Anonymous Sealed-Bid Auction on Ethereum

Abstract

In a competitive market, online auction systems enable optimal trading of digital products and services. Bidders can participate in existing blockchain-based auctions while protecting the confidentiality of their bids in a decentralized, transparent, secure, and auditable manner. However, in a competitive market, parties would prefer not to disclose their interests to competitors, and to remain anonymous during auctions. In this paper, we firstly analyze the specific requirements for blockchain-based anonymous fair auctions. We present a formal model tailored to study auction systems that facilitate anonymity, as well as a generic protocol for achieving bid confidentiality and bidder anonymity using existing cryptographic primitives such as designated verifier ring signature. We demonstrate that it is secure using the security model we presented. Towards the end, we demonstrate through extensive simulation results on Ethereum blockchain that the proposed protocol is practical and has minimal associated overhead. Furthermore, we discuss the complexity and vulnerabilities that a blockchain environment might introduce during implementation.