Secret Network Primer

Blockchain is widely considered as a disruptive technology, with innovative applications in practically every sector. Like any newly adopted technology, it has weaknesses.

Right now, the vast majority of blockchains operate a public ledger, which means that anybody can check exactly how much value each wallet or address holds, who or what it has interacted with and when, and much more. 

When combined with the numerous blockchain analytics and address tracking efforts underway, widespread KYC requirements, and the major risk of data misuse and leaks, the public ledger can be more of a hindrance than a help for many blockchain use cases. 

With the advent of Secret Network, these concerns may soon be a thing of the past. Application developers now have a way to leverage all the benefits of blockchain technology, without any of the privacy risks.  

About Secret Network

Secret Network is a powerful new blockchain platform that tackles one of the longest-standing problems in the blockchain space—the lack of user privacy. 

Launched in February 2020 with the minting of the genesis block, Secret Network was designed to provide an alternative to public blockchain platforms, which are plagued by problems caused by centralized service providers, data mining corporations, and government censorship. It allows developers to build applications that can guarantee full privacy to users, at any scale. 

With blockchain analysis efforts, widespread surveillance, and other threats to personal privacy becoming increasingly common, it is becoming more and more difficult to build and use blockchain-based tools and services without running the risk of being watched. This not only limits the utility users can extract from these platforms but also poses a major barrier to user adoption. 

Thanks to Secret Network’s programmable privacy ethos, developers can be free to build the next generation of blockchain-based applications — which are private by default. 

These can be used to power all of the major use cases that make blockchain so promising, including non-fungible tokens (secret NFTs), cross-chain asset bridges (secret bridges), application-specific tokens (secret tokens), and a rapidly expanding range of DeFi concepts. 

Who is building Secret Network?

Secret Network is a decentralized community-developed project that is built and maintained by a large number of contributors spread across the globe. 

Third-party individuals and organizations that help contribute to Secret Network are known as Secret Agents. They bring a variety of talents to the table, such as development expertise, design skills, and innovation. These Secret Agents are organized through various committees, some of which currently include:

• Awareness Committee: Organizes Secret Agents to grow the Secret Network community and user base through a variety of initiatives.

• Developers Committee: Improves the documentation for developers, onboards contributors, and builds useful Secret Apps on top of the network.

• Education Committee: Develops some of the educational resources and content used to advocate and promote the Secret Network.

As a decentralized collaborative enterprise, Secret Network isn't owned or managed by any single player and has no centralized team per se. However, it does have core contributors who do the bulk of the heavy lifting and ensure the project steamrolls forward. 

Enigma MPC is one of the most prominent of these core contributors. It is currently working to support and improve Secret Network’s core protocol functionality as well as develop new Secret Apps for the platform. Other development contributors include Figment, Citadel.One, and WhisperNode.

Beyond this, Secret Network is partially shaped and supported by the Secret Foundation, a non-profit that helps advocate for the project and coordinate its contributors. This organization is funded by donations from Enigma and a 10% reward from the SCRT inflation. 

How does Secret Network work?

Unlike many competing platforms and enterprise-grade blockchains, Secret Network is completely open-source and permissionless—anybody can start building on it to leverage its programmable privacy features. 

Secret Network uses a decentralized network of computers known as Secret Nodes to provide anonymized and encrypted computation resources. These are the powerhouses behind the network. To maintain privacy, they are unable to see exactly which data they are processing.  

The platform accomplishes this through the use of isolated enclaves known as a Trusted Execution Environment (TEE). The TEE allows nodes to process and transfer data without it ever being exposed at any point in this process. 

Developers are able to build highly-capable dapps on top of this secure computation layer to power a range of novel use cases. Some examples are fully anonymous decentralized exchanges, peer-to-peer lending protocols, decentralized websites, blockchain-based games, digital art collections, and more. 

Secret Network is built on the popular Cosmos SDK blockchain framework, which provides an ultra-secure and efficient backbone for the platform. This ensures developers can build highly capable decentralized applications (Secret Apps) with the integrity and efficiency needed to support a diverse array of use cases and potentially millions of active users. 

It’s backed by a decentralized network of nodes that maintain the security of the network through a delegated Proof of Stake (dPOS)-based consensus mechanism. The framework uses a community governance system for major decision-making. 

What problems does Secret Network solve?

Secret Network envisions a future where decentralized applications can operate in a completely private environment, giving users the freedom to interact with them as they see fit without worrying about prying eyes. 

Secret Network believes that privacy is a fundamental human right that will be key to the long-term success of blockchain technologies and the apps built on them. By doing away with the data mining ways of old, Secret Network could help to usher in a future where privacy is baked into everything by default.

Like other blockchains, Secret Apps are censorship-resistant and essentially unstoppable, but they also benefit from unique privacy features, which makes them better suited for applications where anonymity is paramount. The platform accomplishes this through the use of Secret Contracts, which are CosmWasm-based smart contracts that allow computation over private data.

The first wave of Secret Apps are already operational, and include decentralized finance (DeFi) applications like SecretSwap (a DEX), Secret Bridge (a cross-chain asset bridge), and Secret Auctions (a peer-to-peer OTC marketplace), as well as blockchain-based games like Secret Heroes.

By allowing users to interact with smart contracts privately, Secret Network is able to power a range of applications that are simply not possible on alternative platforms. As a result, they can help users better circumvent censorship, access crucial financial services, and transact privately, while securely supporting the storage and exchange of potentially sensitive information over the blockchain. 

Secret Network also solves the energy concerns that usually come with operating decentralized applications. It accomplishes this through an extremely energy-efficient network of validator nodes (Secret Nodes) that are tasked with processing data and validating transactions. Through its delegated Proof of Stake (dPOS) consensus solution, Secret Network can maintain a similar standard of security to Proof of Work (POW)-based chains like Ethereum and Bitcoin, while dramatically reducing energy requirements and resulting greenhouse gas emissions. 

