Code-feasible detection of toehold reporting failures

Determine whether detecting concealed or inaccurately reported toehold positions by winning bidders in the sequential auction mechanism can be implemented in a fully code-feasible, EV-robust manner without reliance on off-chain institutions, and, if so, develop and validate such on-chain detection and enforcement methods.

Background

Accurate toehold reporting is essential for ranking bids by the social surplus promised to other token holders. Hidden ownership or other forms of concealment can artificially inflate bids and undermine auction efficiency. The paper discusses potential remedies such as bounty systems, registration, and a flush sale variant, but emphasizes the challenge of achieving reliable, on-chain, code-feasible detection of misreporting.

Because empty voting and hidden ownership can be hard to observe and may be intertwined with legitimate hedging, any toehold-detection approach must be EV-robust and work without trusted intermediaries. The authors explicitly note difficulty in achieving such detection purely through code.