Tornado.Cash is the largest decentralized mixed currency agreement at present. It has gone through a withdrawal due to regulatory reasons in its home state in the US, and now it has finally issued coins! Tornado.Cash currently has a deposit of $200 million, a weekly transaction of $10 million and an income of about $20,000. The revenue of a centralized mixed currency platform seized by FBI reached 50 million US dollars in eight months. Judging from this amount, the mixed currency deserves attention, and Tornado.Cash may have a relatively large space for development. In terms of technology, Tornado.Cash is also a high level agreement.

Tornado.Cash has become Ethereum’s largest privacy solution. It is autonomous and decentralized, but it is also static — leaving it with no way to grow. There are proposals on the table that could change that. If the proposal is adopted, governance of Tornado.Cash will be entrusted to its users, and Tornado.Cash will be allowed to grow under the governance of its community. In this way, Ethereum users will be in control of their own privacy protocols.

Here are some suggestions for how Tornado.Cash could work:

TORN tokens,

TORN is an ERC20-compatible token that has a fixed supply to manage Tornado.Cash. TORN holders can make suggestions through governance and can vote to change the agreement.

TORN is not a fundraising tool or investment opportunity. After 45 days of deployment, it will remain non-transferable until the community votes on governance to unlock the transfer and ensure that it complies with all adaptation laws.

The following is the original TORN distribution:

  • 5% (500,000 TORN) : Airdrop to Tornado.Cash Ethereum pool early users

  • 10% (1,000,000 TORN) : Tornado.Cash Ethereum Pool anonymous mining, linear unlock within 1 year

  • 55% (5,500,000 TORN) : DAO library, will be unlocked linearly for 5 years with a 3 month lock-up period

  • 30% (3,000,000 TORN) : Original developer and early supporter, linear unlock for 3 years with 1 year lock-up period

drop

Believed from the outset that Tornado.Cash users should have a say in governance agreements. For this reason, early adopters of the protocol will receive airdrops of the TORN.

Before the height of block 11400000, all deposits to Tornado.Cash Ethereum pool addresses will be airdropped TORN. TORN will be airdropped in the form of a non-transferable TORN certificate (vTORN), which can be redeemed 1:1 for a TORN within 1 year. The unredeemed TORN will be liquidated into the management contract after 1 year and become part of the DAO library. The redeemed TORN can be used immediately.

The amount of airdrop depends on the size and duration of the user’s deposit – more deposits and earlier deposits will earn more TORN TORN. The multiplier of deposit size is logarithmic:

So saving 100 Ethereum will give you twice as many tokens as saving 1 ethereum. Multipliers enable Tornado.Cash users, both large and small, to have a say in management.

The exact curve of the time multiplier is shown below:

The exact formula for airdrop is as follows:

Anonymous dig

The basic idea behind Tornado.Cash is that privacy is a human right, and that the more privacy measures each person takes, the safer it will be for all of us (just as HTTPS becoming the default for web browsers makes us all safer). For this reason, users who add Tornado.Cash anonymous set should also receive TORN.

Traditional DeFi liquidity mining is a natural choice for allocating tokens. But any naive liquidity mining scheme would force users to disclose how long their savings have been spent in the Tornado.Cash pool. This runs counter to Tornado.Cash’s core value: privacy protection.

This was the driving force behind the invention of anonymous mining. In anonymous mining, users will be able to receive TORN through a two-stage shielded mobile mining system that provides full privacy.

After Tornado.Cash deposits, users will accumulate private anonymous points (AP) in a protected account that will protect the user’s wallet address and balance without disclosing any information about the deposit. Once users have accumulated enough AP’s in their protected account, they can exchange AP’s for public TORN tokens at any time through our customized Tornado.Cash AMM.

The system is a bit complicated. However, this ensures that the user’s privacy is always protected during the process of claiming TORN tokens.

Note: Only vouchers deposited after the deployment ceremony are eligible for anonymous completion – older vouchers will be distributed via airdrop.

The operation steps are as follows:

To claim the AP

First of all, users can only claim anonymous credits (AP) of Tornado.Cash vouchers that have been spent (users can only claim AP if they have spent vouchers). After spending the ticket, there will be a delay in claiming the AP.

In order to claim an AP, the user’s browser generates a special zero-knowledge proof to calculate the amount of AP owed (based on how many blocks the user has in the Ethereum Tornado.Cash pool) and then adds it to the user’s protected balance. The following table is the AP table of each block with different Tornado.Cash voucher sizes.

