to improve the utility of idle network resources, whilst enhancing market microstructure efficiency during block production by leveraging both network-owned and external capital. By systematically seeking to use idle network resources for internally capture arbitrageable inefficiencies, the mechanism mitigates extractable value leakage, reduces execution frictions, and improves price formation across venues. This framework optimises resource allocation by incentivising an ordered set of transactions to be identified and automatically executed at the end of each block, redirecting any realised arbitrage income - to marketplaces operating on the host blockchain network (and other stakeholders), which may have otherwise been extracted as rent by external actors. Crucially, this process operates without introducing additional inventory risk, ensuring that the network remains a neutral facilitator of price discovery. While the systematic framework governing the distribution of these internally captured returns is beyond the scope of this work, reinvesting them to support the ecosystem deployed on the host blockchain network is envisioned to endogenously enhance liquidity, strengthen transactional efficiency, and promote the organic adoption of the blockchain for end users. This mechanism is designed specifically for Supra's blockchain and seeks to maximally utilise its highly efficient automation framework to enhance the blockchain network's efficiency.

ArXiv.org
Openalex Percentile: Top 36%
Blockchain Technology Applications and Security
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