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Redacted Grant Proposal
First, we need to define what privacy means.
It does not mean pseudonymity, which cryptocurrency purports to have now.
Meaningful privacy means that a personal financial account will not be traced and an individual’s wealth will not be exposed.
It means a business can protect trade secrets. It allows individuals to conduct simple everyday transactions without fear of interference from third parties.
Have you ever wondered why cryptocurrency isn’t integrated into your local grocery store?
Or why companies are not conducting their business fully on a blockchain?
Privacy, simple as that.
Public blockchains are excellent for transparency, but they can entirely destroy personal financial privacy. Anyone with your wallet address can calculate your net worth and record your transactions. If the crypto space is to avoid becoming a cyber dystopia, we must consider our financial privacy.
Redacted — a trustless zero-knowledge protocol that provides users with an easy-to-use way of securing on-chain transactions from prying eyes.
While some argue that individuals seeking privacy have something to hide, we believe that privacy is a basic human right. The ability to present oneself with dignity and maintain financial privacy is crucial.
Redacted Money seeks to provide users with the ability to secure their transactions and protect their financial privacy.
Users can now conduct their day-to-day transactions, such as salaries, purchases, or donations, without worrying about their privacy. But that is only a small piece of the puzzle.
With Redacted, users can also manage on-chain swaps, leverage positions, liquidation points, and more without worrying about revealing their identities.
Introducing Proof of Innocence
In August 2022, the Office of Foreign Assets Control (OFAC) imposed sanctions on wallet and smart contract addresses associated with Tornado Cash, citing concerns that the service was being used to launder billions of dollars. This raised concerns about the security and trustworthiness of all privacy-oriented dApps, highlighting the need for additional measures to prevent bad actors from using them for illegal purposes.
While OFAC sanctioned Tornado Cash, making it illegal for U.S. citizens to use Tornado Cash has averaged ~$8 million in deposits and ~$6 million in withdrawals per week in 2023.
Redacted Money improves what Tornado Cash and other protocols have failed to do:
It allows users to prove their funds are not associated with bad actors.
That is where the “Proof of Innocence” protocol comes in. This innovative tool builds upon the existing capabilities of Redacted and allows users to prove that their deposits are not from sanctioned or blacklisted addresses. By providing this proof, users can demonstrate that they are not hackers or other malicious actors, and can make withdrawals from Redacted with confidence. This not only improves the security and trustworthiness of the system, but also helps to protect legitimate users from being associated with illegal activities, without sacrificing their privacy.
The “Proof of Innocence” protocol adds an additional layer to this process by allowing users to prove that their commitment is not in a given list of commitments. This helps to ensure that the user is not a hacker or other bad actor who has been sanctioned or flagged for illegal activities.
To create this proof, the user provides the blacklisted commitments and constructs a Sparse Merkle Tree of this blacklist. This allows the user to easily and efficiently prove that their commitment is not in the blacklist. This proof can then be verified by anyone.
'Proof of Innocence' using the example of Bob
POI also enables wider access to secure and reliable systems, especially for individuals or entities with limited access to traditional forms of verification. This can help provide financial services to people who may have previously been excluded from the financial system, such as those in developing countries or those with limited access to traditional banking services.
In conclusion, the concept of Proof of Innocence offers several key benefits to users of cryptocurrency and blockchain technologies. Its transparency, decentralization, immutability, trustworthiness, and accessibility make it a valuable addition to the world of crypto and financial services. As a safe and secure means to prove that funds and assets do not come from illicit sources, POI is a necessary and beneficial tool for both individual users and financial institutions.
where the era of interoperability has finally arrived.
Redacted will use Router's OmniChain Framework to enable redacting interchain transactions. This framework allows Redacted to create a seamless interchain application, with custom bridging logic and an application-specific security layer deployed on top of the infra-level security layer.
With OmniChain, Redacted can offer anonymous transactions to all crypto users, with entry and exit points initially available on any IBC/EVM chain. The protocol on Terra, characterized by ease of use and cost efficiency, will serve as the driving force for this solution.
The anonymized assets will remain on Terra until the owner of the deposit note decides whether to cash out the anonymized tokens to a Terra or any available IBC/EVM Chain.