The rest of the online user can only see someone claiming an AP of unknown size for a few credentials in a specific Tornado.Cash pool. To further enhance privacy, users can claim an AP through a repeater (who accepts the AP as payment for their relay).

Protected account

Because aps are completely private, in order to store user-protected aps, users need to generate a secret key to store AP balances. The key is randomly generated and then encrypted using the Ethereum public key (using Metamask’s eth_getEncryptionPublicKey) and stored on the chain. This way, even if it is lost, it can be recovered using the user’s Ethereum key.

This secret key is used for encryption, submission for claim and extraction of data, and does not reveal the user’s identity.

Change an AP to a TORN

Users can use the Tornado.Cash Automated Market Maker (AMM) to convert their mined AP into a publicly visible TORN.

Continuously and evenly drop the TORN into the AMM (1 million TORN tokens in 1 year). An AP claimed at any point can bid on the TORN racked up to that point in the AMM.

This does mean that the timing of converting an AP to a TORN band should be strategic — the AP/TORN rate will decrease if there are too many withdrawals at the same time, and increase if there are too few withdrawals. However, the TORN is completely non-transferable for the first 45 days.

This is a rough analogy: you can imagine the TORN tokens being released by dripping into the bucket (AMM) within a year. With AP tokens, you can bid on any number of TORN pieces currently stored in the bucket. If there are many APS bidding at the same time, the bucket will be quickly exhausted and the bidding rate for each AP will be low. However, if the AP holder is patient, it should level out over time and everyone should get roughly the same number of TORN as the AP.

This was the whole process of claiming the TORN. Unfortunately, some of this is irreducible complexity. However, we don’t know how much AP will be generated during anonymous mining (because it’s private!). So this is the only way to ensure that the TORN has a fixed supply and that all aps are protected until it is converted to a common TORN.

The exact AMM formula is as follows:

  • T-torn mining plan allocation
  • Tvirt — Virtual TORN balance
  • Twithdrawn – The number of TORN TORN pages that the user has withdrawn
  • TORN- The number of TORN pieces the user will receive
  • AP — Redeemable anonymous points
  • W — AMM exchange weight constant

Tornado. Cash agent

You may be wondering how all this is possible – is Tornado.Cash really immutable?

It is! Tornado.Cash smart contracts cannot be changed or renewed. They are decentralized and immutable.

But for Tornado.Cash to be able to mine, it needs more metadata than is currently available: it needs to know the block number of every Tornado. To this end, old Tornado.Cash, which adds an existing block number for each transaction, has an agent in front of it. For Tornado.Cash users who use proxies, their credentials can be used for anonymous mining, as the Merkle tree will contain data on when their deposits occurred. (The tornado. Cash version without an agent is still available.)

Note: To aggregate deposits and withdrawals into the Merkle tree, you need to run a script called root-updater. As long as there are people running, the system can run smoothly and reliably. It is the community, through management, that decides who is responsible for this role and how to handle it.

management

In order to participate in the management of Tornado.Cash, users first need to lock in tokens in the management contract. If a user needs to vote or create a proposal, the token cannot be unlocked until the end of the proposal execution period (8.25 days after the proposal is created). Locked tokens can also be delegated to another address.

To make a proposal, users need to have at least 1000 TORN TORN lists. All proposals need to be smart contracts, and this contract needs to have a smart contract that manages the execution of the contract and passes the verification code. This makes it easy to review and test any managed changes.

The proposal will be voted on for three days. If the proposal receives a majority of votes and the total number of votes cast reaches at least 25,000, it will succeed (if turnout is too low, the proposal will automatically lapse).

After the proposal is successful, it will be valid for 2 days. After the deadline, any user can execute the proposal (initiate changes). If the proposal is not implemented within three days after this date, it is considered expired and cannot be implemented again.

All the initial parameters are relatively small, as there won’t be many TORN tokens in circulation in the early days. However, these thresholds may be adjusted as the supply cycle increases.

The management proposal has the right to change Tornado.Cash’s internal parameters, including a full upgrade (through an agent).

Management to start the

At the end of the day, it’s just a suggestion. We don’t control Tornado.Cash, its users do, so if the community adopts this recommendation, it will be the way forward for Privacy protection. We’ve written the code and posted it to GitHub and IPFS.

about

UBI. City – Regarding the future organizational structure of the agreement, we will be releasing more ideas and design mechanism of UBI. We welcome interested blockchain enthusiasts, community initiators, research analysts and Gavin, Iris to discuss the future possibilities of UBI.

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