2024/10/14 by Jichen Li, Yuk Ming Tang, Li, Jichen +5
Business, Management and Accounting · Computer Science · Decision Sciences · #Auction Theory and Applications #Blockchain Technology Applications and Security #Computer Science and Game Theory (cs.GT) #FOS: Computer and information sciences #Supply Chain and Inventory Management
paper · pdf · doi:10.48550/arxiv.2410.10607
openalex publication_date 2024/10/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
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.