Block Hijacking Attack: Impact Evaluation on Liquid Network and Design Insights for Blockchain-based Scaling Solutions

Scalability remains a critical challenge in blockchain systems, driving the development of various solutions to increase transaction throughput. However, the trade-offs inherent in achieving higher throughput, particularly concerning security and decentralization, have yet to be thoroughly explored. Furthermore, the rapid evolution in blockchain ecosystems, including scaling solutions, has led to a significant increase in the scale and sophistication of attacks, highlighting the pressing need to address security vulnerabilities and ensure the robustness and reliability of these systems. To tackle these challenges, this study aims to elucidate the compromises inherent in enhancing scalability and to identify key considerations for designing blockchain systems. In this paper, we present and evaluate the Block Hijacking Attack—an economically rational DoS attack that disrupts other user’s transactions and is applicable to blockchain systems that meet certain conditions—demonstrated on a scaling solution, Liquid Network. We further propose countermeasures as practices and offer insights for blockchain system design.