Introducing Twister Cash
Hello, world!
We are beyond excited to announce the active development of Twister Cash. Twister Cash is a highly experimental, maximally optimized, DeFi friendly, extremely ambitious fork of Tornado Cash that focuses the scope of its privacy service on ERC20 tokens, specifically with an initial focus on tokens in the Frax Finance ecosystem, starting with none other than the FRAX stablecoin itself.
Frax Finance
Frax Finance invented the fractional algorithmic stablecoin, utilizing an efficient mixture of collateralization and algorithmic operations to achieve a stablecoin without a fixed supply. Not only has FRAX maintained a tight peg at $1, Frax Finance continues to innovate with the introduction of CPI-linked FPI and Fraxswap, a mechanism for maintaining an inflation-pegged stablecoin.
Arbitrum
Twister Cash has its foundations anchored in Arbitrum, the leading optimistic rollup scaling solution that inherits its security directly from Ethereum. Arbitrum utilizes fraud proofs and a delay window to enable highly scalable computation with minimal costs for users. Recently, they released the developer testnet for Arbitrum Nitro. The speed and quality of development of Arbitrum’s scaling solutions is why we have honed in on their rollup for the base layer of Twister Cash.
Innovation
In this article, we briefly describe a few novel features that make Twister Cash an extremely ambitious experiment in on-chain privacy, so that you have a preview of the slew of exciting breakthroughs coming to Frax Finance and Arbitrum.
Aggregated Anonymity Pools
Aggregated anonymity pools unlock the latent power of privacy-maturing tokens, allowing the protocol to autonomously generate profits that trickle back to the users of the protocol, while offering capital resources to shadowy super coders and external protocols. The first full featured aggregated anonymity pool is a flashloan enabled pool. The protocol is extensible with customizable aggregated anonymity pools, allowing us to explore higher risk, higher reward experiments in the future.
Redefined Commitment Scheme
We adopt and modify the commitment scheme proposed by ABDK consulting in their cryptographic review of Tornado Cash. The new scheme enables a single commitment to be used arbitrarily many times without breaking the link between any of the resulting withdrawals.
Perhaps counter-intuitively, we define a nullifier scheme that allows the utilization of multiple nullifier hashes. A second nullifier hash does not enable double spending, however; instead, it enables multiple distinct actions per each deposit, e.g. baking anonymity mining directly into the protocol.
Adopting Fraxswap
Twister Cash aims to be one of the first adopters of Frax Finance’s recently released Fraxswap. Twister Cash will use TWAMMs to autonomously distribute profits back to the protocol, allowing us to achieve the same level of governance-minimization as Frax Finance.
Computational Integrity Proofs
We wrote all new, exciting circuits for the protocol using Iden3’s circom library. Succinct Non-interactive ARguments of Knowledge are well-known for their mind-bending privacy preserving properties. This is of course foundational to the anonymity protocol. However, another important property of SNARKs is succinctness, i.e. the cost to verify computations is massively less than the cost to perform computations.
We use SNARKs with only public parameters (a.k.a. “zero knowledge without zero knowledge”), otherwise known as Computational Integrity Proofs (CIPs), or validity proofs in less cultured circles. CIPs enable trustlessly verifiable off-chain computations, allowing us to prepare Twister Cash for the next level of adoption.
Verifiable Merkle Trees
CIPs enable off-chain computation of future merkle tree states. Instead of users recomputing the next state of the merkle tree at the time of depositing, users simply deposit a commitment and their tokens. Relayers submit batched updates using CIPs. This saves depositors a significant amount of gas, allowing the cost of deposits to Twister Cash to approach the theoretical limit of a simple token transfer plus some small overhead. This also allows the protocol to bake anonymity mining directly into the protocol at relatively negligible cost to the users, since the relatively lower cost of verifying updates enables us to add a second tree to the protocol.
Tornado Cash
Tornado Cash invented, developed, and continually proves the utility of on-chain mixers using SNARKs. Twister Cash does not, either now or in the future, step into the same markets served by Tornado Cash. We do not offer anonymizing services for ETH, DAI, USDC, USDT, etc. For all of those assets, we point you directly to Tornado Cash. We’re not here to compete with Tornado Cash. We owe them a debt of gratitude that perhaps can never be repaid. However, it is our hope that some of these innovations might make their way upstream to Tornado Cash; that would be the ultimate gift that we could give back to them for being true pioneers in this field.
Conclusion
Twister Cash is a project that is being laboriously developed through relentless trial and error. We would not be here without the foundational work of Tornado Cash and Iden3. We deploy every single possible facet of our skill-set to push on-chain privacy solutions to their absolute limits. This is a wild experiment, and it is possibly a risky one. We look forward to plunging head-first into uncharted territory, and we invite you to join us. There’s no official timeline to deploy on Arbitrum mainnet, but you can follow the development of Twister Cash by joining our telegram and following us on twitter.