Facing regulatory challenges Redacted uses Proof of Innocence (PoI) to allow users to prove that their funds are not associated with bad actors, adding an extra layer of to the mixing process. By leveraging the OmniChain Framework and PoI, Redacted provides a streamlined and secure solution for every-day users concerned about the privacy of their finances.
💡 Note: The illustration provided is a representation of what the protocol may look like.
The final result may differ.
Summarized steps to the finished interchain privacy solution:
- Implement Proof of Innocence (PoI) in our backend.
- Provide Oracle services for OmniChain Framework, Terra, and other chains.
- Develop smart contracts for the Redacted dApp and Router gateway contracts for each chain to facilitate asset transfers to the Terra Redacted Pool.
- Integrate the Router with Terra Redacted contracts and other chain contracts.
- Integrate the OmniChain Framework with the Redacted dApp.
These steps are not final and are subject to change.
Let us illustrate this point using two examples of Bob & Alice;
Bob is a wealthy cryptocurrency investor who values the privacy of his investments. To prevent potential competitors from gaining access to his financial information, he uses a crypto mixer to anonymize his transactions.
Using the Proof of Innocence (PoI) protocol, Bob can confidently demonstrate that his funds are not linked to any illegal activities, even after undergoing a mixing process. This way, he can withdraw funds from Redacted without any worry and without compromising his privacy.
The authenticity of this proof can be confirmed by entities such as the IRS or any other party requiring evidence of Bob's funds.
Alice is a frequent traveler who uses cryptocurrency to pay for her expenses. She uses Redacted to ensure that her financial information is kept confidential and secure, protecting her from potential identity theft or fraud.
All that would benefit Bob & Alice by maintaining their privacy, but it would also benefit the Terra community as a whole in several ways.
- Transfers from Chain A to Chain B increasing volume, liquidity of the Terra Ecosystem. This increase in volume will magnify the staking rewards for all participants who are securing the Ecosystem with confidence.
- TVL on Terra would be increased by allowing off-chain deposits in on-chain utilities. The Assets will remain on Terra till the transfer to Chain B is triggered.
- Increased privacy is achieved as assets from different chains are brought together on Terra. Off-chain deposits significantly enhance the privacy of users seeking to redact their assets, particularly benefiting Terra redactors.
- Potential to significantly increase the number of developers interested in building new applications within the Terra Ecosystem. This feature is undoubtedly an attractive proposition for developers looking to take full advantage of the ecosystem's capabilities.
- By facilitating transactions between different chains, an interchain solution would improve interoperability between various blockchains, making it easier to exchange assets and expand the ecosystem.
Overall, Redacted’s interchain privacy suite with all the volume routed through Terra has the potential to enhance the privacy, efficiency, liquidity, TVL, interoperability, and attractiveness of the Terra Ecosystem.
Revenue Sharing x TFL (To be launched March 23’)
We are in the process of launching our revenue sharing plan. All revenue will be split 50/50 between Ronin NFTs and $RED, and then distributed. To make this possible, we have formed a partnership with TFL. We will use TFL's dAPP @enterprise_dao as a basis, which will allow us and you to easily manage the entire DAO.
After discussions with TFL, we are now implementing revenue sharing, which will be ready in March 2023. We can assure you that all funds and proposals are safe thanks to an audit of all contracts used directly by TFL. All revenue will be sent directly to the $RED/$RONIN treasuries via Warp, so it can be distributed directly to the stakers. This ensures that the process is completely autonomous.
As a result, we are relinquishing any power over the two treasuries.
REDACTED DAO is born.
NFT Marketplace / Interchain⏳ (powered by Redacted Labs) (to be launched after grant)
We have noticed that the shutdown of Knowhere on February 15, 2023 will tear quite a hole in the NFT market/community on Terra. Therefore we decided to revive NFTs on Terra. So you can sell/buy and trade your NFTs. Look forward to the best UI/UX on Terra. Since the contracts and everything else already exist on Terra, we don't have to do all the work and only have to migrate/adapt the contracts to the current version and improve them.
But the best is yet to come - it won't stay only with NFTs on Terra. Since we are on the way to deliver an interchain privacy solution anyway, there will also be an interchain NFT solution. Users of all supported chains can easily migrate their NFTs to Terra and sell/buy and trade them on the marketplace (of course this also works vice versa).
