The Secret We Want Everyone To Know
An Overview of the Secret Network Ecosystem
TL;DR
- Privacy-by-default protocol built with Rust using Tendermint’s dPoS consensus algorithm that enables decentralized applications (dApps) to perform encrypted computations, transfers, and contract calls,
- Not just private swaps and transfers, we’re talking front-running resistant AMMs, Private NFTs, and lots more.
- Big Ecosystem fund and accelerator pool just launched to entice users and devs to explore and explode.
- Developers will slowly then suddenly realize that it’s better to build all future things using Secret Contracts.
What’s So Important About Privacy?
The contents of this article are based on an assumption: Privacy is a human right. Here’s a list of good reasons: control, empowerment, freedom, choice, transparency, and safety. These words are essential to consider as we try to live happy, healthy, just, and peaceful lives. Privacy is part of all of them.
Like Enigma’s founder, Guy Zyskind, many of Secret Network’s Community members strongly believe that blockchain tech can’t truly begin to achieve mass adoption and all the potential cross-industry use cases without first solving privacy at the base layer. Many also recognize that these tools will make complying with nation-state level regulation more efficient, practical, provable, and fair. If we expect decentralized finance to achieve realistic levels of adoption, end-to-end privacy is a requirement.
The Backstory
What started as a question during an MIT blockchain course became the Enigma whitepapers, where the dream of creating decentralized privacy using a blockchain framework that is Private-by default was born. It became a reality about a year ago when Secret Network launched their Mainnet and became the first of its kind.
Their decision to build on Tendermint using Cosmos’ IBC implementation was easy. Their options were that or Substrate, but Tendermint/IBC was a year ahead and already usable. They decided becoming a sovereign chain was best, allowing the network to have the most flexibility and relevance as newer and better privacy security solutions are discovered over time.
Founders
Tor Bair — likes finding problems and figuring out how to solve them before everyone else realizes it’s a problem. He recognizes the advantages you get from having a good head start, and sometimes you can have the solution ready right on time as people finally realize the problem.
He took the first Blockchain course offered at MIT taught by Guy Zyskind.
Economics major specialized in game theory and options theory and spent 3 or 4 years looking at derivatives markets, so he enjoys volatility and high-risk trading.
Guy Zyskind — Founder of Enigma and Tor’s blockchain teacher at MIT, is now leading the SecretLabs team.
Enigma is one of the core developers of Secret Network and has been a core contributor since the beginning.
The Tech
Secret Contracts
Secret Network is a privacy-preserving computation platform. Secret contracts are based on CosmWasm, written in Rust, and compiled to Wasm. Secret contracts have encrypted inputs, outputs, and state transitions and utilize a combination of secure enclaves plus key management and encryption protocols to preserve privacy. They’re like a combination of Ethereum’s smart contracts, Cosmos’ scalability and interoperability, and Monero’s standard of ‘privacy by default,’ with potential for ‘programmable privacy’ that opens up many possibilities and enables cross-chain interoperability and composability.
Supernova
In August 2021, Secret Network launched its first major network upgrade since Secret Contracts initially launched about a year before. The upgrade introduced IBC integration, connecting Secret Network to everything in the Cosmos Ecosystem, and many other network improvements.
This quote from Guy Zyskind sums it up:
“By introducing programmable privacy, we seek to destroy data silos, empower users, and free people around the world to pursue growth and experiment — letting them use and build never-before-possible permissionless applications.”
Privacy Tokens
The Snip-20 Token Specification allows for the creation of private fungible tokens. This tooling will enable us to create private equivalents for any ERC-20. Tokens created and launched on the Secret Network are born with privacy.
Secret NFTs
NFTs are quickly becoming much more than just jpegs and profile pictures. Private NFTs are the most valuable and versatile form we’ve seen so far.
This is just the start of what you can do using Secret Network’s tools:
- Galleries can restrict viewership to maintain true rarity and exclusivity,
- Collectors can share their art in their chosen galleries while their identity remains unknown,
- Artists and collectors can both maintain financial privacy,
- The ability to use ‘sealed bid auctions’ means collectors can all have a more fair auction experience.
Stashh — NFT marketplace
Many NFT projects are popping up with enthusiastic communities forming around the values of the Secret Network community.
XP. network — Multi-chain NFT bridge
Legendao — Mint-to-Earn NFT multiverse
SCRT Labs is launching a new platform that employs Secret Network’s data-privacy tech to bring top-tier NFT projects and creators to an environment that rewards their participation and contribution. With NFT avatars that level up from community participation and NFTs that allow exclusive access to hidden content, this project is showcasing a couple more great examples of NFT utility and offers an enticing opportunity for NFT artists.
Secure Enclaves
Secure Enclaves are hardware-based trusted execution environments that ensure data can’t be observed by outsiders, the nodes performing the computation, or the node’s host, and that the data can’t be tampered with.
Privacy-by-default doesn’t mean unviewable or impossible to share. Data on Secret is encrypted by default, but users can select some data to be shared with select recipients or the public using Viewing Keys.
Nodes
Secret Network currently has 70 validators. Most are also contributors to the network.
Hardware and software-based cryptography solutions being used while data is being executed means nodes can’t see the data computed.
What can we build?
In addition to creating secret versions of any ERC-20 and bringing privacy to existing chains, there are many obvious and immediate uses for Secret’s tech. Here’s a list of stuff that’s already built or almost ready:
- A front-running and MEV resistant AMM,
- Secret vaults are trustless data access that can be used for paywalls, gated access, etc.
