Public exludable goods and how to finance them: a literature review

Abstract

[en] Since the transition of Ethereum from a Proof-of-Work to a Proof-of-Stake consensus protocol back in September 2022, the Proposer Buider Separation schema, or PBS, arose as the methodology for block producing. This protocol runs at a deficit for the relays, the trusted third party between the proposers and builders, fact that motivated our intrest in studying the properties of the protocol. In this work we review the theoretical background needed to takle this analysis from a mechanism design perspective, we heavily relayand sumarise the the work of Roughgarden et al., providing the tools we need for it. Our main goal is to expose the basic notions of mechanism design theory and build a model capable of explaining the financing of public excludable goods, trying to provide a self sufficient and coherent thesis, even if disregarding problem that motivated this line of research. To achieve our goal we start by introducing several basic concepts of different aspects of applied mathematics and economics, opening the way to the development of those ideas into more sophisticated concepts. This theoretical approach peaks with the exposition of a selection of mechanisms and models and a review of their properties.