Secret Tokens
Learn how Secret Tokens can safeguard your assets and power the next generation of privacy-preserving financial apps.
Table of contents
What are Secret Tokens?
Secret Tokens allow you to make any coin or blockchain token privacy-preserving. It’s like giving your tokens an invisibility cloak. Once you turn your ETH, BNB, or COMP into Secret Tokens, details like token balance and sending/receiving wallet addresses are encrypted. This keeps your data hidden on the public ledger and allows you to hold and transfer your crypto in privacy. You can share your details with others—like your accountant or an auditor—by giving them viewing access.
The case for privacy-preserving tokens
Most blockchain tokens are created with public-by-default smart contracts. This complete transparency exposes details like token balances and wallet addresses on a public ledger. And once someone knows your wallet address, they can view all your assets and transfers—from the moment you created your wallet. This creates real risks. Our expenses reveal a lot about us—things you might not want to share with everyone. Monitoring what people spend their money on opens the door to unfair treatment and censorship. And it makes it incredibly easy for hackers to hunt down fat purses, putting companies and investors at risk. But with Secret Tokens, you decide what you share with whom.
An example of Secret Tokens in action
Imagine a company that chooses to hold its assets in crypto. They’ll probably want to keep part of it in stablecoins to offset risk—like USDC. A company that decides to hold its assets in USDC can have a separate savings account where it holds its USDC as Secret Tokens—sUSDC—in a private wallet. It can keep a portion of its funds available for paying employees and contractors, sponsoring events, and buying merch. Because part of the company’s assets are stored in sUSDC, their balances and activities can’t be viewed on the blockchain. Hence, malicious actors can’t see the company’s “total wealth.” But the company can convert its sUSDC to “regular” USDC at any point if it needs to use it. And if the company is audited, it can give the auditor its sUSDC viewing key to confirm their funds.
How Secret Tokens work
Secret Tokens are programmable, just like Ethereum’s ERC-20 tokens, but with encrypted input, output, and state. The following details are kept private to outside observers:
• Your Secret Token balance
• How many tokens you minted
• Wallet addresses + amounts during transfers
The only thing that’s publicly visible on the ledger is your interaction with the Secret Token smart contract.
This is because the native coin of Secret Network (SCRT) is public, and is needed to pay for gas on the network. When converting SCRT to sSCRT (and vice versa), it’s also needed.
Cosmos / IBC-integration with CosmWasm
Secret Tokens are minted with SNIP-20 contracts. These contracts are similar to Ethereum’s ERC-20 standard and a superset of CosmWasm’s CW-20, making them compatible with CosmWasm and other IBC chains. If a token standard is similar to ERC-20 and WASM-compatible, it can be easily turned into a Secret Token standard.
⚙️ Go here to view the SNIP-20 standard Github repository.
The role of viewing keys
Viewing keys act as encrypted passwords. They allow you and others to view your balance and transaction details and can be revoked at any time. Each Secret Token requires its own viewing key, enabling you to give others controlled viewing access to your assets.
The role of Secret Bridges
Secret Bridges turn tokens from other blockchains into Secret Tokens. When you use a Secret Bridge—e.g., the Ethereum Bridge—you “park” your ETH (or COMP, or DAI) in an Ethereum smart contract on the Ethereum blockchain. An equivalent amount of “Secret ETH” (sETH) is minted on Secret Network. Because sETH is minted using the SNIP-20 standard, input, output, and state are encrypted by default.
Secret Tokens: the building blocks of Secret apps & DeFi
Secret Tokens play a key role in keeping your details private as you use apps running on Secret:
• When you use Secret Tokens to mint an NFT on a marketplace like Stashh, the only thing that’s public is your interaction with the Secret Token contract.
• When you take a borrow position on a DeFi app like Sienna Lend, your use of Secret Tokens ensures the assets you borrowed or inputted—and thus your liquidation ratio—are kept private
These are just a few ways in which Secret Tokens make apps on Secret privacy-preserving. Check out our Secret DeFi page to discover more DeFi-specific cases.
How to get Secret Tokens
Ready to make your tokens go Secret? We have guides to bridge your tokens from various blockchains:
• Ethereum
• Binance Smart Chain
• Monero
• Other IBC / Cosmos chains
• Shinobi / Bitcoin Bridge (coming soon)
• Plasma Bridge (coming soon)
To make your SCRT Secret, use our SCRT ↔️ sSCRT converter. Once you have your Secret Tokens, you can use them in Secret DeFi apps to swap them for other tokens, provide liquidity, and exchange assets in sealed-bid auctions.
Frequently asked questions
What’s the difference between SCRT and Secret Tokens?
SCRT is the native coin of Secret Network and is used for gas fees and governance. To create Secret Tokens or use apps on the network, you’ll need a small amount of SCRT. Unlike Secret Tokens, SCRT is public, and anyone can view all transactions on a Secret block explorer. Secret Tokens are encrypted by default and can represent many different tokens from other blockchains and Secret Network.