308 / 2024-04-24 11:12:28

Metaverse exchange: The Vickrey-Clarke-Groves auction with scale control and platform escrow

metaverse,VCG auction

As the metaverse expands rapidly, there is an urgent need to design an effective auction mechanism for the exchange of virtual assets within this digital realm. Within the metaverse's virtual economy, the critical role of auctions necessitates a mechanism that aligns the interests of both suppliers and demanders of virtual assets. To ensure a beneficial equilibrium for all parties involved in the metaverse's auction ecosystem, we introduce a novel mechanism that adapts the Vickrey-Clarke-Groves auction, incorporating the scale control approach and the platform escrow mechanism. The platform escrow mechanism allows the platform itself can act as an auction participant on the demand side during the auction process. Thus, agents can entrust their virtual assets to the platform for auction, thereby receiving a VCG-like payment. We have demonstrated that this auction is incentive compatible and individually rational. The introduction of the platform escrow is shown to effortlessly elevate both social welfare and the platform's surplus. Our experimental results show that a mix of scale control and platform escrow schemes can further improve the platform's profit and successful trading ratio. Furthermore, our experimental analysis has confirmed the risks associated with the platform providing mendacious valuations. The results indicate that truthful bidding is almost an optimal strategy for the platform, thus promoting a transparent and beneficial auction environment.