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Restructured from flat .tex/.pdf files into per-paper subdirectories. Added Antje Worring as co-author on all papers. Synced PDFs to pdfs/ for download site.
63 lines
2.7 KiB
TeX
63 lines
2.7 KiB
TeX
\section{Practical Applications}
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\label{sec:applications}
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\subsection{Encrypted Orderbook (Dark Pool)}
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A dark pool is a trading venue where orders are not visible to other participants
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until matched. On a transparent blockchain, orderbook entries are publicly visible,
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enabling front-running and sandwich attacks. FHE eliminates this:
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\begin{enumerate}[leftmargin=2em]
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\item \textbf{Order submission}: Trader encrypts $(price, quantity, side)$ under
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the matching engine's public key and submits the ciphertext on-chain.
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\item \textbf{Matching}: The smart contract performs encrypted comparisons:
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$\textsf{FHE.GTE}(\textsf{ct}_{\text{bid}}, \textsf{ct}_{\text{ask}})$.
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Matched orders produce an encrypted execution price.
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\item \textbf{Settlement}: Only matched counterparties receive decryption keys
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for their specific trades. Unmatched orders remain encrypted and invisible.
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\end{enumerate}
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This construction satisfies Regulation ATS requirements for fair access and
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confidential order handling, as the matching engine operates on encrypted data
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without ever observing plaintext order flow.
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\subsection{Private Governance Voting}
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On-chain governance typically uses transparent voting, which enables:
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\begin{itemize}[leftmargin=2em]
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\item Vote buying (verifiable votes can be sold)
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\item Strategic last-minute voting (seeing the tally before voting)
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\item Social pressure (publicly visible individual votes)
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\end{itemize}
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FHE voting:
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\begin{enumerate}[leftmargin=2em]
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\item Each voter encrypts their vote $(0 \text{ or } 1)$ under the governance
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contract's public key.
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\item The contract homomorphically adds all encrypted votes:
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$\textsf{ct}_{\text{tally}} = \sum_i \textsf{ct}_{\text{vote}_i}$.
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\item At the end of the voting period, a threshold decryption (requiring $t$-of-$n$
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governance committee members) reveals only the final tally, not individual
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votes.
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\end{enumerate}
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\subsection{Sealed-Bid Auctions}
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Sealed-bid auctions (first-price, second-price/Vickrey) require that bids remain
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secret until the reveal phase. FHE enables this without a trusted auctioneer:
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\begin{enumerate}[leftmargin=2em]
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\item Bidders encrypt their bids under the auction contract's public key.
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\item The contract computes $\textsf{FHE.Max}(\textsf{ct}_1, \ldots, \textsf{ct}_n)$
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using a sorting network of encrypted comparisons.
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\item For Vickrey auctions, the contract computes the second-highest bid
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homomorphically.
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\item The winner is notified via threshold decryption of a per-bidder indicator
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ciphertext.
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\end{enumerate}
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%% ========================================================================
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%% 7. PERFORMANCE
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%% ========================================================================
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