Trustless framework for iterative double auction based on blockchain

Abstract

One of the major problems in current implementations of iterative double auction is that they rely on a trusted third party to handle the auction process. This imposes the risk of single point of failures and monopoly. In this paper, we aim to tackle this problem by proposing a novel decentralized and trustless framework for iterative double auction based on blockchain. Our design adopts the smart contract and state channel technologies to enable a double auction process among parties that do not trust each other, while minimizing the blockchain transactions. We provide a formal development of the framework and highlight the security of our design against adversaries.