A step-by-step tutorial for running sealed-bid auctions on Aleo

Explore the world of private auctions on Aleo, where security meets transparency. Here’s a step-by-step guide to conducting a first-price sealed-bid auction using Aleo’s unique features.

Overview: a first-price sealed-bid auction involves bidders submitting bids without knowledge of others’. The highest bid wins. Aleo ensures privacy and fairness through cryptographic techniques.

Advantages of Aleo auction:

1. Unparalleled privacy: Aleo’s use of zero-knowledge proofs ensures that participants can engage in auctions without revealing sensitive information, setting a new standard for privacy in online transactions.
2. Security assurance: With an honest auctioneer and cryptographic protocols in place, Aleo auctions provide a secure environment where participants can trust the integrity of the bidding process.
3. Efficiency and transparency: Aleo’s blockchain architecture streamlines the auction process, making it efficient and transparent. Bidders can engage confidently, knowing that the resolution occurs in a tamper-proof manner.
4. Data minimization: unlike traditional auctions that demand extensive personal information, Aleo’s approach minimizes data exposure. Participants only disclose what is necessary, reducing the risk of identity theft and unauthorized access.

Assumptions:

• Honest auctioneer
• Unlimited bids
• Auctioneer knows bidders
• Bidders may not know each other

Auction flow:

1. Bidding: bidders submit bids.
2. Resolution: auctioneer resolves bids in order.
3. Finishing: the auctioneer concludes, providing the winning bid to the bidder.

Language features:

• Record declarations
• assert_eq
• Record ownership

How to run:

Follow Leo Installation Instructions. Run the auction program using the provided bash script.

cd auction
./run.sh

A Private Auction on Aleo | Welcome to Aleo Documentation

Walkthrough:

Step 0: initializing the auction

• Set up private keys and addresses for Bidder 1, Bidder 2, and Auctioneer.

Step 1: the first bid

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

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

• Bidder 1 places a bid of 10u64.

leo run place_bid aleo1yzlta2q5h8t0fqe0v6dyh9mtv4aggd53fgzr068jvplqhvqsnvzq7pj2ke 10u64

Step 2: the second bid

• Swap in the private key of the second bidder to .env.

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

• Bidder 2 places a bid of 90u64.

leo run place_bid aleo1esqchvevwn7n5p84e735w4dtwt2hdtu4dpguwgwy94tsxm2p7qpqmlrta4 90u64

Step 3: select the winner

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

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

• Auctioneer selects the winning bid.

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

• Auctioneer finishes the auction.

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

Check my example:

GitHub - colliseum2006/Aleo-Auction-Leo: A first-price sealed-bid auction (or blind auction)

Conclusion:

Congratulations! You’ve successfully run a private auction on Aleo. Experiment with different accounts using aleo.tools for a hands-on experience.

Explore the tutorial, embark on the journey of private auctions with Aleo, and witness firsthand the transformation of digital transactions into a realm of privacy and security. Aleo’s commitment to revolutionizing online interactions sets the stage for a future where privacy is not just a feature but a fundamental right.

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Prepared by Colliseum