In the real world – the world on which the global economy operates – we do not publicly highlight every aspect of our financial activity. We want to choose which parties can access our financial data and under what circumstances – for example, our credit history or bank transactions. The problem with the blockchain world is that this financial secrecy does not really exist. This has led to very bad abuses, such as the practice of ‘front running’ where a nefarious person can take advantage of you immediately after seeing your transaction on a public blockchain. This problem requires an improvement in the actual infrastructure, without it, there would be no hope of ever launching ‘Shangri-La’, the crypto of ‘DFI’ (decentralized finance).
This is important because some well-known organizations within the scope of blockchain financing are investing the equivalent of $ 11.5 million in SCRT, the original coin of the Secret Network blockchain. The investment was led by Arrington Capital and Blocktower Capital and also includes Spartan Group and Skynet Trading.
Secret includes previous investors Outlier Ventures, Fenbushi Capital and Hashed as well as Secret Foundation and Enigma MPC and node operators such as Figment and Staked.
Secret Foundation founder Tor Barr said: “The engagement of these valuable and experienced partners to the secret ecosystem is an important turning point for the Secret Network as we expand and support our rapidly growing application layer.”
Gupt, previously called Enigma by a pivot, claims that it is the first confidentiality-first smart contract platform. (The first version of this blockchain was called “Enigma Mainnet”, but the branding was changed to Secret Network via a governance vote in Summer 2020).
So far in 2021, the Secret Network ecosystem has launched a number of native applications, including PrivacySwap, “front-running resistance”, privacy protection with cross-chain AMMs. It is also developing Secret NXT.
So why is this all important?
Why should we care? This is simply because, without secrecy, Daffy is highly unlikely to go mainstream.
Without secrecy in the transaction, the traditional economic system will not bother taking any notice of crypto and blockchain, out of whether the price of bitcoin goes up or down.
Of course, Secret is not the only player to deal with the region. It is playing out in the same area as blockchain projects such as Falla (not yet on Mainnet, and built on Polkadot), Oasis, and Aleo, which recently raised funds through Andreessen Horowitz.
What is common in all these projects is the race known as the Web 3 ‘Application Privacy’ space. Once again, they are trying to reproduce the kind of financial secrecy that we all have come to expect from the traditional financial system, but which remains elusive in the blockchain world.
However, this approach should not be confused with privacy coins such as Monroe and Zcash. These are coins, and therefore not identical to the above projects, known as ‘programmable privacy’.
Barr said to me: “Transaction confidentiality [via privacy coins] It simply means hiding the simple aspects of the transaction from other parties – a narrow form of confidentiality. Smart contract privacy – what we call ‘programmable privacy’ – is a much more powerful idea, which allows developers to build complex decentralized and unencrypted applications that deliver great results for Web3 security and usability, with data privacy. Protect also. As an analogy – imagine trying to create a decentralized Facebook. Common blockchains expose all data by default, with very poor consequences for user privacy and security. Only smart contract confidentiality allows you to build such complex applications without compromising the user experience and endangering their security. “
Front-running is often described as a transaction preceding a known future transaction. Barr claims that Secret protects against this at the protocol level because all interactions with smart contracts are encrypted and can’t even be seen by network verifiers, “so all DFI applications built on the secret network are resistant to default. “He told me.
That said, Covert would still have to compete with myriad privacy projects – for example – Ethereum, such as Automata. The Secret Network is a standalone blockchain and will still need a developer community to succeed, versus Ethereum and Polkadot, which is technically a major start. But these blockchains are public by default. So Secret’s hyper-focus on the issue of privacy can still make Secret a major player in this realm.
Barre commented: “Only programmable privacy can give users and developers this level of control in the Defy world. Without programmable secrecy, DeFi would never achieve mass adoption outside of purely speculative activity. The secret network is intended to be the foundation for new types of DIFI applications that provide better security to users, while allowing traditional institutions to safely participate with security for sensitive data. Furthermore, blockchains do not require thousands of developers to succeed in the short term – they need the right developers who build critical applications early on. “
In addition, Secret favors the fact that the blockchain is not nearly a ‘winner-all-environment’ due to the full nature of decentralization of space as the common Internet has become due to the development of big bigtech platforms – which point to decentralization But there will be a counter. As Barr told me: “Secret’s vision is to become a data privacy hub for all public blockchains, collaborating more than competing with networks such as Ethereum (for which we already have a living bridge that includes 100 Assets over m is locked). “
The Secret Network claims that it was one of the first blockchains to introduce privacy-preserving smart contracts, which were launched on MainNet in September 2020. It says that this means that all decentralized applications built on the secret network have data privacy by default. The secret network blockchain itself is based on the Cosmos SDK / Tendermint, which provides it with its own independent consent, on-chain governance, and features such as slashing and delegation. It is secured by Basic Coinage Secret (SCRT), which must be used by network verifiers and is used for transactions and computation fees as well as governance.
Commenting on the investment, Arrington Capital founder Michael Arlington said: “The secret is the first blockchain ecosystem to prioritize privacy. Financial privacy is critical to personal freedom, and Arrington Capital has long been committed to financial privacy and censorship resistance. The rapid expansion of decentralized finance makes solutions such as the Secret Network a time bound addition to the Defy ecosystem. “(Arlington Capital was founded by Arlington, who was also the founder of ClearTips before, but has no involvement in the title these days).
Jamie Burke, founder of Outlayer Ventures in the UK and a secret backer, told me: “Privacy will be necessary to protect the web and adopt Web3, from DFI to NXT and beyond. Secret brings new and unique privacy functionality to the network space, and as a result we believe it will be fundamental to the next generation of successful web applications. “
Sina is also getting support from Defai players like Sierra Network. Monty Munford, the leading evangelist and main contributor of the privacy DIF company, told me: “For all networks around the world, we chose Secret because it was a yes-yes-yes mind. They understand privacy and we understand Defy; It is a match made in heaven. “