Lighthouse Auctions
Lighthouse runs on a hybrid architecture that combines off-chain execution with on-chain settlement, balancing performance with security. [Figure 2]
Off-Chain Execution (Lighthouse Server): A dedicated server runs real-time auctions and processes data.
On-Chain Settlement (Lighthouse Chain): Smart contracts manage deposits, withdrawals, and final auction settlement.
Lighthouse Auction Process
Deposit: Searchers deposit tokens into the Lighthouse auction contract. Deposits collateralize bids, ensuring settlement integrity.
Slot Transition & Real-time Auctions:
The following steps run concurrently during each slot:
2-1. Create Auction (Slot N+1): The rollup requests an auction for the next slot; Lighthouse notifies all searchers participating in the rollup’s auction.
2-2. Deliver Bundles (Slot N): Confirmed bundles from the previous Lighthouse auction are submitted to the rollup.
2-3. Fetch Transactions (Slot N): The rollup retrieves the list of user transactions from SBB.
2-4. Broadcast Transactions: The rollup merges Lighthouse bundles with SBB transactions and broadcasts them to all searchers participating in the rollup’s auction, enabling backrunning opportunities for the next auction.
2-5. Include in Mempool (Slot N): Transactions for Slot N are added to the mempool and executed in the defined order.
Simulate Transactions (Private Node): Searchers simulate MEV opportunities on private full nodes using the latest transaction order flow.
Submit Bids: Searchers submit MEV bundles and a
BidMsg, which includes:BidPrice,AuctionNonce,bidderAddress,mevTxHashes, andSignature.Each signature is verified against the bidder’s private key to prevent unauthorized withdrawals.
Auction Close & Settlement (concurrent):
5-1. Order Bundles: After the auction closes, bundles are sorted by descending bid price..
5-2. Simulate Bundles: Bundles are simulated in sequence; only valid bundles are confirmed. Confirmed bundles are forwarded to the rollup for Slot N+1 (via Step 2-2).
5-3. Submit Auction Closed Msg: The Lighthouse contract executes settlement and closes the auction.
Transaction Handling for SBB and Lighthouse
Standalone SBB: Coordinates both user transaction ordering and searcher bundles, optimized for local value capture.
SBB + Lighthouse: SBB manages user transactions, while Lighthouse coordinates cross-market auctions. This expands arbitrage opportunities and supports more advanced trading strategies across interconnected venues.
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