OPUS-VFL: Incentivizing Optimal Privacy-Utility Tradeoffs in Vertical Federated Learning

Abstract

Vertical Federated Learning (VFL) enables organizations with disjoint feature spaces but shared user bases to collaboratively train models without sharing raw data. However, existing VFL systems face critical limitations: they often lack effective incentive mechanisms, struggle to balance privacy-utility tradeoffs, and fail to accommodate clients with heterogeneous resource capabilities. These challenges hinder meaningful participation, degrade model performance, and limit practical deployment. To address these issues, we propose OPUS-VFL, an Optimal Privacy-Utility tradeoff Strategy for VFL. OPUS-VFL introduces a novel, privacy-aware incentive mechanism that rewards clients based on a principled combination of model contribution, privacy preservation, and resource investment. It employs a lightweight leave-one-out (LOO) strategy to quantify feature importance per client, and integrates an adaptive differential privacy mechanism that enables clients to dynamically calibrate noise levels to optimize their individual utility. Our framework is designed to be scalable, budget-balanced, and robust to inference and poisoning attacks. Extensive experiments on benchmark datasets (MNIST, CIFAR-10, and CIFAR-100) demonstrate that OPUS-VFL significantly outperforms state-of-the-art VFL baselines in both efficiency and robustness. It reduces label inference attack success rates by up to 20%, increases feature inference reconstruction error (MSE) by over 30%, and achieves up to 25% higher incentives for clients that contribute meaningfully while respecting privacy and cost constraints. These results highlight the practicality and innovation of OPUS-VFL as a secure, fair, and performance-driven solution for real-world VFL.