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FAST: Fair Auctions via Secret Transactions

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Applied Cryptography and Network Security (ACNS 2022)

Part of the book series: Lecture Notes in Computer Science ((LNCS,volume 13269))

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Abstract

Sealed-bid auctions are a common way of allocating an asset among a set of parties but require trusting an auctioneer who analyses the bids and determines the winner. Many privacy-preserving computation protocols for auctions have been proposed to eliminate the need for a trusted third party. However, they lack fairness, meaning that the adversary learns the outcome of the auction before honest parties and may choose to make the protocol fail without suffering any consequences. In this work, we propose efficient protocols for both first and second-price sealed-bid auctions with fairness against rational adversaries, leveraging secret cryptocurrency transactions and public smart contracts. In our approach, the bidders jointly compute the winner of the auction while preserving the privacy of losing bids and ensuring that cheaters are financially punished by losing a secret collateral deposit. We guarantee that it is never profitable for rational adversaries to cheat by making the deposit equal to the bid plus the cost of running the protocol, i.e., once a party commits to a bid, it is guaranteed that it has the funds and it cannot walk away from the protocol without forfeiting the bid. Moreover, our protocols ensure that the winner is determined and the auction payments are completed even if the adversary misbehaves so that it cannot force the protocol to fail and then rejoin the auction with an adjusted bid. In comparison to the state-of-the-art, our constructions are both more efficient and furthermore achieve stronger security properties, i.e., fairness. Interestingly, we show how the second-price can be computed with a minimal increase of the complexity of the simpler first-price case. Moreover, in case there is no cheating, only collateral deposit and refund transactions must be sent to the smart contract, significantly saving on-chain storage.

B. David—This work was supported by the Concordium Foundation and by the Independent Research Fund Denmark with grants number 9040-00399B (TrA2C) and number 9131-00075B (PUMA).

L. Gentile—This work was supported by the Concordium Foundation.

M. Pourpouneh—This work was supported by the Center for Blockchains and Electronic Markets funded by the Carlsberg Foundation under grant no. CF18-1112.

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Notes

  1. 1.

    In fact, showing such a proof of knowledge \(\pi '\) of \(r_{\mathtt {out}_i}\) together with \(h^{r_{\mathtt {out}_i}}\) and \(\mathtt {out}_i\) makes it easy to adapt reduction of the binding property of the Pedersen commitment scheme to the Discrete Logarithm assumption. Instead of obtaining \(r_{\mathtt {out}_i}\) from the adversary, the reduction simply extracts it from \(\pi '\).

  2. 2.

    We need \(m/2+2\) honest members to instantiate our packed publicly verifiable secret sharing based solution where two group elements are secret shared with a single share vector.

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Authors and Affiliations

  1. IT University of Copenhagen, Copenhagen, Denmark

    Bernardo David & Lorenzo Gentile

  2. Copenhagen University, Copenhagen, Denmark

    Mohsen Pourpouneh

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  1. Bernardo David
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  2. Lorenzo Gentile
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Correspondence to Lorenzo Gentile .

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  1. Stevens Institute of Technology, Hoboken, NJ, USA

    Giuseppe Ateniese

  2. Sapienza University of Rome, Rome, Italy

    Daniele Venturi

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David, B., Gentile, L., Pourpouneh, M. (2022). FAST: Fair Auctions via Secret Transactions. In: Ateniese, G., Venturi, D. (eds) Applied Cryptography and Network Security. ACNS 2022. Lecture Notes in Computer Science, vol 13269. Springer, Cham. https://doi.org/10.1007/978-3-031-09234-3_36

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