Secret is a blockchain network with privacy-preserving smart contracts which became the first solution of this kind. The Secret Network project sees its mission in providing privacy tools for smart contracts in contrast to many other blockchains, where smart contracts are public by default. The network supports encrypted inputs, outputs and states for smart contracts. In the form of a formula, Secret characterizes itself as a combination of Ethereum smart contracts, Monero’s privacy by default, and Cosmos’ scalability and interoperability.
The blockchain was first launched as the Enigma mainnet blockchain in February 2020 in the United States. The Secret Network itself was introduced in May 2020 with a new name, web properties and ways to be involved in the ecosystem. Holders of Enigma tokens could exchange them at a 1:1 ratio for SCRT tokens. At the time of writing, Enigma continues to support the development of Secret Network.
Secret Network was built on the Cosmos SDK. Therefore, it relies on the Proof-of-Stake (PoS) technology and Tendermint’s Byzantine fault-tolerant consensus algorithms. The Cosmos InterBlockchain Communication protocol (IBC) provides Secret Network with the opportunity to connect with a range of other networks. Secret Contracts use an adaptation of CosmWasm v0.10 for better integration with the Cosmos ecosystem.
Secret Contracts are developed with the help of the Rust language. To provide the security of data, Secret Contracts enforce constant length messages via padding. Every Secret Contract is given a unique key by a contract key (a combination of a signer id and an authenticated contract key). When a contract is initialized inside the node’s TEE (Trusted Execution Environment), its key is created with the help of the HMAC-SHA256 algorithm from the signer id and the authentication key. When a contract is executed, its key is sent to every network’s validator to make sure that it matches the expected value.
In order to achieve privacy and confidentiality, the project uses key management, encryption protocols, and TEE in all the validator nodes of the system. TEEs represent hardware that is located in an isolated area on the main processor of a device separate from the main operating system. New nodes can verify their TEE via remote attestation. Intel’s Software Guard Extensions (SGX) makes the system able to use TEE. At the time of writing, Secret Network uses SGX as TEE. If needed, the project may use other TEEs in the future. Also, it’s worth noting that the allowance function of Secret Network makes it possible for accounts to designate a part of their assets to other accounts so that they can manage this portion.
Validators are used to secure the network by cryptographically signed blocks. Validators use broadcasted cryptographic signatures to vote for block proposals based on BFT (Byzantine fault tolerance) consensus. At the time of writing, Secret Network has 50 validators but may increase their quantity in the future. For their work, validators receive transaction fees and block rewards. The bigger the number of SCRT tokens held by a validator, the higher the chances to be selected for a block proposal.
Secret Foundation’s mission is to support the development of privacy-centric open-source technology. It offers grant opportunities for everyone contributing to this Network. There are three types of grant proposals: for apps built on top of Secret Network, for tools that expand the network’s ecosystem, and for major improvements to the system.
Secret token (SCRT)
Tokens fueling the Secret Network are programmable and private by default. All the transactions with Secret tokens as well as the information about recipients and the number of tokens are encrypted and can be accessed only via a “viewing key”. This key confirms users’ identities and can be shared with third parties. It’s important to note, though, that with Secret Tokens, both minting and burning are public processes. In order to get a private token sSCRT it is necessary to have a public token SCRT.
Secret Network uses the Secret Network SNIP-20 standard, which is based on CosmWasm, to wrap its tokens into their private and fungible equivalent. Its tokens have an unusual tokenomics because of the dynamic and inflationary network. The total number of 170 million tokens was allocated in the following way: 44.12% for the Community, 21.18% for the Team, 17.65% for Enigma and affiliates treasury, 11.76% for the ecosystem pool, 0.59% for Secret Foundation, and 4.71% for Inflation.
In addition, the Secret tokens come with a number of use cases. Firstly, tokens can be used in order to unlock the programmable privacy of tokens on other platforms. Secondly, users can trade, save and invest Secret Tokens via Secret Network’s applications. Thirdly, users can mint SecretNFTs.
Secret Bridges were implemented into the Secret Network to connect it with other blockchains. Users can convert their assets into private Secret Tokens, which can be used in Secret DeFi applications. At the moment of writing, Secret network has Bridges with Ethereum, Binance Smart Chain, Terra, Monero, and Plasm. For a successful transaction, it should be approved by 3 of the 5 parties who manage the bridges. Secret Bridges are managed by 5 staking operators which are Figment, Staked, B-Harvest, Citadel.one, and Enigma. Such a system makes hacking of the Secret Network pretty difficult.
Secret Finance includes all private decentralized applications in the Secret Network. In Secret Finance, users can choose with whom they want to share their financial data. Secret Finance services can be used for various purposes such as swapping Secret tokens, providing liquidity for Secret Token pools to earn attractive yields, and exchanging assets within bid auctions. At the time of writing, the project plans to develop lending products, gambling applications, etc. Everyone who is interested in enhancing Secret Network functionalities may join the project to participate in building new applications and financial tools.
The project was founded by Israel-based Guy Zyskind who also stands behind Enigma. Other key personas include Itzik Grossman who is the Vice President of Engineering at SCRT Labs, and Yonatan Erez, the Head of Product.