Paper 2025/344

Publicly Verifiable Generalized Secret Sharing and Its Application in Building Decentralized Exchange

Abstract

Generalized secret sharing (GSS), which can offer more flexibility by accommodating diverse access structures and conditions, has been under-explored in distributed computing over the past decades. To address the gaps, we propose the publicly verifiable generalized secret sharing (PVGSS) scheme, enhancing the applicability of GSS in transparent systems. Public verifiability is a crucial property to gain trustworthiness for decentralized systems like blockchain. We begin by introducing two GSS constructions, one based on Shamir's secret sharing and the other on the linear secret sharing scheme (LSSS). Next, we present PVGSS schemes that combine GSS with non-interactive zero-knowledge (NIZK) proofs. Further, we construct a decentralized exchange (DEX) based on PVGSS scheme, where any users can participate in exchanges and engage in arbitrage. Specifically, users can fairly swap ERC-20 tokens with passive watchers, who earn profits by providing arbitration services. The critical property of "fairness" required by the DEX is ensured through a sophisticated access structure, supported by the PVGSS scheme. We provide a comprehensive evaluation on the performance of the PVGSS schemes and the monetary costs for users in the DEX. The results demonstrate the feasibility and practicality of this approach in real-world applications.