A Cryptographically Secured Double Auction Framework for Perishable Agricultural Goods Trading

Abstract

Because of the need for swift, equitable market exchange to reduce spoilage and minimize income losses for smallholder producers, perishable commodities (e.g., fruit and vegetables, livestock products and seafood) are very time-sensitive. The traditional wholesale channels of distribution limit producers to purchasers who are geographically close to them, allowing middlemen to exercise an inordinate amount of pricing leverage. This paper presents a blockchain-based, privacy-aware double auction system developed exclusively for the fresh produce sector. Instead of utilizing fixed posted prices, this system will conduct multiple bidding rounds in which buyers and sellers will be paired using an algorithm that takes market conditions into account, producing real-time results. The integrity and reliability of the auction are secured by a combination of four interlocking cryptographic mechanisms: (1) zero-knowledge succinct non-interactive proofs (zk-SNARKs) are used to verify the validity of bidder prices during the sealed bidding phase without revealing any information (in terms of monetary value) to any party; (2) linked ring signatures hide the identity of individual buyers during the open bidding phase, while providing complete auditability of amounts; (3) a hash-based commit-reveal protocol requires that each submission consists of two parts: (i) a binding commitment of the price, which provides confirmation of the bid; and (ii) a subsequent disclosure, making it mathematically impossible for a buyer to alter a bid after it has been submitted; (4) a behavioural scoring service continually monitors participant behaviour and dynamically updates trust ratings, discouraging non-cooperative or fraudulent behaviour over time.

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