Towards trustworthy and privacy-preserving decentralized auctions

Blockchain smart-contracts can be used as service mappers, connecting a contractor with the service provider best fitting desired service requirements (e.g., price or quality of service). The allocation consists of comparing competitive bids using a smart-contract. However, in competitive environments, service providers may be reluctant to share sensitive information offers with the blockchain as it makes any transaction implicitly public. To reconcile data privacy imperatives with the benefits of blockchain, we propose to leverage fully homomorphic encryption (FHE) for blockchain-based sealed-bid auctions. More precisely (i) FHE enables the processing of bids without decrypting them, (ii) smart-contracts gather and orchestrate bids comparison, and (iii) a computation oracle carries on comparisons over ciphered data. Collusion attempts may occur between bidders and the computation oracle. To prevent this, we combine FHE with hybrid RSA/AES encryption to preserve the privacy of the onchain bid contents. Hence, our protocol prevents information leakage onchain and on the service providers’ side during bids comparison. We validate this approach through an implemented prototype.