An Auditable and Trusted Lottery System in the Cloud

Public blockchains offer transparency and tamper resistance, but implementing national-scale lotteries directly on-chain is impractical because each bet would require a separate transaction, incurring substantial gas costs and facing throughput limitations. This paper presents an auditable lottery architecture designed to address these scalability challenges and eliminate the reliance on trusted third parties. The proposed approach decouples high-volume bet recording from on-chain enforcement. Bets are recorded off-chain in a transaction-positioned Merkle tree (TP-Merkle tree), while the service provider commits only the per-round root hash and summary metadata to an Ethereum smart contract. Each player receives a signed receipt and a compact Merkle proof (Slice), enabling independent inclusion checks and third-party audits. A programmable appeal mechanism allows any participant to submit receipts and cryptographic evidence to the contract; if misbehavior is proven, compensation is executed automatically from a pre-deposited margin. A proof-of-concept implementation demonstrates the system’s feasibility, and extensive experiments evaluate collision behavior, storage overhead, proof size, and gas consumption, demonstrating that the proposed design can support national-scale betting volumes (tens of millions of bets per round) while occupying only a small fraction of on-chain resources.