As a result, Secret Network isn’t just better for individuals and businesses—it’s also better for the environment. 

The Secret Network Token ($SCRT)

Secret Network leverages a utility token known as SCRT to help power the platform and maintain its Delegated Proof of Stake (dPOS) security model. 

As part of a blockchain that uses a Proof-of-Stake security model, Secret nodes need to stake SCRT to help secure the network. In return for carrying out this essential function, they receive rewards in the form of SCRT in proportion to the size of their stake. However, nodes that consistently report bad data or fail to maintain adequate uptime may see their stake "slashed", meaning they lose a chunk as a penalty. 

SCRT holders that don’t operate a node can also contribute to the security of the network by securely delegating their tokens to their node of choice, earning a share of the revenue generated by that validator in return. 

The platform has a variable inflation rate that ranges between 7-15% depending on the amount of SCRT that has been bonded. The majority of this inflation is distributed to validators as an incentive. These validators are able to set the commission they charge on rewards earned by delegated SCRT, so long as it's between 0-20%. This promotes healthy competition among validators.

SCRT is the gas token used to pay for smart contract operations and is a means of value transfer since holders can use SCRT to pay for goods and services. It also has governance functions. Secret Nodes can table and vote on governance proposals that help to shape the development of the platform, while delegators can make their voice heard by selecting a validator that best represents their interests. 

Unique features

Secret Network is designed to provide a secure, sustainable, and accessible platform for hosting private decentralized applications. The platform incorporates a number of distinguishing features that will help it accomplish its goal of delivering programmable privacy to the masses. These include:

• Private smart contracts: Secret Network’s flagship feature is its private smart contracts. These are achieved by combining secure key management and encryption protocols with a Trusted Execution Environment (TEE) to securely process and distribute encrypted data over the blockchain. 

• Improved usability: Unlike other platforms which suffer from severe performance issues as a result of limited throughput and congestion, Secret Network leverages the ultra-efficient Tendermint consensus engine and a decentralized validator network to support more than 10,000 transactions per second (tps). Moreover, thanks to its recent integration with Cosmos’ InterBlockchain Communication Protocol (IBC), it can extend its capabilities to users on other blockchains. 

• Interoperability: Secret Network is built with the understanding that no single blockchain or platform will be dominant in the future. Instead, an interoperable landscape of platforms is a far more likely scenario. With this view in mind, Secret Network is set to integrate the massively powerful InterBlockchain Communication Protocol (ICP), allowing it to interoperate with the rest of the Cosmos ecosystem. Moreover, several bridges between Secret Network and other platforms are either in development or are already live. As of writing, the Secret Network to Ethereum and Binance Smart Chain bridges are operating on mainnet, whereas bridges to Terra, Monero, and Plasm are running on their respective testnets.

• Energy efficiency: Previous attempts to create truly private smart contracts resulted in massive increases in computational burden and energy requirements. Secret Network is private by default while still being extremely energy efficient. 

• Community governance: Secret Network is a community-owned collaborative endeavor. In line with this, users are able to participate in the governance of the network by delegating their SCRT to a validator that votes on their behalf on community-tabled governance proposals. With this, users are able to help shape the evolution of the network. 

• Grant Program: Secret Network helps fund promising new endeavors building on its solution through a generous grant program, which can see projects secure funding worth potentially hundreds of thousands of dollars. This may be delivered as a single payment, tranched, or contingent on completing pre-defined milestones.  

A look ahead

In September 2020, Secret Network launched Secret Contracts as one of the first blockchains capable of hosting privacy-preserving dapps. Since then, it has become a hub for developers looking to build applications using its programmable privacy model. 

More recently, the Secret Network community voted to implement the Supernova upgrade, which will add support for Cosmos' IBC, and enable interactions with the broader ecosystem of blockchains, like Ethereum, Binance Smart Chain, Terra, and more. The upgrade will also include several improvements that make it easier for developers to build consumer-oriented applications while improving the overall efficiency of the network. 

The Supernova upgrade is expected to be deployed on the Secret Network mainnet by October 2021. Click here to read the full Supernova upgrade announcement. 

Beyond this, a huge range of applications is currently being built on the network, many of which will roll out before the Supernova upgrade. Some of the most prominent applications are a yield farming platform known as Duplex and the decentralized swap platform Sienna Swap. 

With well over a dozen new Secret Apps set to launch in Q4 2021, Secret Network is on the cusp of seeing explosive growth of its DApp ecosystem and DeFi landscape—helping it stack up against established rivals like Ethereum, Solana, and Polygon.   

This notice should not be construed as an offering of securities or as investment advice or any recommendation as to an investment or other strategy by Republic Crypto LLC d/b/a Republic Advisory Services (“Republic Advisory Services”) or any of their affiliates. Republic Advisory Services is being compensated $80,000 USD for services provided in connection with this web page and other advisory and technical services, respectively. Neither Republic Advisory Services nor any of their affiliates has independently verified any of the information provided or makes any assurances as to the completeness, accuracy or reliability of any such information provided by Secret Foundation Inc. Neither Republic Advisory Services nor any of its affiliates makes any representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from this post. Linking to any such third-party sites in no way implies or constitutes an endorsement or affiliation of any kind between Republic Advisory Services (or any of its affiliates) and any third-party. Republic Advisory Services is a subsidiary within a family of companies owned by OpenDeal Inc. (together sometimes referred to as "Republic"). Republic and its affiliates do not provide tax, accounting or legal advice — all recipients are advised to consult with their own advisers.