Sealed-bid Auctions on Blockchain with Timed Commitment Outsourcing
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
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2024
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| _version_ | 1866914971695185920 |
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| author | Li, Jichen Tang, Yuanchen Chen, Jing Deng, Xiaotie |
| author_facet | Li, Jichen Tang, Yuanchen Chen, Jing Deng, Xiaotie |
| contents | Sealed-bid auctions play a crucial role in blockchain ecosystems. Previous works introduced viable blockchain sealed-bid auction protocols, leveraging timed commitments for bid encryption. However, a crucial challenge remains unresolved in these works: Who should bear the cost of decrypting these timed commitments?
This work introduces a timed commitment outsourcing market as a solution to the aforementioned challenge. We first introduce an aggregation scheme for timed commitments, which combines all bidders' timed commitments into one while ensuring security and correctness and allowing a varying number of bidders. Next, we remodel the utility of auctioneers and timed commitment solvers, developing a new timed commitment competition mechanism and combining it with the sealed-bid auction to form a two-sided market. The protocol includes bid commitment collection, timed commitment solving, and payment. Through game-theoretical analysis, we prove that our protocol satisfies Dominant Strategy Incentive Compatibility (DSIC) for bidders, Bayesian Incentive Compatibility (BIC) for solvers, and achieves optimal revenue for the auctioneer among a large class of mechanisms. Finally, we prove that no mechanism can achieve positive expected revenue for the auctioneer while satisfying DSIC and Individual Rationality (IR) for both bidders and solvers. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2410_10607 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Sealed-bid Auctions on Blockchain with Timed Commitment Outsourcing Li, Jichen Tang, Yuanchen Chen, Jing Deng, Xiaotie Computer Science and Game Theory Sealed-bid auctions play a crucial role in blockchain ecosystems. Previous works introduced viable blockchain sealed-bid auction protocols, leveraging timed commitments for bid encryption. However, a crucial challenge remains unresolved in these works: Who should bear the cost of decrypting these timed commitments? This work introduces a timed commitment outsourcing market as a solution to the aforementioned challenge. We first introduce an aggregation scheme for timed commitments, which combines all bidders' timed commitments into one while ensuring security and correctness and allowing a varying number of bidders. Next, we remodel the utility of auctioneers and timed commitment solvers, developing a new timed commitment competition mechanism and combining it with the sealed-bid auction to form a two-sided market. The protocol includes bid commitment collection, timed commitment solving, and payment. Through game-theoretical analysis, we prove that our protocol satisfies Dominant Strategy Incentive Compatibility (DSIC) for bidders, Bayesian Incentive Compatibility (BIC) for solvers, and achieves optimal revenue for the auctioneer among a large class of mechanisms. Finally, we prove that no mechanism can achieve positive expected revenue for the auctioneer while satisfying DSIC and Individual Rationality (IR) for both bidders and solvers. |
| title | Sealed-bid Auctions on Blockchain with Timed Commitment Outsourcing |
| topic | Computer Science and Game Theory |
| url | https://arxiv.org/abs/2410.10607 |