Heterogeneity- and homophily-induced vulnerability of a P2P network formation model: the IOTA auto-peering protocol

IOTA is a distributed ledger technology that relies on a peer-to-peer (P2P) network for communications. Recently an auto-peering algorithm was proposed to build connections among IOTA peers according to their "Mana" endowment, which is an IOTA internal reputation system. This paper's goal is to detect potential vulnerabilities and evaluate the resilience of the P2P network generated using IOTA auto-peering algorithm against eclipse attacks. In order to do so, we interpret IOTA's auto-peering algorithm as a random network formation model and employ different network metrics to identify cost-efficient partitions of the network. As a result, we present a potential strategy that an attacker can use to eclipse a significant part of the network, providing estimates of costs and potential damage caused by the attack. On the side, we provide an analysis of the properties of IOTA auto-peering network ensemble, as an interesting class of homophile random networks in between 1D lattices and regular Poisson graphs.