Source-linked AI summary
On SSI-based Private Decentralized Bidding
Andreea Elena Drăgnoiu, Nicoleta Dumitru, Ruxandra F. Olimid
TL;DR
Decentralized private bidding preserves bid secrecy but lacks a trusted mechanism for verifying bidder eligibility. The paper proposes an SSI-based blockchain framework using credentials and zero-knowledge proofs to certify eligibility while preserving privacy. It presents a general framework, compares it with classical private bidding, and examines relevant properties.
Problem
Blockchain-based private bidding can keep bids secret but lacks a mechanism to verify bidder eligibility without reintroducing a Trusted Third Party.
Method
The paper defines an SSI-based private-bidding framework in which smart contracts interact with requestors and bidders using certified attributes from VCs/VPs.
Results
The analysis compares the SSI-based and general private-bidding frameworks across classes of properties.
Takeaways & Limitations
SSI adds active eligibility verification and selective disclosure while retaining decentralized control over identity and bid-related data.
Abstract
from arXiv · showhide
Private bidding is a process in which participants submit sealed bids, ensuring that their content remains hidden from other bidders during the bidding window. This is essential in competitive environments to ensure a fair and independent evaluation of all proposals. While (public) blockchain enables decentralized bidding and its transparency offers advantages such as public verifiability, without a Trusted Third Party (TTP), current methods struggle to verify whether a bidder is eligible. We propose a framework that leverages Self-Sovereign Identity (SSI) to address these issues by certifying the bid's eligibility and authenticity using the now-established SSI framework. To allow participants to prove they meet the requirements while keeping their bids secret, our model uses Verifiable Credentials (VCs) and cryptographic primitives such as Zero-Knowledge Proofs (ZKPs).
I. INTRODUCTION
The paper focuses on one-time sealed bidding for decentralized proposal selection, using blockchain for immutable, rule-based evaluation while addressing eligibility verification and bid confidentiality.
- Bidding selects among competing proposals through one-time sealed submissions evaluated against fixed criteria, without iterative interaction or negotiation.
- Unlike auctions, bidding does not involve multiple rounds, real-time feedback, or sequential price adjustments.
- Blockchain records bids immutably and enables smart contracts to automate evaluation and winner selection under predefined rules.
- Classical decentralized commit-reveal bidding cannot enforce bidder eligibility without a Trusted Third Party because anyone can submit a commitment.
B. Novelty and Contributions
The paper introduces SSI-based private bidding as a general framework, compares it with existing decentralized private bidding, and evaluates their supported properties.
- The paper proposes a general framework for private bidding based on Self-Sovereign Identity.
- The proposed framework is compared with the existing general framework for private bidding.
- The analysis examines whether various property classes are satisfiable within the two frameworks.
C. Outline
The paper proceeds from related work and SSI foundations to classical and SSI-enhanced blockchain bidding, comparative property analysis, discussion, and conclusions.
- Section II discusses related work, and Section III introduces Self-Sovereign Identity.
- Section IV presents classical and SSI-enhanced blockchain frameworks for private bidding.
- Sections V–VII cover property comparisons, discussion, and conclusions.
II. RELATED WORK
Prior blockchain bidding protocols use varied privacy, interaction, hardware, and trust assumptions, but none combines private bidding with SSI capabilities.
- Existing protocols use MPC, TEEs, semi-trusted auctioneers, or other mechanisms with reported interaction, hardware, efficiency, fund-verification, sealed-bid, or collusion limitations.
- The reviewed literature does not combine private bidding with SSI capabilities.
- A fund-binding protocol hides bid and maximum-bid values while proving sufficient funds through indistinguishable Ethereum transactions and DECO.
III. SELF-SOVEREIGN IDENTITY (SSI)
SSI gives individuals control over identity data through a decentralized, privacy-preserving model. Its ecosystem uses issuers, holders, verifiers, VCs, and VPs to share authentic information selectively.
- SSI empowers individuals to control their identities while supporting privacy-preserving, context-dependent data sharing.
- The SSI ecosystem comprises holders, Authorities that issue signed assertions, and verifiers that validate them against a VDR.
- VCs are tamper-evident, issuer-signed claims, typically stored off-chain and used to generate VPs for verification.
- VPs let holders share only the information necessary for a context while keeping other private data secure and verifiable across platforms.
