Sealed-bid auctions where the bids are actually sealed

What this enables

• →Economically optimal auctions on-chain. Vickrey (second-price sealed-bid) is the gold standard of auction theory - bidding your true value is dominant strategy, allocations are efficient, revenue is fair. Known since 1961 but never deployable on-chain because sealed bids were impossible without a trusted auctioneer. STRK20 makes them native.
• →NFT auctions without sniping or manipulation. Bots sniping last-second bids? Irrelevant when all bids are submitted before the deadline. Wash bidding? Now requires actually locking funds and being the second-highest bidder. Whale intimidation? Impossible - nobody sees anyone else's bid.
• →DAO grant allocation that ends anchoring. Projects submit sealed funding requests; the DAO reveals simultaneously and funds from the lowest ask. No anchoring on Project A's number when Project B writes theirs. No social pressure, no gaming.
• →Protocol parameter auctions. Block space, sequencer priority, MEV-style auctions allocated by sealed-bid Vickrey instead of speed-based first-come-first-served. The fastest bot stops winning; the highest-value buyer does.
• →Institutional M&A and RWA. Real estate, business acquisitions, art - all conducted via sealed-bid auctions in traditional finance. Bringing them on-chain requires actually-sealed bids, not commit-reveal with griefing risk.

What you build

An auction protocol with three phases: listing (auctioneer creates parameters), bidding (bidders submit encrypted notes - real escrowed funds, not just commitments), reveal (selective disclosure of bid amounts via viewing key material - revealed amounts must match the encrypted notes, or the bid is forfeit). Force-reveal via threshold auditing if a bidder goes offline. Support first-price, Vickrey, and multi-unit variants on the same contract.

Why this isn't just commit-reveal

| Approach | Problem | | --- | --- | | Commit-reveal | Bidders grief by not revealing. Timing leaks info. Gas friction. | | Timelock encryption | Trusted timelock servers. Approximate decryption time. | | Threshold MPC | Committee can collude. Setup ceremony is complex. | | Trusted auctioneer | Server sees everything. No improvement over off-chain. | | STRK20 encrypted notes | Real locked funds, no trusted party, no committee, no timing assumption. |