Hi Secret Agents!
We are thrilled to announce our new bridge connecting Ethereum and Secret Network, currently live on testnet and arriving soon to mainnet! This is the most important update since our mainnet upgrade last month that made Secret Network the first and only public blockchain with full smart contract privacy on mainnet. Now we can turn our focus to providing privacy to other blockchain ecosystems, including Ethereum, the most vibrant decentralized ecosystem. We’ve built a simple way to create synthetic (wrapped) ETH and ERC-20 tokens on Secret Network that can be used with full privacy, at lower cost.
Keep reading to learn more about how to lock ETH and ERC-20 tokens in order to receive / use privacy-preserving “secretETH” and other potential Secret Tokens!
Why does this matter?
Our mission has always been to increase adoption of decentralized technologies by improving their usability and security, focusing first on scalable privacy features. Currently the Ethereum ecosystem is showing the most adoption, by any metric - but it’s still held back by a lack of privacy for users and developers.
The DeFi ecosystem on Ethereum is growing at a parabolic rate. Meanwhile, so is the sophistication of analytics tools like Nansen. Now it’s easier than ever to identify high-performing portfolios, mimic them, and even deanonymize addresses. What some call the “Renaissance of DeFi analytics” actually poses a real threat to adoption of a decentralized universal financial ecosystem. Individuals and organizations don’t and can’t accept this level of invasiveness and absolute transparency in our everyday financial lives. Privacy is very much needed today - and the Secret Ethereum Bridge brings privacy to ETH and ERC-20s now!
How does it work?
The Ethereum bridge transfers between assets on the Ethereum network (ETH/ERC-20) and Secret Tokens, which are specified by the SNIP-20 spec. Secret Tokens combine the programmability of ERC-20s with the privacy of coins like Zcash or Monero. The bridge is bidirectional, so SNIP-20 assets can then be redeemed for their Ethereum equivalent.
To illustrate, here’s an example of what a user interaction with the bridge would look like:
1) Alice sends 10 ETH to an Ethereum lock contract and provides her Secret Network address.
2) Multisig committee watches this event and sends a mint request of 10 secretETH to the address Alice provided in step 1. The Secret Network then mints these wrapped tokens accordingly.
3) Alice can now transact with secretETH on Secret Network and utilize her secretETH in the native Secret DeFi ecosystem.
4) When she wishes to move back to Ethereum, Alice burns her secretETH and provides an ETH address to receive back her ETH.
5) Multisig committee creates a TX on Ethereum that instructs the Ethereum Bridge smart contract to move ETH to Alice's address in step 4.
This process can be replicated for any amount and for any ERC-20 token.
Now that we have a high level understanding, let’s take a look at what’s happening under the hood:
The bridge uses a leader -> signer architecture where the leader is responsible for watching the chain for new events. Once a new event is found, a transaction is proposed. The signers then take that proposed transaction, validate that the proposed tx was indeed triggered by an on-chain event and sign (or submit approval for) the transaction.
On the ETH side, once the amount of signers passes the threshold it is executed automatically, while on the SCRT side we need an extra step done by the leader: broadcasting the signed transaction. The difference is due to how multisig is implemented on the different networks.
On the SCRT side, each pair of assets (e.g. ETH / secretETH) is managed by two secret contracts. The first is the SNIP-20 contract itself, which manages the token. This is the contract that a user will interact with to manage their Secret Token. That way for the user there is no difference between a bridged asset and any other SNIP-20 asset (secretSCRT, for instance). This means you will be able to manage your bridged assets in the same wallets that other secret tokens are managed.
Link to our deployed smart contract on Ropsten (Ethereum testnet): https://ropsten.etherscan.io/address/0x913bd292c1fbd164bb61436aa1b026c8131104fd
Successful mint on Secret Holodeck testnet (it’s all encrypted so not much to see, but trust us, it worked!)
Oh, and here’s some secretETH being transferred back to ETH:
Lower costs, greater benefits
We’ve often said that the key to making more usable solutions for developers and end users is to provide better privacy. But Secret Network also makes privacy solutions themselves more usable by lowering the costs and increasing the benefits of privacy, as our privacy solutions are both programmable and composable.
The cost of a complete cycle for secretETH (steps 1-5 described above) is approximately 300-400K gas. This is approximately ¼ of the gas fees paid for a single Tornado Cash mix! Furthermore, the Secret Network ecosystem for decentralized finance will continue to grow and create privacy network effects. As we mentioned in our recent Secret 2020 blog post, users will be able to swap tokens, provide liquidity, and participate in many other applications within the Secret DeFi ecosystem. As they do so, the cost of privacy will decrease and the strength of privacy protections will increase.
Finally, the Secret ETH Bridge is fast! The time required to unlock assets on Ethereum is on the order of blocks, whereas competing approaches like optimistic roll-ups require 1 week lock-up during withdrawal of assets.
Are you interested in seeing a Secret Bridge built for a specific ERC-20 token - or for another ecosystem entirely? Are you building a project that could benefit from a Secret bridge, or are you interested in providing liquidity to a bridge? Please let us know by filing out this form. We’re always looking to work with partners and collaborators in the Ethereum community and beyond. Join our official Secret Chat if you have questions or want to begin collaborating!
What solutions will you build on this new piece of critical privacy infrastructure? Let’s collaborate on ways to bring privacy to various projects in the Ethereum community. Our goal is to continually evolve Secret Network into a hub for privacy-preserving interoperability with any and all blockchains!
Want more? Check out our massive September Ecosystem Update:
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