IV. PRIVATE DECENTRALIZED BIDDING FRAMEWORKS
The paper reviews blockchain-based private bidding and proposes an SSI-based framework that applies self-sovereignty to this established bidding model.
- The paper first discusses the general blockchain-based private bidding framework and then proposes an SSI-based framework using self-sovereignty.
- The proposed framework is designed to make use of the established SSI framework’s advantages in private bidding.
A. General Private Bidding (on Blockchain)
General private bidding uses a smart contract on a public blockchain to coordinate sealed submissions, preserve bid confidentiality during commitment, and select a winner after reveal.
- The framework comprises a requestor, multiple bidders, and a smart contract governing their interactions on a public blockchain.
- Public blockchain supports open participation and transparent, publicly verifiable execution without requiring prior approval from the requestor.
- The requestor deploys immutable contract logic encoding eligibility rules, evaluation criteria, bidding timing, and autonomous execution.
- Bidders submit independently without visibility into one another’s submission values during the process.
- A bid may contain one or more values, and the winning bid best satisfies the stated requirements, with winners paying the clearing price.
- The protocol proceeds through deployment, commitment, and reveal phases, with the contract opening the bidding window, recording commitments, verifying revealed values, and announcing the winner.
B. SSI-based Private Bidding (on Blockchain)
SSI-based private bidding adds cryptographic eligibility and identity verification to commit-reveal bidding. Bidders prove eligibility with selectively disclosed credentials, submit private commitments and proofs, and the contract selects a verifiable winner.
- Bidders use authority-issued VCs attesting identity, certifications, financial capacity, or eligibility to participate without centralized validation during bidding.
- The SSI-based protocol retains three sequential phases while adding eligibility enforcement at the smart-contract verifier level.
- Before bidding, each bidder constructs and signs a VP from one or more VCs, with selective disclosure hiding unnecessary attributes.
- After eligibility confirmation, bidders submit commitments to bid values and may attach ZKPs showing compliance with range or format rules without revealing exact data.
- The smart contract stores only bid commitments and proofs that pass validation, rather than sensitive bidder information or plaintext bid values.
- Winner selection publishes only the winner’s identifier and clearing price, using privacy-preserving mechanisms while maintaining result verifiability.
- Compared with general bidding, the SSI-based model actively verifies eligibility before recording bids instead of relying mainly on blockchain record keeping.
- The threat model includes passive honest-but-curious parties and active malicious bidders capable of adaptive bidding, VP impersonation, and coalition formation.
V. PROPERTIES
The section evaluates properties of general and SSI-based private bidding frameworks. These properties are grouped by privacy, identity, governance, security, performance, correctness, and verifiability.
- Table I compares property satisfaction for the general private bidding framework and the SSI-based framework.
- The properties cover Privacy & Data Protection, Identity, and Trust & Governance.
- The comparison also covers Security & Performance and Correctness & Verifiability.
VI. DISCUSSION
The SSI-based framework addresses eligibility, identity, trust, and privacy limitations in general private bidding. It uses zero-knowledge proofs, selective disclosure, and established SSI standards while integrating blockchain and cryptographic tooling.
- Zero-knowledge proofs verify that a bidder owns the funds needed to pay the clearance price.The proof is represented through a Verifiable Credential or Verifiable Presentation.
- SSI-based identification preserves decentralization and self-sovereignty while allowing bidders to disclose only eligibility-relevant attributes.
- Removing the need for a Trusted Third Party increases system trust, while selective disclosure supports data protection and unlinkability.
- The established and standardized SSI framework could provide a standardized method for certifying bids and facilitate adoption.
- An implementation can combine SSI frameworks, blockchain infrastructure, digital wallets, backend services, and cryptographic tools.Suggested components include W3C standards, Hyperledger Aries, Indy or Veramo, and tools such as Circom, snarkjs, or ZoKrates.
VII. CONCLUSIONS
The paper proposes an SSI-based blockchain bidding framework and argues that it improves privacy, security, verifiability, trust, identity management, and standardization. The work remains a framework-level proposal, with prototypes and deeper technical evaluation left for future work.
- The proposed framework integrates SSI features into a general blockchain-based bidding system.
- The analysis reports stronger security guarantees and simpler identity and eligibility verification while preserving privacy and selective disclosure.
- SSI adds standardization because the field is established and its adoption is defined by current regulations.
- The current work is limited to defining the framework and informally discussing benefits and implementation considerations.A prototype and more detailed treatment of tools and cryptographic primitives are identified as future work.