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Privacy is an important right that many people neglect. In the technology industry, this disregard for privacy is common. This hinders the user’s experience with technology and their confidence in it.
A user is not allowed to have any say in a centralized environment like Google or Facebook. However, in a blockchain-based decentralized ecosystem, privacy solutions that are user-centric are very rare.
The last ten years have seen a significant transformation in blockchain technology. We have moved beyond a simple, effective Digital Currency Network like Bitcoin to smart contract-based networks like Polkadot and Solana. This has changed the narrative about what this technology can do.
The applications and the network gained value from the immutability and transparency of smart contract-based decentralized apps (DApps). However, smart contracts tend to be focused on transparency and in some way ignore the user’s privacy.
These privacy concerns can be addressed by Secret Network.
What is Secret Network?
Secret Network is a network of blockchains that offers a variety of privacy-preserving tools.
It is a Layer-1 Blockchain network built using Cosmos SDK (Software Development Kit). The network has a block time of 6 seconds and a TPS 25. This TPS can be increased to 10,000 if necessary.
Delegated Proof of Stake (PoS), a consensus mechanism that is integrated with Byzantine Fault Tolerance, (BFT), is used by the network. This increases the network’s security and protects it against bad players and compromised nodes.
Privacy on the network can also be achieved via two fronts.
First, the Software uses secret contracts that are privacy-based smart contract called Secret Contracts. This protects private data from public view. The contract details are kept secret, even though the network is open source.
The Hardware is the second. Each node in the network must have a particular computer configuration. This creates a Trusted Execution Environment (TEE) for the information. This means that even the node operator can’t see information while it is being processed.
TEEs can be described as a black box, which allows information to be processed in a secure and enclosed environment. They can be found in all things, including smartphones, tablets and setup boxes.
Secret Network Security
The system protects data at both the Output and InputProcessing stages.
The Secret Network also uses Cosmos IBC (InterBlockchain Communication Protocol), and is highly interoperable to other blockchain networks. The network also has an internal token, SCRT, which is used to manage the network and pay the gas fee.
Secret Network allows a developer to programable privacy. An application can be either:
You can keep some information private and closed. Or you can make it completely public and open-source.
What are the background and origins of Secret Network?
In 2017, the Secret Network team launched Enigma, a project that was originally called Enigma. Enigma was created to bring Layer 2 private computing solution to Ethereum.
In 2017, the project held an ICO (Initial Coin offering) and ENG tokens were distributed to participants. SEC (Securities Exchange Commission), however, imposed a $500,000 penalty for failing to register the ICO under Section 255 of the Securities Act. These charges were settled by the SEC on 19 February 2020.
The network’s mainnet went live the following week on the 13th of February 2020. The project was rebranded Secret NetworkEnigma MPC in May 2020 (the company that developed Enigma Protocol). It is now one the many development groups behind Secret Network.
Secret Foundation was created as a new organization. Secret Foundation is responsible for building, scaling up, and promoting Secret Network.
The migration process began in June 2020. ENG tokens were exchanged with SCRT tokens. The Secret Contracts were launched by the project in September 2020. They allow developers to create Decentralized Applications (DApps), which are called Secret Applications on this network.
Tor Bair – Twitter CEO, Founder, Secret Foundation
Tor is the CEO of the Secret Foundation, and the Founder. He is also the main face of Secret Network.
He is based out of Chicago, USA. He holds a Bachelor’s degree in economics as well as an MBA from MIT. For almost three years, Tor was the Head of Growth and Marketing at Enigma MPC. His work history included Options Trading and Data Analytics before Enigma.
Let’s now see how Secret Network can be used in a different way than any other Layer 1 Blockchain Network.
What are the use cases of the Secret Network’s?
Secret Contracts, which are privacy-preserving smart contracts that Secret Network uses, have been discussed. These contracts can be used for many useful Decentralized Applications.
These are just a few examples of use cases that exist.
Secret Tokens and Bridges
Secret Tokens, SNIP-20 standard tokens, are created using the network’s Smart-Contract Secret Contracts. These tokens can be programmed, similar to ERC-20 tokens (Ethereum Token Standard). Secret Tokens can also be private, much like Monero (XMR).
Secret Token transactions keep confidential data like recipient details, amount transferred and wallet balances. A user also receives a viewing key which can be shared with others for regulatory compliance.
Secret Tokens have several use cases. These tokens can be used to trade, save, and invest on Secret Finance. Or, you can mint Secret NFTs.
Secret Network Bridges
This means that ETH can easily be converted to sETH, and can then be used on the network. Secret Network Bridges are a great way to do this. These bridges allow users to create private versions of their assets.
The cross-chain process, however, is not completely private. Ethereum, for example, is an open-source network that is also public. The transaction details for transactions made from Ethereum to Secret Network will be accessible on the Ethereum Network when you bridge ETH between them.
Additionally, the Secret Network will make it public that these secret tokens (sETH or sBTC) are being minted and burned.
