Private Transactions on Cardano?

Privacy is the personal decision to selectively reveal yourself to the world.

Each individual decides what he wants others to know about him. That decision is respected as a right, based on the protection of personal data in most Western countries.

Identity is directly related to privacy. Anonymity is the opposite of identification. 

Anonymity and privacy are often confused, considering that anonymity is total privacy, but this is not the case, since anonymity is the absence of identity and without it privacy is not possible.

In other words, for privacy to exist, identity must exist. Privacy is reserving information of that identity.

Although there are laws that oblige people to identify themselves in certain circumstances, such as taking a plane flight, entering the borders of a country, or buying a vehicle, in any case, privacy remains an individual right.

Privacy is also often confused with security, with the assumption that without privacy there is no security. Privacy can be part of security, but it is not the only component, in fact there can be security without privacy, in some cases. There can also be privacy without security.

Nor should privacy be associated with criminal acts, as criminals prefer to operate in anonymity rather than privacy.

Cardano users can choose to make private transactions for protection. Cardano, you need your own private transaction protocol for this.

A protocol based on zero-knowledge cryptographic proofs, breaks the link between sender and receiver.

In cryptography, a zero-knowledge protocol is a method by which one party can prove to another that a given statement is true, without transmitting any information other than the fact that the statement is actually true. 

The essence of zero-knowledge tests is that they are based on proving that one has knowledge of certain information without explicitly revealing it. 

In the case of transactions, it is necessary to prove the ownership of the funds to operate, and the information to preserve is the ownership of the wallets, without disclosing the data of the issuers and receivers, or the amounts that are transferred.

Cardano Mixer Proposes Privacy

Every year, companies and governments around the world collect more and more data from people. 

Storing real identity pairs and wallets in centralized databases poses considerable risk to crypto asset owners. This happens, for example, when a user sends crypto assets from a centralized exchange such as Coinbase, Binance or Kraken, to a personal wallet. There should be an option available for users of the Cardano blockchain to stay under the pseudonym or disconnect their real-world identities from their assets, while still complying with the laws of their respective jurisdictions.

Although several existing privacy solutions (for example, Tornado.cash, Monero, and Zcash) may be accessible to Cardano users via cross-chain bridging, a native private transaction protocol built specifically for Cardano would be a further solution, efficient and practical for Cardano users. 

This protocol is currently under development and will be released in the coming months, and it is called Cardano Mixer

When implemented, it will be able to break the link between the issuer and receiver of assets on the Cardano Blockchain, allowing private transactions. This is made possible by the use of zero-knowledge cryptographic proofs.

The protocol they are building is based on zero-knowledge cryptographic evidence – it breaks the link between the sender and receiver of assets on the Cardano Blockchain, allowing for private transactions. The DApp called Cardano Mixer, will serve as a nice and easy-to-use interface to the protocol.

For the first version of the protocol, J. Groth’s zkSNARK construct will be used, as it still seems to be the best overall choice for this type of application. 

The DApp would be somewhat similar to Tornado.cash in that there will be options to choose the amount to mix, deposit and withdraw crypto assets, receive anonymity mining rewards, and generate your transaction report (with different levels of detail).

The Cardano Mixer protocol, however, is quite different on the backend, as Cardano uses a different accounting model and has a different native programming language. 

As for the protocol token, the main goals are maximum decentralization, sufficient incentives for miners of anonymity and liquidity.

The White Paper: Cardano Mixer: a Private Transactions Protocol for the Cardano Blockchain explains:

  • how the code works inside and outside the protocol chain;
  • the specification of deposit / withdrawal transactions;
  • the Tokenomics

Roadmap

October: Github initial Source Launch and Testnet Deployment;

November: mainnet launch and trust setup ceremony;

December:implementation of governance mechanisms;

Q1 2022: release additional quality of life features.

Launch date: expected before December 2021.

Definition of success

  • after 3 months: at least 500-700 users participating in the trust configuration ceremony;
  • after 6 months: have the protocol run smoothly with governance and quality of life functions, such as transaction reporting for compliance purposes;
  • after 12 months: increase the user base to thousands, and implement integrations with other DApps that use the privacy features.

The Budget

Up to $ 15,000 will be reserved for a code audit of the most critical parts of the protocol. 

Additional audits can be initiated later using the protocol treasury once it is fully operational.

Approximately USD 300-500 will be used to cover development and maintenance costs.

Up to $ 3,000 will cover user interface design costs.

Finally, between USD 12,000 and 15,000 will be paid to developers to work full time on this project (November-December).

Total funds requested: USD 30,000 

The Team

Elena Ivanova and Vladimir Sinyakov are two developers with Ph.D. in applied mathematics.

Vladimir Sinyakov informed me he is the project founder and lead developer. He holds a PhD in Applied Mathematics and works as a postdoc researcher. With experience in functional programming, he is responsible for the protocol backend development. 

Other team members provide their expertise in startup building and contribute to the protocol design, UI/UX of the dApp, website design, and project promotion.

Website: https://cardmix.io 

Requested funds: $ 30,000
The original proposal in Catalyst.

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