Paper: arXiv 2611.16495

Authors: Michele Fabi, Baptiste Leloup

Abstract

We implement privacy-preserving local electricity exchanges using an automated market maker on the Hyperledger Besu network under QBFT consensus. The proposed protocol operator collects individual electricity positions off-chain and publishes aggregate supply and demand on the blockchain, where smart contracts compute market prices every fifteen minutes. Individual positions remain off-chain; Poseidon2 commitments and UltraHonk zeroknowledge proofs, generated from Noir circuits, verify aggregation, payments, and daily balance updates. The architecture retains community coordination while making financial execution independently auditable. Signed receipts and member-triggered recourse prevent unverified or partial settlement. In a ten-household experiment using simulated US residential profiles, daily settlement uses approximately 19 million gas and produces eight-member proofs in 2.4 seconds. Over four simulated days, local trading covers 34.4% of demand and reduces grid-only costs by 30.5% under assumed tariffs. Numerically computed __-Nash Equilibrium electricity profiles capture 83-88% of the social planner surplus.

Complexity vs Empirical Score

  • Math Complexity: 7.0/10
  • Empirical Rigor: 8.0/10
  • Quadrant: Holy Grail — high math complexity, high empirical rigor

Why this score: The paper presents a robust technical solution for local energy markets, combining advanced cryptographic proofs with a practical, deployed architecture. Its empirical evaluation, though simulated, is thorough and provides strong evidence of feasibility and economic benefits. The novelty lies in the verifiable settlement mechanism using ZKPs on a blockchain for energy markets.

Research Flowchart

  flowchart TD
    A[Research Goal: Verifiable & Privacy-Preserving Local Energy Settlement] --> B{Key Methodology: Privacy-Preserving Energy Exchange Protocol};
    B --> C[Data/Inputs: Simulated US Residential Profiles, Off-Chain Individual Positions, Assumed Tariffs];
    C --> D{Computational Processes: Automated Market Maker, Poseidon2 Commitments, UltraHonk ZKP from Noir Circuits, QBFT Consensus};
    D --> E[Key Findings:
        - Daily settlement: ~19M gas, 8-member proofs in 2.4s
        - Local trading covers 34.4% demand, reduces grid costs by 30.5%
        - Epsilon-Nash Eq. profiles capture 83-88% social planner surplus
    ];

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0 of 34 cited works are in the corpus; resolved via arXiv source bundles, Semantic Scholar and OpenAlex. Corpus-wide: 2570 linked papers.