Learn more about Secret Tokens.
To avoid any confusion, SCRT (in-house token for the Secret Network) does not count as a Secret Token.
Public TokensSecret TokensSCRTsSCRTETHsETHLUNAsLUNAATOMsATOMOSMOsOSMOSecret Finance
Secret Finance is a privacy-focused version of Decentralised Finance. The Secret Network (Secret Apps), which is used to build DeFi apps, keeps the user’s data encrypted during the input, processing and output stages.
This privacy is not possible in public blockchains like Ethereum and Polygon. Anybody with your wallet address can access your account activity, wallet balances, transaction history, and previous transactions.
We will also discuss Front Running in a moment.
Secret Apps fix this problem with programmable privacy. This means that this data is by default private. You have the option to share your data with anyone.
(If you’re new to DeFi, you can find out more with the CoinSutra DeFi Beginner’s Guide.
This is made easier by the projects built on the network.
Shade Protocol is a platform that builds a network of DeFi applications. Shade has created SILK, a privacy-based algorithmic stablecoin.
The Shade Protocol DeFi Ecosystem will use SILK as its standard currency. This is similar to Terra Network – UST ecosystem.
Learn more about SILK by clicking here
Front Running is a common problem in crypto trades, where miners and high frequency traders exploit regular traders.
High-frequency traders can beat regular traders and grab cheap deals, and then offer these trades at a higher price to high-frequency traders. Front running is illegal in most security markets, except crypto which is not regulated.
What is Front Running?
You may be aware that there is usually a delay between the transaction being initiated and processed. The gas fee you pay will determine the processing time of a transaction. High gas fee transactions are given high priority.
Anyone with information about this queued transaction who pays a higher gasoline fee than you can run you. Even if he placed an order after yours, his transaction will be processed prior to you.
You will therefore receive a token for a much higher price than you anticipated. Learn more about Front Running.
SecretSwap, a crypto exchange built on the Secret Network, is called SecretSwap. SecretSwap transactions are protected by encryption and cannot be accessed by anyone else. The exchange also provides cross-chain liquidity between Secret and Ethereum, BNB Chain, Monero, and Monero.
Learn more about SecretSwap by clicking here
Secret Auctions is an online auction where you can either sell or buy a crypto token. You can list your assets for auction and bid as a buyer.
Buyers and OTC (over the counter) platforms do not know about the bids that are being made to the seller. They cannot collaborate together, and this allows sellers to get the highest price possible for their assets.
Check out Secret Auctions.
Secret NFTs permit private ownership of NFTs, and ensure that transactions and assets are not made public.
NFTs typically have metadata that is accessible to the public. Secret NFTs have additional metadata that is visible to the general public. However, token holders are only allowed to access private metadata.
These NFTs can be used in a variety of ways. A creator could display a low quality image on the marketplace while keeping a high-quality version of his artwork in the private metadata. This will preserve the rare nature of the art. Private metadata can preserve any NFT functionality that is rare.
This gives the creator full control over the content. He can also offer a watermarked version of the image or video to the marketplace, so the buyer has an idea of what he’s buying. The Secret NFT will only allow you to access the highest-quality version.
Learn more about Non-Fungible Coins by reading the CoinSutra NFT Beginner’s Guide.
Secret NFT vs. Traditional NFTs
The use case for Secret NFTs is thus:
Allows NFT collectors to bid in sealed auctions. Keeps them anonymous. Art Galleries can limit viewership to preserve the rarity of the art.
Learn more about Secret NFTs by clicking here
Secret Network Usage Statistics
Secret Network Statistics
The number of wallet addresses on the network has seen a significant increase in the past year.
Secret Network Stats
Additionally, the average daily transaction on the network is 15,000
Let’s now look at the components of the Secret Network.
Secret Network Components
The following are the components of the Secret Network:
Secret Network is a Layer-1 Blockchain network that uses Cosmos SDK (Software Development Kit). The network uses a Delegated Proof of Stake (DPoS) consensus mechanism that is integrated with Tendermint’s Byzantine Fault – Tolerance algorithm.
This mechanism allows for a theoretical maximum transaction per second (TPS) of approximately 10,000. The current block time for the network is 6 seconds, with a TPS rate of 25. As the network adoption progresses, this will increase gradually. The Byzantine Fault Tolerance algorithm further identifies bad nodes and provides better safety.
To create a TEE (Trusted Execution environment), each computer node must have a particular configuration. There are Intel CPUs with Software Guard Extensions (SGX) that can be used to accomplish this.
These transactions are processed in TEE, which is a safe place. It guarantees Data Confidentiality and Data Integrity as well as Code Integrity. This means that even a validator of a node does not have access the user’s private data. There are currently 70 nodes in the network.
The Secret Network can also be interoperable with other blockchain networks because it uses Secret Bridges as well as the Cosmos InterBlockchain Communication protocol, (IBC).
