Midnight Sealed-Bid: Private Auction Protocol

[Proposal setup] Proposal title

Please provide your proposal title

Midnight Sealed-Bid: Private Auction Protocol

[Proposal Summary] Time

Please specify how many months you expect your project to last

3

[Proposal Summary] Translation Information

Please indicate if your proposal has been auto-translated

No

Original Language

en

[Proposal Summary] Problem Statement

What is the problem you want to solve?

Public auctions on Cardano face front-running, sniping, and price anchoring. Lack of bid privacy exposes user balances, discouraging high-net-worth participation.

[Proposal Summary] Project Dependencies

Does your project have any dependencies on other organizations, technical or otherwise?

No

Describe any dependencies or write 'No dependencies'

No dependencies

[Proposal Summary] Project Open Source

Will your project's outputs be fully open source?

Yes

Please provide here more information on the open source status of your project outputs

All project outputs, including the Midnight Compact smart contracts, React frontend code, and ZK-proof generation scripts, will be fully open-source under the MIT License. The code will be hosted on a public GitHub repository, accessible from day one. We encourage the community to fork, review, and use our code as a reference implementation for building privacy-preserving dApps on Midnight.

[Theme Selection] Theme

Please choose the most relevant theme and tag related to the outcomes of your proposal

Smart Contracts

[Campaign Category] Category Questions

What is useful about your DApp within one of the specified industry or enterprise verticals?

This DApp addresses the "RealFi" and "High-Value Asset Trading" verticals. In traditional finance and high-end auctions (e.g., real estate, art), sealed bids are standard to prevent manipulation. By enabling this on-chain via Midnight, we unlock use cases for enterprise procurement and private NFT sales where participants demand confidentiality to prevent market signaling.

What exactly will you build? List the Compact contract(s) and key functions/proofs, the demo UI flow, Lace (Midnight) wallet integration, and your basic test plan.

1. Compact Contract: A "SealedAuction" contract with state management for 'BiddingOpen' and 'BiddingClosed'.

Key Functions: 'commit_bid(encrypted_amount)', 'finalize_auction()'.

ZK Circuit: A circuit to prove 'bid_A > bid_B' and identify the winner without revealing raw values.

2. UI Flow: A Next.js web app where users connect the Lace wallet, view active auctions, and submit encrypted bids.

3.Test Plan: We will implement unit tests for the Compact logic using the Midnight Devnet harness and perform end-to-end manual testing of the bidding lifecycle.`

How will other developers learn from and reuse your repo? Describe repo structure, README contents, docs/tutorials, test instructions, and extension points. Which developer personas benefit, and how will you gauge impact (forks, stars, issues, remixes)?

The repo will follow a standard structure: '/contracts' (Compact code), '/frontend' (React), and '/scripts' (Deployment).

README: Step-by-step guide to setting up a local Midnight Devnet and deploying the contract.

Tutorial: A "Walkthrough" document explaining how the ZK-proof for the highest bid is constructed.

Extension Points: Code comments will highlight where to add features like "Whitelisting" or "Multi-asset bidding" for devs who want to fork it.`

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Our solution is a Dual-Layer Application.

**1. The Privacy Layer (Midnight): **Handles the business logic of the auction. Users submit bids that are encrypted client-side. The ledger records the commitment but hides the value. The smart contract mathematically verifies the highest bid.

**2. The Settlement Layer (Cardano): **Represents the asset. (For this POC, we will simulate the asset locking mechanism if the Bridge is not fully live). This ensures that while the final ownership transfer is public and verifiable, the negotiation process (bidding) remains strictly private.`

[Your Project and Solution] Impact

Please define the positive impact your project will have on Midnight ecosystem

This project accelerates the Midnight ecosystem by providing a functional, open-source reference implementation of "Private State" management. It proves to developers that Midnight can handle competitive logic (comparing private values) securely. It fills the gap for privacy-centric DeFi tools, attracting users from traditional finance who require confidentiality.

[Your Project and Solution] Capabilities & Feasibility

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

We are Blockchain Developers with experience in the Cardano ecosystem (Plutus/Aiken/TypeScript).

Trust & Accountability: I commit to open-sourcing all code under the MIT license and providing regular progress updates via video demos.

Feasibility Validation: I have already reviewed the Midnight Compact documentation and Devnet examples. The project scope is strictly limited to a MVC (Core Logic + Basic UI) to ensure delivery within the 3-month timeline and budget.

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

Total Requested: 8,000 USDM

Backend Development (4,000 USDM): Research Compact SDK, write smart contract logic, implement ZK proofs (approx. 120 hours).

Frontend Development (2,400 USDM): Build UI, integrate Lace Wallet API, handle client-side encryption (approx. 50 hours).

Documentation & Project Management (1,600 USDM): Create video demo, write technical tutorials, and manage reporting.

[Final Pitch] Value for Money

How does the cost of the project represent value for the Midnight ecosystem?

This proposal asks for the maximum category cap (8k) but delivers high value by creating a reusable "Primitive" (Auction Logic). Instead of a closed-source product, the community gets a free educational resource. This reduces the learning curve for future developers, saving the ecosystem hundreds of hours of R&D time. It is a low-risk investment for a fundamental building block of DeFi.

[Self-Assessment] Self-Assessment Checklist

I confirm that the proposal clearly provides a basic prototype reference application for one of the areas of interest.

Yes

I confirm that the proposal clearly defines which part of the developer journey it improves and how it makes building on Midnight easier and more productive.

Yes

I confirm that the proposal explicitly states the chosen permissive open-source license (e.g., MIT, Apache 2.0) and commits to a public code repository.

Yes

I confirm that the team provides evidence of their technical ability and experience in creating developer tools or high-quality technical content (e.g., GitHub, portfolio).

Yes

I confirm that a plan for creating and maintaining clear, comprehensive documentation is a core part of the proposal's scope.

Yes

I confirm that the budget and timeline (3 months) are realistic for delivering the proposed tool or resource.

Yes

[Required Acknowledgements] Consent & Confirmation

I Agree

Yes