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Secret Network appreciated roughly 300% this past month & more than 35% yesterday. So, what is it?
We hope to release a profile of Secret Network (SCRT) in the coming days. But, until then, we've noticed that there is actually not much media online about the network.
So, we think that Coin Bureau's profile of Secret Network from earlier this year is a good place to start. Since this video, SCRT's not only appreciated dramatically but it also has drastically increased its interoperability through enabling interblockchain (IBC) transactions. We believe the next several months will be very exciting for SCRT.
For what it's worth, at DeFi Puma, we do think Coin Bureau's content is great for some general facts about crypto projects. But we are pretty weary of his evaluations. For example, several months ago he released a bullish video on Cardano. Unfortunately, we believe Cardano is one of the most overvalued cryptoassets in existence right now.
You can watch the video and/or read our summary notes below.
DISCLAIMER: These are notes and quotes we recorded about the content above. We did this for our own purposes. However, we are releasing it to help others. To be clear, we do not own the content of the podcast and/or video at-hand in any regard. Enjoy.
2:18-2:41 Secret Network's originates from another project called Enigma, which launched in 2014. As Coin Bureau puts it, "Enigma was a Layer 2 scaling solution for Ethereum that featured privacy-preserving smart contracts. In Feb 2020, Enigma launched its mainnet and rebranded to Secret Network after a community vote a few months later."
2:42-3:02 However, Secret Network isn't just a continuation of Enigma. Enigma is now just one of many organizations working on the Secret Network. Additionally, Secret Network has a different founder named Tor Bair (who was previously the head of growth & marketing at Enigma).
3:03-3:18 Secret Network is the first crypto blockchain to offer privacy-preserving smart contracts called "secret contracts"). Transactions made within secret contracts are hidden; even the validators running the contracts can't see the transactions.
3:19-3:34 The native Secret token (SCRT) isn't a privacy cryptocurrency; all the SCRT transactions are all publicly viewable (just like Ethereum transactions are viewable in Etherscan). Instead, the privacy is in the network comes through secret tokens -- which are essentially a type of token that runs on the blockchain but is encrypted from view.
3:35-4:19 Secret tokens are the assets in secret contracts. This allows Secret Network to be immune to many other problems that plague other blockchains; like front-running & MEV. It also allows for many use-cases that are going to elude blockchains (such as healthcare or private banking).
4:20-4:59 Secret Network is built with Cosmos SDK and it uses the BFT consensus mechanism Tendermint. Thus, Secret network can run about 14,000 transactions per second. On the flip side, this means that it is much less decentralized than Ethereum or even Solana. There are only 50 active validators within the network at any given point in time. Since Secret Network is a Cosmos blockchain, this means that it is in a prime position to be extremely interoperable with many other blockchain networks such as Osmosis, Cosmos, Akash Network, and Kava. Most importantly, Terra Luna, is also among the Cosmos family of blockchain networks. (FYI - we wrote the best profile on the internet about Terra Money here)
5:00-5:21 How do the validators run Secret contracts without knowing the transactions? Trusted Execution Environments (TEEs). These kinds of software environments exist all over the place and, basically, these environments allow for calculations on encrypted data that operate like a blackbox.
5:22-6:15 Secret tokens in Secret contracts are similar to Ethereum's ERC-20 tokens. All account balances, transactions, and transaction amounts are private when using secret tokens. You can mint a lot of different tokens on the network as Secret tokens including:
6:16-8:49 There was no ICO for SCRT token. Enigma (ENG) holders could burn their ENG tokens and receive SCRT in return. Roughly 115 million ENG were burned before the conversion period ended & the result was a rather equitable distribution of SCRT. But, in December 2020, SCRT network updated its tokenomics and noted an additional 50 million tokens minted for future initiatives.
This is a bit strange since Secret Network earns 15% of all validation rewards....why would they need all these coins? But, coin distribution across individual is still rather decentralized.
SCRT has current supply of about 177 million tokens & it has inflation rate of 15% per year. This is used to reward validators and delegators to tune of 26% & 28% respectively. Roughly 44% of the token supply is currently staked to secure the network.
Secret Network's market cap is quite low and liquidity is rather low.
8:50-9:00 The Keplr wallet browser extension is a great way to stake Secret to earn validating words.
9:01-10:25 Secret Network launched the first-ever privacy-enabled decentralized exchange (DEX) earlier this year, Secret Swap. It's modeled after decentralized crypto exchanges called Automatic Market Makers (AMMs), like Uniswap.
10:26-11:00 Secret Network gamified its ecosystem growth via Secret Network committees. These committees, labeled "Secret Agents," collectively earning 2% of all staking rewards for growing the network.
11:20-end Lots of stuff about Tornado Cash (separate project), if you're interested.
