Blockchain-based auction markets offer stronger fairness and transparency compared to their centralized counterparts. Deposits and sealed bid formats are usually applied to enhance security and privacy. However, to our best knowledge, the formal treatment of deposit-enabled sealed-bid auctions remains lacking in the cryptographic literature. To address this gap, we first propose a decentralized anonymous deposited-bidding (DADB) scheme, providing formal syntax and security definitions. Unlike existing approaches that rely on smart contracts, our construction utilizes a mainchain-sidechain structure that is also compatible with the Extended UTXO (EUTXO) Model. Based on Algorand (SOSP ’17), this design further allows us to customize the sidechain by integrating a novel block qualification mechanism into block selection. Consequently, we prove, from a game-theoretical perspective, that our design optimizes liveness latency for rational users who want to join the auction, even without explicit incentives (e.g., fees) for including bids. Finally, we analyze the cost of our protocol and demonstrate the potential performance degradation without our block qualification mechanism using implementation results.

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Optimizing Liveness for Blockchain-Based Sealed-Bid Auctions in Rational Settings

  • Maozhou Huang,
  • Xiangyu Su,
  • Mario Larangeira,
  • Keisuke Tanaka

摘要

Blockchain-based auction markets offer stronger fairness and transparency compared to their centralized counterparts. Deposits and sealed bid formats are usually applied to enhance security and privacy. However, to our best knowledge, the formal treatment of deposit-enabled sealed-bid auctions remains lacking in the cryptographic literature. To address this gap, we first propose a decentralized anonymous deposited-bidding (DADB) scheme, providing formal syntax and security definitions. Unlike existing approaches that rely on smart contracts, our construction utilizes a mainchain-sidechain structure that is also compatible with the Extended UTXO (EUTXO) Model. Based on Algorand (SOSP ’17), this design further allows us to customize the sidechain by integrating a novel block qualification mechanism into block selection. Consequently, we prove, from a game-theoretical perspective, that our design optimizes liveness latency for rational users who want to join the auction, even without explicit incentives (e.g., fees) for including bids. Finally, we analyze the cost of our protocol and demonstrate the potential performance degradation without our block qualification mechanism using implementation results.