Commit and Reveal Schemes

Transparency is a fundamental feature of public blockchain networks. While this openness ensures auditability and trust, it introduces challenges for applications that rely on temporary secrecy to function fairly. In a fully transparent ledger, any observer can see pending transactions in the memory pool before they are confirmed. This visibility allows malicious actors to exploit information asymmetry, disrupting the intended mechanics of decentralized applications.

The commit and reveal scheme is a cryptographic solution designed to address this tension between transparency and necessary secrecy. It allows a user to lock in a choice or value without disclosing it to the network immediately. Only after a specific condition is met or a timeframe has passed does the user reveal the original information. This mechanism ensures that participants cannot change their decisions based on the actions of others, effectively mimicking the security of a sealed envelope in a digital environment. By separating the submission of intent from the disclosure of data, developers can build fairer, more secure systems for decentralized finance, gaming, and governance.

Core Concept: What is Commit and Reveal?

A commit and reveal scheme is a method for proving that a specific piece of information was known at a certain time without disclosing the information itself until later. This is essential in adversarial environments where knowing an opponent's move or a competitor's bid could provide an unfair advantage. The process relies on cryptographic hashing, which transforms input data into a fixed-size string of characters that acts as a digital fingerprint. Because hashing is a one-way function, it is computationally infeasible to reverse-engineer the original input from the hash alone.

To visualize this, consider a sealed-bid auction in the physical world. If bidders shouted their offers out loud, late participants could simply offer one dollar more than the highest previous bid. Instead, bidders place their written offers into sealed envelopes. The auctioneer collects all envelopes (the commitment) before opening them simultaneously (the reveal). The commitment ensures the bid cannot be changed, while the seal ensures it cannot be seen.

In a blockchain context, the envelope is the cryptographic hash stored onchain. The smart contract acts as the impartial auctioneer, holding the commitments until the reveal phase begins. This pattern is critical for maintaining integrity in systems where the order of operations or the content of a transaction matters significantly. Without such protections, the inherent transparency of the blockchain would render many competitive or strategic applications vulnerable to manipulation.

The Mechanics: How the Two-Phase Process Works

The implementation of a commit and reveal scheme involves two distinct interactions with a smart contract. These phases are strictly ordered to ensure that information remains hidden during the critical window of opportunity.

The first step is the Commit Phase. In this phase, the user selects their value, such as a vote choice or a bid amount. The user also generates a random secret, often referred to as a "salt." The user concatenates their value with this salt and passes the result through a cryptographic hash function. The resulting hash is submitted to the smart contract. The inclusion of the salt is vital because it increases the entropy of the input. Without a salt, an attacker could easily guess the value by hashing all likely inputs, such as "Yes" or "No", and comparing them to the committed hash. The smart contract stores this hash but has no knowledge of the actual value or the salt.

The second step is the Reveal Phase. Once the commitment period is closed, the user submits a second transaction containing the original value and the secret salt. The smart contract takes these inputs, hashes them exactly as the user did, and compares the result to the stored commitment. If the hashes match, the contract accepts the value as valid. If the user attempts to change their value or salt, the hashes will not align, and the transaction will be rejected. This verification process mathematically guarantees that the data revealed is identical to the data committed, ensuring the user did not alter their choice after observing other participants.

Solving the Front-Running Problem

Front-running is a prevalent issue in decentralized systems, often worsened by the public nature of the memory pool where unconfirmed transactions reside. Maximum Extractable Value (MEV) bots and malicious validators can monitor this pool for profitable opportunities. For example, if a user attempts to buy a large amount of a token, a bot might detect the pending transaction and insert its own buy order immediately before it, driving up the price before the user's trade executes.

Commit and reveal schemes effectively neutralize specific types of front-running by decoupling the intent from the execution. When a user submits a commitment hash, the content of their transaction is obfuscated. A front-runner observing the memory pool sees only a string of random characters. They cannot determine whether the user is buying, selling, voting, or bidding, nor can they discern the magnitude of the action. By the time the user reveals the information, the period for commitment has typically ended, making it impossible for the adversary to insert a reactive transaction that could influence the outcome.

This protection is particularly valuable in decentralized exchanges and high-stakes NFT mints. While it does not solve all forms of MEV, it significantly raises the difficulty for attackers. They are forced to operate blindly during the commitment phase, removing the informational advantage they typically hold in a transparent ledger environment.

