Blockchain-Driven Optimistic Fair Exchange Based on PVSS and zkSNARKs

Achieving a fair exchange between two mutually distrusting parties presents significant obstacles. The involvement of trusted third parties is often essential to ensure fairness in such exchanges. In this paper, we propose a blockchain-driven optimistic fair exchange protocol based on publicly verifiable secret sharing (PVSS) and zero-knowledge succinct non-interactive arguments of knowledge (zkSNARKs). In our solution, arbiters, i.e., PVSS shareholders, serve as decentralized trusted third parties, registering on smart contracts with both autonomy and accountability. We assume a majority of arbiters are honest, ensuring that adversaries cannot successfully collude and that the fairness of the exchange protocol is upheld. In cases where both exchange parties are honest, the involvement of arbiters is unnecessary, making the fair exchange protocol optimistic. Additionally, we leverage zkSNARKs to generate non-interactive zero-knowledge (NIZK) proofs that ensure the correctness of the exchanged data. As a result, the exchange protocol is publicly verifiable without revealing any information about the exchanged data. In abnormal cases where arbiters are involved, a threshold number of them can fairly resolve the dispute between the seller and the buyer, and earn digital assets as a reward. In addition to fairness, optimism, and public verifiability, the proposed protocol also ensures completeness, termination, and privacy. Finally, we conduct experiments to illustrate the correctness and feasibility of the optimistic fair exchange protocol.