Please be aware that Secret Network is open-source and available to the public by default. Only user information is protected in the ecosystem.
Secret Contracts are the next component of the network. These smart contracts have a programmable privacy feature.
Secret Contracts are used to create privacy-focused Decentralised Apps (DApps) that can be used for data protection. Secret Contracts are used to build current use cases, such as Secret Tokens and Secret Finance Apps or Secret NFT Platforms.
Secret Contract encrypts input data. TEE protects data at the processing stage. The contract decrypts the output for the end-user. This ensures that user data is kept completely private from beginning to end.
SCRT is the last component of Secret Network. This token is the backbone of the entire ecosystem.
SCRT is not considered a Privacy Token. The token can also be used for
GovernanceTransactions – i.e., for exchange with crypto tokens on the networkGas Fee
ParticularsAmountMaximum Supply (Source)NATotal Supply212.352 MillionCirculating Supply166.738 Million(79% of Total Supply)Token Value$ 6.27Market Cap$ 1.05 Billion24 Hour Volume$ 26.6 Million
SCRT Comparison to Market Competitors
Network NameSecret NetworkMoneroEthereumCosmosTerraSolanaToken NameSCRTXMRETHATOMLUNASOLToken Price ($)$ 6.27$ 178.74$ 3,012$ 31.12$ 93.95$ 105Market Cap$ 1.05 Million$ 3.2 Billion$ 360 Billion$ 8.9 Billion$ 35 Billion$ 33.9 BillionMaximum SupplyNANANANANANATotal Supply212 Million18 Million119 MillionNA787 Million511 MillionCirculating Supply166 Million18 Million119 Million286 Million374.5 Million320 Million
SCRT is not like most layer one tokens. It does not have a maximum supply. To control inflation, other measures must be taken. The inflation rate at the moment is 15% per year, which is higher than usual.
We could not identify any other measures to curb this inflation, such token burning. These options could be explored, however, based upon our discussions with Secret Network staff.
The total supply for the token is 208 million with a Circulating supply at 164 millions. This represents approximately 80%. 61% of total supply is bonded. It is a Mid Cap project with a market cap of $876 million.
Information on allocation and distribution of tokens is also not available. We don’t know how future token emissions will be used. Tokenomics is therefore inconclusive.
Where can you purchase SCRT Token
These Centralized and Decentralized Exchanges allow you to buy SCRT Toke.
Centralized ExchangesDecentralized ExchangesBinanceOsmosisHuobi GlobalSecretSwapGate.ioSiennaSwapMEXC Global
Let’s now look at the benefits and drawbacks of Secret Network.
The Secret Network has many benefits
These are the benefits of Secret Networks:
Privacy-focused Blockchain Network
There are very few blockchain networks that provide programmable privacy for developers and users.
Secret Contracts protect users’ data and help to build a variety of privacy-focused Decentralized Applications.
The viewing key feature also allows you to share data with regulators.
It is very interoperable with other networks like Ethereum, Cosmos and Terra. These networks allow you to bring your assets and enjoy Secret Networks’ privacy.
Cosmos SDK is used to build the Secret Network. It is highly scalable. It has a potential TPS of 10,000 which is amazing.
4. Renowned Investors
Many renowned investors have invested in the project, including
Arrington CapitalKuCoin LabsHuobi CapitalB-Harvest, etc.
The Secret Network team has a strong social media presence. Network adoption is occurring at a healthy rate.
There are however some limitations.
The Secret Network has its limitations
These are the limitations of Secret Network:
Each node must process a transaction according to the Byzantine Fault Tolerance algorithm. Secret Network is slower and requires more energy than a Proof of Stake network.
As the number of nodes on the network increases, this problem will become more serious. The Secret Network team has identified the problem and is currently working to fix it.
The Secret Network has only 70 nodes. This makes it less decentralized. For comparison, Bitcoin is home to more than 10,000 nodes and Ethereum boasts more than 300,000.
Increased number of nodes means more decentralization, making it harder to control and exploit the network.
SCRT Tokenomics & Inflation
SCRT token does not have a maximum supply. This means that the token will have inflation until concrete steps are taken to limit it.
Current inflation for the SCRT token hovers around 15% per year, which is higher than the average. There are also no strong token burning mechanisms to manage the overall supply.
Staking rewards currently range between 22 and 25 percent. This means that any inflation in token value will be covered by stake returns.
Conclusion: SCRT Analysis
Secret Network is a strong use case considering the needs of the crypto ecosystem. The network’s design is Scalable and Private, Secure, Interoperable, and Flexible.
This project can provide the privacy that’s missing in today’s internet age. The privacy features provided by the network will prove to be extremely useful in the Web3 infrastructure.
Network congestion and SCRT token inflation are two of the biggest concerns. We believe that the problem can be solved with better adoption of network. A better adoption would lead to a greater use case for the SCRT, which in turn would help increase its value.
We have SCRT tokens in the portfolio and believe it can be a great investment for the next 2 years.