> For the complete documentation index, see [llms.txt](https://docs.chainargos.com/documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.chainargos.com/documentation/research/theoretical-research/impossibilities.md).

# Impossibilities

This is a collection of impossibility results for decentralized/permissionless systems. The focus here is on math- or CS-style results.

1. Trustless cross-chain bridges are impossible: [SoK: Communication Across Distributed Ledgers](https://eprint.iacr.org/2019/1128), 25th International Conference on Financial Cryptography and Data Security, 2021
2. Trustless escrow impossibility: [Irrationality, Extortion, or Trusted Third-parties: Why it is Impossible to Buy and Sell Physical Goods Securely on the Blockchain](https://arxiv.org/abs/2110.09857), IEEE International Conference on Blockchain, 2021
3. You can ony have two of correctness, decentralization & cost efficiency: [Blockchain Economics](https://markus.scholar.princeton.edu/publications/blockchain-economics), Princeton University Economics department working paper, 2021
4. UTXO and account-based system decomposition impossibility: [A Unifying Theory of Electronic Money and Payment Systems](https://www.techrxiv.org/doi/full/10.36227/techrxiv.14994558.v3), TechRxiv, 2022
5. Scaling impossibility: [Asset Transfer Ordering Under A No-Negative-Balance Requirement Is NP-Complete](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4701874), SSRN, 2024
   * See also [The Consequences Of Scalable Blockchains](https://medium.com/chainargos/the-consequences-of-scalable-blockchains-8c4d23c6af4d), blog post, 2022
   * See also [Sharding Is Also NP-Complete](https://medium.com/chainargos/sharding-is-also-np-complete-8faeafaf360a), blog post, 2022
6. Decentralized risk-free yield is impossible: [Risk-Free Interest Rates in Decentralized Finance](https://ieeexplore.ieee.org/abstract/document/10338890), IEEE Fifth International Conference on Blockchain Computing and Applications, 2023
7. Capital-efficient decentralized stablecoins are impossible: [Computer Science Abstractions to Help Reason About Decentralized Stablecoin Design](https://ieeexplore.ieee.org/abstract/document/10258164), IEEE Access, 2023
8. Decentralized trustless oracle impossibility: [An impossibility theorem on truth-telling in fully decentralized systems](https://www.bis.org/publ/work1117.pdf), BIS working paper, 2023
   * See also [The oracle problem and the future of DeFi](https://www.bis.org/publ/bisbull76.pdf), BIS Bulletin, 2023
9. Trustless protocols cannot guarantee price stability: [Can Trustless Protocols Guarantee Price Stability?](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4576168), SSRN, 2023
10. Compliance impossibility: [Tradeoffs in automated financial regulation of decentralized finance due to limits on mutable turing machines](https://www.nature.com/articles/s41598-024-84612-9), Scientific Reports, 2025
    * See also [The Compliance-Innovation Trade-off](https://datafinnovation.medium.com/the-compliance-innovation-trade-off-72b9f8026f56), blog post, 2022
    * [Compliance Impossibility Intuition](https://datafinnovation.medium.com/0c5238979870), blog post, 2025

## Other collections

[This blog](https://blog.dshr.org/2022/09/impossibilities.html) has a slightly different focus and covers some economic-equilibrium-focused papers as well. For example a paper proving that full decentralization is incompatible with a broad class of standard economic assumptions about market participants.

And a limited selection of other economic-equilibrium papers that have come up over the years:

* Oracles
  * [Decentralized Common Knowledge Oracles](https://arxiv.org/abs/1912.01215)
  * [Select-Storage: A New Oracle Design Pattern on Blockchain](https://ieeexplore.ieee.org/document/9724384)
  * [Blockchain Oracle Design Patterns](https://arxiv.org/abs/2106.09349)