Trustworthy sealed-bid auction with low communication cost atop blockchain

Abstract

Auction, widely used by firms and governments, has facilitated trillions of dollars in the world economy. However, when price is the only factor determining the winner, how to guarantee the trustworthiness of the auction outcomes, and at the same time preserve the privacy of losing bidders is a challenging issue. In this paper, to address this issue, we present a sealed-bid auction protocol with privacy preserving and public verifiability atop blockchain. No bidder is able to repudiate or change any bidding to outbid others and all public information comes with proof that even observers are able to validate the auction. Proofs post along the way to validate biddings and identify the winner are in the form of group elements with communication complexity O(log⁡(nm)), n,m denoting the upper bound bit length of the bidding price and the number of bidders respectively. The logarithmic complexity significantly reduces the communication cost and makes it practical for large-scale auction. Moreover, our protocol can be easily extended to any type of ordinal-price sealed-bid auction such as second-price with privacy preserving. We provide detailed security proofs or analysis of the required security goals. The evaluation of time cost in off-chain operations and gas cost in on-chain functions demonstrate the practicality of our protocol in real-world applications.