A Blockchain-based Iterative Double Auction Protocol using Multiparty State Channels

Current implementations of iterative double auction rely on a trusted third-party to handle the auction process. This imposes the risk of single point of failures and monopoly. We tackle this problem by proposing a novel decentralized and trustless blockchain-based framework for iterative double auction. Our design extends the state channel technologies to enable a double auction process among trading parties, while minimizing the blockchain transactions. Then we provide a formal development of the framework and prove its security against adversaries. Finally, we develop a proof-of-concept implementation of our framework, on which we conduct experiments to demonstrate its feasibility and practicality.

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