auction

A first-price sealed-bid auction in Leo.

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

How to Run

Follow the Leo Installation Instructions.

This auction program can be run using the following bash script. Locally, it will execute Leo program functions to conduct, bid, and close a three party auction.

cd auction
./run.sh

The .env 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 field in .env to the appropriate value. You can check out how we've set things up in ./run.sh for a full example of how to run the program as different parties.

Walkthrough

• Step 0: Initializing the Auction
• Step 1: The First Bid
• Step 2: The Second Bid
• Step 3: Select the Winner

Step 0: Initializing the Auction

The three parties we'll be emulating are as follows:

First Bidder Private Key:  
APrivateKey1zkpG9Af9z5Ha4ejVyMCqVFXRKknSm8L1ELEwcc4htk9YhVK
First Bidder Address: 
aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke

Second Bidder Private Key:
APrivateKey1zkpAFshdsj2EqQzXh5zHceDapFWVCwR6wMCJFfkLYRKupug
Second Bidder Address:
aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4

Auctioneer Private Key:
APrivateKey1zkp5wvamYgK3WCAdpBQxZqQX8XnuN2u11Y6QprZTriVwZVc
Auctioneer Address:
aleo1fxs9s0w97lmkwlcmgn0z3nuxufdee5yck9wqrs0umevp7qs0sg9q5xxxzh

Step 1: The First Bid

Have the first bidder place a bid of 10.

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

echo "
NETWORK=testnet3
PRIVATE_KEY=APrivateKey1zkpG9Af9z5Ha4ejVyMCqVFXRKknSm8L1ELEwcc4htk9YhVK
" > .env

Call the place_bid program function with the first bidder 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 of the second bidder to .env.

echo "
NETWORK=testnet3
PRIVATE_KEY=APrivateKey1zkpAFshdsj2EqQzXh5zHceDapFWVCwR6wMCJFfkLYRKupug
" > .env

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

leo run place_bid aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4 90u64

Step 3: Select the Winner

Have the auctioneer select the winning bid.

Swap in the private key of the auctioneer to .env.

echo "
NETWORK=testnet3
PRIVATE_KEY=APrivateKey1zkp5wvamYgK3WCAdpBQxZqQX8XnuN2u11Y6QprZTriVwZVc
" > .env

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

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
}"

Congratulations! You've run a private auction. We recommend going to aleo.tools to generate new accounts and trying the same commands with those addresses.