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A Private Auction on Aleo

Summary

A first-price sealed-bid auction (or blind auction) is a type of auction in which each participant submits a bid without knowing the bids of the other participants. The bidder with the highest bid wins the auction.

In this model, there are two parties: the auctioneer and the bidders.

  • Bidder: A participant in the auction.
  • Auctioneer: The party responsible for conducting the auction.

We make following assumptions about the auction:

  • The auctioneer is honest. That is, the auctioneer will resolve all bids in the order they are received. The auctioneer will not tamper with the bids.
  • There is no limit to the number of bids.
  • The auctioneer knows the identity of all bidders, but bidders do not necessarily know the identity of other bidders.

Under this model, we require that:

  • Bidders do not learn any information about the value of other bids.

Auction Flow

The auction is conducted in a series of stages.

  • Bidding: In the bidding stage, bidders submit bids to the auctioneer. They do so by invoking the place_bid function.
  • Resolution: In the resolution stage, the auctioneer resolves the bids in the order they were received. The auctioneer does so by invoking the resolve function. The resolution process produces a single winning bid.
  • Finishing: In this stage, the auctioneer finishes the auction by invoking the finish function. This function returns the winning bid to the bidder, which the bidder can then use to claim the item.

Language Features and Concepts

  • record declarations
  • assert_eq
  • record ownership

Setup

1. Install Leo

Follow the Leo Installation Instructions

2. Download the auction example code

Clone the source code for the auction example from Github.

How to Run

Generating Accounts

The program.json file contains a private key and address. This is the account that will be used to sign transactions and is checked for record ownership. When executing programs as different parties, be sure to set the private_key and address fields in program.json to the appropriate values. See ./run.sh for an example of how to run the program as different parties.

Go to aleo.tools to generate new accounts.

The web interface is powered by the Aleo SDK and can be run locally.

Using an input file.

  1. Modify inputs/auction.in with the desired inputs.
  2. Run
leo run <function_name>

Step 0: Initializing the Auction

You can use the provided accounts or generate your own

Bidder 1:
Private Key APrivateKey1zkpG9Af9z5Ha4ejVyMCqVFXRKknSm8L1ELEwcc4htk9YhVK
Address aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke

Bidder 2:
Private Key APrivateKey1zkpAFshdsj2EqQzXh5zHceDapFWVCwR6wMCJFfkLYRKupug
Address aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4

Auctioneer:
Private Key APrivateKey1zkp5wvamYgK3WCAdpBQxZqQX8XnuN2u11Y6QprZTriVwZVc
Address aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh

Swap in the private key and address of the first bidder to program.json.

{
"program": "auction.aleo",
"version": "0.0.0",
"description": "A sealed bid auction",
"development": {
"private_key": "APrivateKey1zkpG9Af9z5Ha4ejVyMCqVFXRKknSm8L1ELEwcc4htk9YhVK",
"address": "aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke"
},
"license": "MIT"
}

Step 1: The First Bid

Have the first bidder place a bid of 10.

    // Returns a new bid.
// - `bidder` : The address of the account that placed the bid.
// - `amount` : The amount of the bid.
// Requires that `bidder` matches the function caller.
// The owner of the record is set to the entity responsible for running the auction (auction runner).
// The address of the auction runner is aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh.
transition place_bid(bidder: address, amount: u64) -> Bid {
// Ensure the caller is the auction bidder.
console.assert_eq(self.caller, bidder);
// Return a new 'Bid' record for the auction bidder.
return Bid {
owner: aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh,
bidder: bidder,
amount: amount,
is_winner: false,
};
}

Call the place_bid program function with bidder 1 and 10u64 arguments.

leo run place_bid aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke 10u64

Step 2: The Second Bid

Have the second bidder place a bid of 90.

Swap in the private key and address of the second bidder to program.json.

Call the place_bid program function with bidder 2 and 90u64 arguments.

leo run place_bid aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4 90u64

Step 3: Select the Winner

Have the auctioneer select the winning bid.

    // Returns the winning bid.
// - `first` : The first bid.
// - `second` : The second bid.
// Requires that the function caller is the auction runner.
// Assumes that the function is invoked only after the bidding period has ended.
// In the event of a tie, the first bid is selected.
transition resolve(first: Bid, second: Bid) -> Bid {
// Ensure the caller is the auctioneer.
assert_eq(self.caller, aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh);
// Resolve the winner of the auction.
if (first.amount >= second.amount) {
return first;
} else {
return second;
}
}

Swap in the private key and address of the auctioneer to program.json.

Provide the two Bid records as input to the resolve transition function.

leo run resolve "{
owner: aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh.private,
bidder: aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke.private,
amount: 10u64.private,
is_winner: false.private,
_nonce: 4668394794828730542675887906815309351994017139223602571716627453741502624516group.public
}" "{
owner: aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh.private,
bidder: aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4.private,
amount: 90u64.private,
is_winner: false.private,
_nonce: 5952811863753971450641238938606857357746712138665944763541786901326522216736group.public
}"

Step 4: Finish the Auction

Have the auctioneer finish the auction.

    // Returns ownership of the bid to bidder.
// - `bid` : The winning bid.
// Requires that the function caller is the auction runner.
// Assumes that the function is invoked only after all bids have been resolved.
transition finish(bid: Bid) -> Bid {
// Ensure the caller is the auctioneer.
console.assert_eq(self.caller, aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh);
// Return 'is_winner' as 'true' in the winning 'Bid'.
return Bid {
owner: bid.bidder,
bidder: bid.bidder,
amount: bid.amount,
is_winner: true,
};
}

Call the finish transition function with the winning Bid record.

leo run finish "{
owner: aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh.private,
bidder: aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4.private,
amount: 90u64.private,
is_winner: false.private,
_nonce: 5952811863753971450641238938606857357746712138665944763541786901326522216736group.public
}"