Toward Verification of DAG-Based Distributed Ledger Technologies through Discrete-Event Simulation

As the potential of directed acyclic graph (DAG)-based distributed ledgers in IoT systems unfolds, a need arises to understand their intricate dynamics in real-world scenarios. It is well known that discrete event simulations can provide high-fidelity evaluations of protocols. However, there is a lack of public discrete event simulators capable of assessing DAG-based distributed ledgers. In this paper, a discrete-event-based distributed ledger simulator is introduced, with which we investigate a custom Python-based implementation of IOTA's Tangle DAG protocol. The study reveals the dynamics of Tangle (particularly Poisson processes in transaction dynamics), the efficiency and intricacies of the random walk in Tangle, and the quantitative assessment of node convergence. Furthermore, the research underscores the significance of weight updates without depth limitations and provides insights into the role, challenges, and implications of the coordinator/validator in DAG architectures. The results are striking, and although the findings are reported only for Tangle, they demonstrate the need for adaptable and versatile discrete event simulators for DAG architectures and tip selection methodologies in general.