- Secret voting systems that can prevent ‘bribery attacks’ and other voting manipulation issues,
- Credit scoring applications that are capable of generating credit scores using verified user data without exposing the user’s data on-chain.
BlackBox
The folks at Trivium Node are building BlackBox, a collection of dApps that make privacy convenient. Their first products are exactly what we need right now, and they say more tools are coming.
Cloak
Cloak lets you seed a new wallet with SCRT gas without a trace, escaping doxing with no link to your old address. It’s like a mixer but way better. Send sSCRT without a trail to the Cloak pool. The pool is programmed to convert the sSCRT to native SCRT when it reaches a random threshold, then send it all to everyone’s new addresses. This randomness is necessary to prevent ‘bad actors’ from try to ‘strip’ the anonymity away from users that deposit into the pool.
DeadDrop
DeadDrop lets users create an alias to give to senders allowing you to receive payments anonymously. You give your Alias to the sender, and they send payment to the contract. The contract privately routes the payment back to your Secret Address.
Bridging
Suppose you’re on Binance, easy game. Just withdraw to your new secret address using a compatible wallet like Keplr, Math Wallet, or Citadel.one.
If you’re a DEX maxi like me, move some funds to BSC, get some tokens from a faucet or find a friend on their Discord, so you got that gas money, then use their multi-sig protected Secret Bridge to get some sBNB in your fresh Keplr wallet. Swap sBNB for SCRT, and bam! Like with all other gas tokens, don’t spend all your SCRT. Always keep a stash for swaps and transfers.
Here’s a random guide.
More bridges are coming; Polkadot, Shiden, Astar, and Terra have works in progress, and others are showing interest.
Staking
Stake SCRT tokens directly from Keplr or Citadel.one wallet to earn staking rewards currently ranging around ~25–30% annually.
Use this handy dashboard to make decisions on choosing validators, and here’s a staking guide if anyone needs it.
Swapping
Native SCRT is the gas token, don’t swap all of it.
Convert SCRT to sSCRT using Keplr dashboard
Create viewing keys to view your balance— This is a one-time event for each new token you obtain.
Eco Fund and Accelerator Pool
$225M Ecosystem Fund
Announced Jan. 19th and led by SCRT Labs, the fund is designed to help launch hundreds of new applications, onboard hundreds of thousands of new users, and ensure Web3 applications have the data privacy guarantees and customizable privacy controls required for global adoption.
Projects on-boarded through Eco-fund:
Sienna Network –cross-chain, privacy-first DeFi protocol
Altermail — private & secure messaging app
Shade Protocol — Private DeFi protocol launching an algo-stable
Stashh — NFT platform
Big shot investors and critical stakeholders
Momentum 6 (shameless plug)
$175M Accelerator Pool
Secret will use this pool to support critical growth initiatives across Secret DeFi, NFTs, gaming, and metaverse, especially active usage, userbase, and TVL.
Approved Grants
Grants have already been approved for over a dozen initiatives.
Secret NFT reference implementation — Private fungible token standard,
Polar — Dev. environment to compile, test and deploy secret contracts,
Griptape — Front-end app development framework written in Javascript,
Secret Monero Bridge — Enabling DeFi for Monero users,
Fardels — Privacy-preserving decentralized social network for sharing,
SecretPY — Python library for SecretJS,
Secret Contract Code Verification System — Contract validation,
SecretNet — Secret Library for Unity3D,
Secret Heroes — Secret NFT based hero battling game,
Prediction Market Module — SecretSwap Prediction Market,
Silk — Private algorithmic stablecoin,
XP.network — Multi-chain NFT bridge.
Challenges
Security
This will always be on the list. It only takes one mistake or exploit to de-anonymize what was once truly private.
Regulatory issues
These tools can be very good solutions for current compliance issues, but there’s a stigma around the word “Privacy.” This seems like the type of problem that will eventually work itself out
Adoption
Secret Network’s tech works better if lots of people use it. While there’s certainly a growing awareness of the need for better blockchain privacy tools, it still feels like there are just not enough people that care.
Competition
Oasis Protocol — Privacy-enabled blockchain platform
Obscuro — decentralized Layer 2 privacy solution built on top of Ethereum. It focuses on solving the front-running problem. The obscurity shield is temporary. This is supposed to keep the FBI happy
There’s a distinction to be made here between an Ethereum-compatible L2, and a sovereign L1 that can interoperate with Ethereum. Obscuro is the former, Oasis is the latter.
A few other interesting projects using at least some of these approaches:
Phala, manta, and railgun
The Value Proposition
Monero has a $3B market cap and saw highs above $8B. Secret Network is unlocking ‘programmable privacy’ for tokens on many chains, not just their native network. We begin to see that eclipsing Monero completely is the obvious outcome. When we consider that most protocols will soon realize the benefits of building or moving everything onto a privacy-first chain, the case gets stronger.
Secret NFTs also seem to be a sleeping giant offering exciting and novel use cases.
They’ve managed to accidentally build their own moat just by the nature of private smart contracts being sufficiently challenging to build. They haven’t seen serious competition so far, but there are a couple projects starting to catch up. Maybe it can’t last forever, but they have a massive head start at the moment: solid community, solid founders, and working tech.
Given recent socio-political events and narratives, we’re expecting many more people to start taking privacy more seriously and investigating what tech currently exists. When they do, they’ll find Secret Network.
We liked this quote from Evan Feng, Director of research at CoinFund:
“The availability of readily scalable, provable, and compliant privacy technology is an integral component of mass-market consumer-friendly web3 applications. CoinFund is proud to support Secret Network in its mission to enable and accelerate trust-minimized privacy within the composable base layer.”
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