Staking Hub: Secret Network AMA
Secret Network is a privacy-first, blockchain-based protocol that enables decentralized applications (Secret Apps) to use encrypted data without revealing it. On July 29th, Tor Bair (Executive Director of Secret Foundation), Guy Zyskind (CEO of Enigma), and Can Kisagun (CPO of Enigma) joined us to answer all of our Secret Network questions.
- Secret contracts are executed in a trusted execution environment, which keeps the data hidden and private.
- 50 validators in the active set.
- Inflation parameters set at 7-15% and currently 15%.
- SCRT token currently used for staking, transaction/computation fees, and governance participation.
- Planning to bring SCRT to Cosmos and Ethereum.
- secretSCRT (name TBD) transfers and balances are completely private.
Secret Network Primer
Secret Network is a blockchain protocol that enables decentralized applications to perform encrypted computations. Secret contracts can take encrypted inputs and produce encrypted outputs, without exposing any data while it is in-use.
Data on most blockchains are public by default. This makes it difficult for companies, organizations, and individuals to take advantage of blockchain technology when dealing with sensitive information.
The Secret Network solves this problem by relying on Trusted Execution Environments, which allows data to stay encrypted on the network. The Secret Network was built with the Cosmos SDK using Tendermint for consensus, and is governed by SCRT token holders.
Increasing Usability and Fostering New Applications
“We see two main improvements secret contracts bring to the decentralized web: usability improvements and ability to build new products. These are both very important for adoption of decentralized technologies.”Can Kisagun, CPO of Enigma
Current applications that rely on commit-reveal schemes like rock, paper, scissors in Cheeze Wizards or transferring assets anonymously via Tornado Cash require two interactions form the user. By using secret contract based mixers, the Secret Network can reduce the required interaction from a user to a single step.
Secret contracts will also allow developers to build new applications that will allow content creators to monetize content on the decentralized web, build more in depth turn based games like poker, or build privacy focused DeFi applications where the contract, amounts, and addresses are kept private.
All Nodes Equipped with a TEE
All nodes on the Secret Network are equipped with a Trusted Execution Environment (TEE), which allows nodes to execute code inside of a secure enclave. This ensures that the data is physically inaccessible to any node operators on Secret Network.
“The enclave itself can decrypt/encrypt the data and run the computations in the clear, but given the privacy properties of enclaves, no data is ever revealed beyond the secure enclave’s boundary.”Guy Zyskind, CEO of Enigma
All validators on Secret Network must be equipped with Intel SGX chips, which is the form of TEE that Secret Network will initially use.
Outside of this, the Secret Network development team recommends minimum requirements of 1GB of RAM, 100GB HDD, and 1 dedicated core of Intel Skylake processor (6th generation) or better.
There will be 50 validators in the active set on the network and those validators are chosen based on the amount of SCRT tokens staked.
Validators and SCRT token holders who decided to delegate their SCRT tokens will earn rewards on Secret Network.
There is currently a 40% reward rate, but Tor, from the Secret Foundation expects that number to come down as more SCRT starts being staked on the network.
The inflation parameters are currently set between 7-15%. Inflation is currently at 15% and will continue to be as long as staking participation is below 66.7%. The inflation rate will gradually decline once staking participation rises above 66.7%
SCRT token holders who are currently staking can participate in on-chain governance.
There is a one week voting period on the network.
Network parameters (like inflation rate), the community pool (currently 2% of all rewards), and network upgrades (new modules and hard-forks) can all be changed via on-chain governance.
Interoperability on the Horizon
Once secret contracts are deployed on mainnet, the Secret Network development team hopes to bring their value to other ecosystems as soon as possible.
“We’re actually thinking of creating a bridge to ETH almost immediately, and then expand on it with IBC to the entire Cosmos ecosystem. That should bring Secret Contracts to the two biggest ecosystems out there.”Guy Zyskind, CEO Enigma
The secretSCRT Token
secretSCRT tokens (name TBD), which are currently being tested on Secret Network’s testnet, will have a 1:1 peg to SCRT. Although the conversion is public, once these tokens are created, the movement and balances of secretSCRT wallets will be completely shielded and private.
“We expect tokens transferred to the secret network to be done under the secret token (like secret20) standard. So once your asset is on the Secret Network, it becomes a privacy token that you can send and also participate in applications, like Uniswap.”Can Kisagun, CPO of Enigma
“With Secret Contracts deployed, focus turns to what you can build on top of them, so killer applications with a focus on open economies and decentralized finance, utilizing the benefits of Secret Network compared to other ecosystems.”Guy Zyskind, CEO of Enigma
Special thanks to Tor, Guy, and Can for spending an hour with Staking Hub to answer all of our questions!
Thank you Gavin for co-hosting and thanks to our Staking Hub community for all of your wonderful questions.
Feel free to join our Staking Hub Telegram group if you haven’t already.