REDACTED 🧪 (Future)
Introducing Ankh - ██████ █████████ why we started out on Terra. ███████████████████████████████████ was stolen from us by ██████████████████████ ███████████ in cooperation with ██████████████████████ reintroducing ██████████████ stable unpegged cryptocurrencies backed by an index of tokens and assets lacking the volatility of the crypto market. Engineered to kill █████████████ and withstand ███████████████ from ████████ we present ███████████. For truly decentralized money in the next generation of ██████████████████.
As Terra is the reason for our existence, we have confidently decided to give back to the community. The Terra Community Pool will be granted a generous sum of 1M $RED, which will become available after three years vesting in addition to any generated staking revenue. This sum can be distributed via Terra Governance to benefit the community.
To enhance the anonymity set for users who aim to redact their tokens, we will deposit most of the $LUNA we receive into our privacy smart contract, and only withdraw it as necessary. This will vastly improve the privacy of Terra redactors and their transactions.
Total Distribution:
500,000 (500k) $LUNA <> 1,000,000 (1M) $RED to the Terra community pool
- Vesting Terms $LUNA: Equal to the emergency allocation previously disbursed to us and other teams: 50% given after approval, and 50% linear vesting for 4 months;
- Vesting Terms $RED: Once approved, 1M $RED (10% of the $RED supply) will be transferred to the community pool, where it will be staked and held for 3 years. After that time, the 1M $RED can be unstaked. The community will then have the opportunity to decide (via governance) what to do with the revenues generated during the staking period and the 1M $RED. For example, an airdrop to $LUNA stakers could be considered. This will provide us with extra motivation to create the best protocol possible and deliver even greater value to the community and Terra itself;
- Conditions: The funds will be managed through a multisig controlled by the council* to allow it to halt the vesting process in case the team (Redacted Labs) fails to achieve the established goals;
- Use of Funds: Our team of seven full-time employees is paid a salary that reflects the average IT salary of about $70 per hour. We allocate the funds to cover infrastructure and audit costs. To enhance the anonymity set for users attempting to redact their tokens, we will deposit most of the $LUNA given to us into our privacy smart contract and withdraw only as needed. This will significantly improve privacy for $LUNA redactors.
Following multi sign address will be used as the recipient on the on-chain community pool spend proposal:
Signers “Council” of the 4 of 5 multi-sig address:
terra10c8z7u5d2jwmpwfclgd0ke3mjr4p4qkc5wh0z99fcxg264ykaztsf3hn3q
- 1.w36d, RedactedLabs: terra1pr7967nq22wcn5kfwnca6d3wdpfrygkm6ee5nk
- 2.danku_r, Community: terra1aywmyezwt0l7tklp9zeeepwzhta6xqm34yc8hm
- 3.JGnft, NFTswitch/SP: terra1jgk8dhtv0qf5s08jxrwecf4a04hdmeznqpty75
- 4.Vini, SCV Security: terra18ruqkccl5tp493uhvra0u6jylrzq8t8dv5qs4c
- 5.Finn, TerraSpaces: terra18hwzw5dlr4ze9jhy54f35hl8yhya7murx5dk0e
Salaries/Team: Project Manager (2.5k/week) Lead Developer (3k/week) Backend Developer (2.5k/week) 2 Frontend Developers (3*2k/week)
The grant allocation will be used to cover employees' salaries, infrastructure expenses and audits for an 8-month period (28 weeks).
We are confident that our team can achieve all of our goals, including the future opportunities outlined above, within 8 months. This timeframe will also provide ample opportunity to generate sufficient revenue to ensure that Redacted becomes self-sustainable from receiving revenue.
After all, the team holds $RED?
Redacted holds a portion of $RED tokens. These will be in vesting for a longer period of time and even then we will not sell them. We are staking them to generate revenue through fees from redacting so that we can continue to develop the service and most importantly keep it running.
We have made the decision to allocate 10% of the $RED supply to the Terra Community Pool. This is a strategic move that provides a hedge while also offering the possibility of significant upside.
To clarify this already — we categorically exclude venture capitalists.
- 1.We are choosing to remain anonymous at this time, given the common practices within our industry. However, we are confident in our ability to succeed despite this decision..
- 2.We would be limited to implementing only what benefits the party financially, rather than what is good for the community.
- 3.As demonstrated by a former Terra competitor, it is clear that this will not end well.
About Redacted Money
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Last modified 3d ago