Sealed-Bid Batch Auction

A sealed-bid batch auction is an on-chain settlement process in which multiple trades or intents are collected within a fixed time window (“batch”). Each solver submits a commit (i.e., a hash of their proposed solution) off-chain or on-chain, then later reveals the full details of their bid. The system picks the best solution and settles it atomically, ensuring fair competition and minimal front-running.

Transaction Settlement Process

1. Intent Submission & Batch Window Collection

• Intent Submission: Users sign and submit requests, such as trades or yield flows, within a predetermined batch window (e.g., N blocks).

• Visibility: Solvers can see user intents within the batch but not the specific solutions proposed by others.

• Storage: Intents are stored either off-chain or in a minimal on-chain structure for reference.

2. Commit Phase

• Hashing & Commitment: Solvers compute and hash details about the routes, fees, and constraints.

• No Copying: Only the hash is submitted, ensuring competitors cannot see specific fees or routes.

• Storage of Minimal Data: Ensures reduced on-chain data usage.

3. Reveal Phase

• Disclosure: After the commit deadline, solvers reveal the details of their solutions previously committed.

• Comparison: Solutions are evaluated based on fees, slippage, and yield outcomes.

• Best Bid Selection: Routes with the lowest fee or highest user value are chosen.

4. Atomic On-Chain Execution & Settlement

• Transaction Finalization: The entire batch is finalized in one transaction.

• Atomicity: If any step fails, such as a loss of liquidity, the transaction reverts entirely.

• Batch Settlement: Aggregation of multiple trades reduces on-chain interactions, optimizing gas costs.

Optimized Blockchain Operations

Security & Front-Running Mitigation

• No Early Reveal: The commit-reveal process prevents solvers from front-running or copying others' solutions, ensuring fairness.

• Gas & Cost Efficiency: The transaction either succeeds or reverts entirely, eliminating partial executions.

Fee Distribution

• Reward for Winning Solver: The selected solver collects a fee, and users benefit from minimized gas fees, as settlement covers multiple trades.

By adhering to these structured phases, the system ensures efficient, secure, and cost-effective transaction settlement on the blockchain.