Key Use Cases in Web3

The utility of commit and reveal extends across various sectors of the blockchain ecosystem, providing a foundational layer of fairness for interactive applications.

Sealed-Bid Auctions are a primary use case. In open auctions on a public ledger, bid sniping, placing a slightly higher bid at the very last second, is a common problem. Commit and reveal allows for blind auctions where all participants submit their encrypted bids within a specific window. Since no one knows the value of competing bids, participants are incentivized to bid their true valuation rather than trying to game the system. This structure is frequently used for domain name services and high-value NFT sales.

Onchain Governance also benefits significantly. In traditional onchain voting, early voters can influence the decisions of later participants, leading to a "herding" effect where users simply follow the majority or the choice of a prominent whale. By keeping votes hidden until the end of the voting period, commit and reveal ensures that each participant acts independently, leading to outcomes that more accurately reflect the community's collective sentiment.

Blockchain Gaming relies on this pattern to enable mechanics that require imperfect information. In a game like Rock-Paper-Scissors or Poker, revealing a move instantly would make the game unplayable on a public ledger. Players commit to their moves securely, and the smart contract resolves the winner only after all players have revealed their hands. This allows developers to build strategy games that require bluffing and hidden tactics.

Limitations and Security Considerations

While commit and reveal schemes provide strong security properties, they introduce friction and specific attack vectors that developers must mitigate. The most significant drawback is the impact on user experience. The process requires users to perform two separate onchain transactions, doubling the gas costs and requiring the user to remain online or return to the application at a later time. If a user commits but forgets to reveal, their action is effectively voided, which can be critical in financial scenarios.

A major security challenge is the "last revealer" problem. In a multi-party scenario, the last person to reveal their value has the advantage of seeing everyone else's revealed values first. If the outcome is unfavorable, for example, if revealing their hand causes them to lose a bet, they may choose to withhold their revelation transaction entirely. While they cannot change their committed value, they can stall or abort the process to avoid a loss.

To counter this, protocols often implement collateral requirements or penalties. Users must deposit funds along with their commitment. If they fail to reveal within the designated window, their deposit is slashed or forfeited to the other participants. This economic incentive ensures that users complete the protocol even if the outcome is not in their favor, aligning individual incentives with the system's integrity.

Role of Chainlink

While commit and reveal is a powerful primitive, the friction of multi-step transactions can be a barrier to adoption. The Chainlink platform provides advanced infrastructure that solves the underlying problems of fairness and randomness without necessarily requiring manual commit and reveal schemes for every interaction.

For applications requiring unpredictable outcomes, such as gaming or lottery draws, the Chainlink Runtime Environment (CRE) powers verifiable randomness solutions. Instead of relying on a slow user-driven commit and reveal process, developers can use CRE to orchestrate randomness that is generated and verified offchain before being delivered onchain. CRE ensures that the random values cannot be tampered with or predicted by the oracle nodes or the consuming contract. This provides the same security guarantees as a commit and reveal scheme, preventing look-ahead attacks, but completes the process in a single request, significantly improving the user experience.

Additionally, for financial applications where data latency creates front-running opportunities, Chainlink Data Streams provides a high-frequency, pull-based oracle solution. By delivering sub-second market data updates with cryptographic verification, Data Streams reduces the arbitrage window that often necessitates complex commitment schemes. By using the Chainlink data standard and the orchestration capabilities of CRE, developers can build fair, tamper-resistant applications that maintain the interactivity users expect from modern software.

The Future of Onchain Fairness

As blockchain applications scale to accommodate traditional capital markets and complex decentralized organizations, the need for transaction privacy and fairness becomes increasingly critical. Commit and reveal schemes remain a fundamental tool in the developer's arsenal, offering a proven method to secure intent in a transparent environment. However, as the ecosystem matures, the complexity of these schemes is likely to be abstracted away by more sophisticated infrastructure.

Innovations in oracle networks and transaction sequencing are paving the way for a user experience that retains the security of commit and reveal without the manual overhead. By using robust standards for randomness and fair ordering, the next generation of smart contracts will be able to offer the seamless interactivity of Web2 while maintaining the trustless guarantees of Web3. Whether through manual cryptographic patterns or advanced infrastructure powered by the Chainlink platform, securing the integrity of information flow remains the cornerstone of a reliable onchain economy.