Blockchain-based auctions often utilize smart contracts to automate auction rules, with much research focusing on enhancing privacy and fairness through cryptographic techniques. However, the authenticity of external data input into these systems is frequently overlooked. In particular, rational nodes may manipulate bidding data by submitting false types to maximize their utility, compromising market fairness and the reliability of auction outcomes. The aim of this study is to propose an alternative blockchain-based auction mechanism to incentivize nodes to report types honestly. We propose the Mixed-Node Advertising Auction (MNAA) mechanism for digital advertising auctions on blockchain systems. MNAA integrates quasi-linear and value maximization utility models to design allocation and pricing rules that eliminate nodes’ incentives to misreport their types, ensuring the authenticity of data submitted to the auction. To enhance efficiency, MNAA employs state channel technology and off-chain smart contracts, reducing main chain interactions. Theoretical analysis confirms that MNAA incentivizes truthful behavior and ensures security and correctness. Simulation results show that MNAA outperforms Generalized Second Price (GSP), Mixed Bidders with Private Classes (MPR), and Vickrey–Clarke–Grooves (VCG) auctions in terms of liquid social welfare (LSW), publisher revenue, and allocation efficiency, while also improving the transaction throughput and showing good performance in terms of transaction costs and latency.
Liu et al. (Sat,) studied this question.