Inside blockchain and cryptoeconomics research at Facebook

Blockchains provide an excellent example of how foundational computer science and economic research can change the trajectory of entire industries. As a result of the work of many researchers over decades, we are starting to see a transformation in the technology underlying payment systems.

At Facebook, we’re contributing to this effort with a world-class research team that sits within Novi, a regulated financial company building for the Libra payment system. We’re a group of research scientists, economists, and software engineers working across interdisciplinary fields, including cryptography, programming languages, distributed systems, program verification, game theory, security, privacy, financial inclusion, economic development, macroeconomics, and market design. Check out the Blockchain and Cryptoeconomics page to learn more about us.

As an impact-driven research team, we’re focused on supporting the development of the Novi wallet and contributing to a variety of blockchain and research communities, including the Libra project, which is built on an open source blockchain. We are addressing the limitations of blockchain systems by incubating open source tech and pursuing research that will make these systems more scalable, safer, and more accessible.

We’re excited to share more about the technical advancements we’ve made and the economic research we’re undertaking to advance Novi’s goal of making money move more freely for more people.

Novi technical publications

We share many of the same ambitions outlined in the Initiative for CryptoCurrencies and Contracts’ Seven Grand Challenges, which identify the major blockers to blockchain adoption. Based on the work we’ve published to date, we’ve made some early progress toward addressing issues of scaling and performance, correctness, and safety — but we are just getting started. Here’s a shortlist of recent publications that highlight our work across several key dimensions:

Scaling and performance

  • State machine replication in the Libra blockchain: A state-of-the-art Byzantine fault tolerance algorithm for Libra (LibraBFT) for forming agreement on ordering and finalizing transactions among a configurable set of validators.
  • Cogsworth: A new Byzantine view synchronization algorithm that has optimistically linear communication complexity and constant latency. Faced with benign failures, Cogsworth has expected linear communication and constant latency.
  • FastPay: A set of distributed authorities that allows organizations to leverage prefunded quorums to settle transactions at ~80,000 tps.

Correctness by design and construction

  • Move: A language with programmable resources: An executable bytecode language used to implement custom transactions and smart contracts. With Move, a resource can never be copied or implicitly discarded, only moved between program storage locations.
  • The Move Prover: A formal verification system that enables automatic verification of functional correctness for Move modules.
  • Twins: White-glove approach for BFT testing: A novel approach to emulate common Byzantine behaviors. The main idea of Twins is that we can emulate Byzantine behavior by running two instances of a node with the same identity. Each of the two instances (or Twins) runs unmodified, correct code.

Safety and compliance

  • Proof of liabilities: A novel algorithm for proving liabilities with privacy that allows entities to undergo a distributed audit of their liabilities. It is the first scheme to protect users against dishonest entities, without leaking individual identifiable data.
  • Taming the many EdDSAs: A novel technique to check compatibility of cryptographic libraries that implement the EdDSA signature scheme. It surfaces discrepancies between libraries and the standards, and it justifies the best way of implementing the scheme securely focusing on practical aspects.

Novi Cryptoeconomics

In addition to our open source technical advancements, economists on the Novi cryptoeconomics team conduct research into financial inclusion, applied microeconomics, macroeconomics, and market design. We work closely with computer scientists, translating economic theory into real-world, practical solutions for blockchain-based problems. Here are more details on where the team is focused within each of our core research areas:

  • Financial inclusion: Designing, testing, and scaling low-cost financial tools that could improve the lives of the world’s unbanked and underbanked populations. Using the power of smart contracts and programmable payments to reduce costs, increase efficiency and access to financial services.
  • Applied microeconomics: Using experiments to learn about the behavior of people and businesses in a global payment system.
  • Macroeconomics: Investigating stablecoin systems and reserves that are solvent, liquid, and support financial stability. Creating a competitive environment that allows for financial opportunity and innovation.
  • Market design: Designing objective and transparent mechanisms that help establish and maintain proper governance in stablecoin systems, to ensure that operations are aligned with the long-run needs of their users.

Getting involved

If you’re inspired by any of this work, we’d love to hear from you. As new opportunities arise for roles on the team, including for visiting researchers, we will post them to our careers page. Be sure to check back often for updates.

We also regularly offer PhD fellowships in the area of blockchain and cryptoeconomics. Learn more by visiting the Facebook Fellowship Program page. Applications open every fall, and winners are announced the following January.

We also actively participate in industry and academic conferences, whether they’re virtual or in-person. Feel free to say hello if you spot any members of our group.

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