ZKDarkPool

_{spec · config}

A sealed-bid batch auction with commit-reveal protocol — also known as a hidden batch auction, encrypted batch auction, or sealed-bid batch auction. This is not a different clearing mechanism from BatchedAuction: the clearing logic is identical (uniform price, maximum volume). The difference is an information-hiding layer: orders are sealed during collection and destroyed after clearing. All BatchedAuction invariants pass unchanged here, confirming they are structurally the same mechanism — privacy adds MEV resistance on top without altering correctness.

This models privacy-preserving DEXs like Penumbra (sealed-bid batch auctions with shielded transactions on Cosmos), Renegade (MPC-based dark pool for on-chain private matching), and partially MEV Blocker / MEV Share (encrypted mempools). The ZKRefinement proof formally confirms that all BatchedAuction invariants carry over — privacy is a pure addition.

sequenceDiagram
    participant T1 as Trader 1
    participant T2 as Trader 2
    participant DP as Dark Pool
    participant ZK as ZK Verifier

    Note over DP: Phase 1: COMMIT

    T1->>DP: sealed buy order (hidden)
    T2->>DP: sealed sell order (hidden)
    Note over T1,T2: Orders invisible to each other<br/>(cryptographic commitments)

    Note over DP: Phase 2: CLEAR

    DP->>DP: reveal & clear at uniform price
    DP->>ZK: prove clearing correctness
    ZK->>DP: ✓ valid

    Note over DP: Phase 3: DONE

    DP->>DP: destroy individual orders
    DP->>T1: your fill: qty @ clearing price
    DP->>T2: your fill: qty @ clearing price

    Note over T1,T2: Only clearing price + fills retained<br/>Individual orders destroyed (post-trade privacy)

Three phases enforce privacy structurally:

1. Commit: traders submit sealed orders — no visibility of others' orders (modeled as nondeterministic choice independent of other orders)
2. Clear: orders revealed, uniform-price batch clearing (same algorithm as BatchedAuction)
3. Done: individual orders destroyed, only clearing price + fills retained (ZK proofs verify correctness)

• Pre-trade privacy: order contents hidden during commit phase
• Commitment binding: orders cannot be modified after commit
• Post-trade privacy: individual orders destroyed after clearing
• MEV elimination: sealed bids + uniform price = zero spread to exploit = sandwich attacks impossible

Verified properties