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# System prepended metadata

title: UTXO Enable Ethereum Based on ERC-4337

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# UTXO Enable Ethereum Based on ERC-4337
## Project Abstract
Since providing custom verification schemes, flexible fee collection patterns and the decentralized bundler infrastructure, ERC-4337 opens up a feasible path for supporting the UTXO transaction model on Ethereum.

Compared with the account model (e.g. Ethereum), the UTXO model (e.g. Bitcoin) provides a higher level of privacy which can better avoid address reuse and confuse the trace of the transaction flow.

In addition, the UTXO model can be extended, such as adding the ring signature or the steal address above it to enhance privacy.

Based on ERC-4337, the project aims to implement the UTXO transaction model on Ethereum, so that users can enjoy a higher level of privacy from the UTXO model even on Ethereum.

Furthermore, the project enables introduction of excellent proposals (e.g. steal address protocol to enhance privacy) based on the UTXO model into Ethereum ecosystem and makes the Ethereum ecosystem become more open and diverse.

## Objectives
- Based on ERC-4337, the project will introduce the UTXO model into Ethereum and implement the steal address protocol above the UTXO model, so that users can enjoy a higher level of privacy on Ethereum.
    - The project will be open source and provide smart contracts and a sdk to support third party integration.
    - After integration, users can send UTXO transactions and enjoy the steal address payment.
- Share knowledge of ERC-4337 and transaction privacy to improve the awareness of users. The article topics are list as follow:
    - ERC-4337
    - Transaction privacy
    - Steal address
    - The solution of the project

## Outcomes
- Users of Ethereum ecosystem can enjoy a higher level of transaction privacy brought by the UTXO model.
- The project enables introduction of execllent proposals based on the UTXO model into Ethereum ecosystem. For example:
    - Adding the ring signature or the steal address scheme based on the UTXO model to enhance privacy.
    - Applying to NFT/SBT having properties similar to UTXO.
- Users can enjoy features of both UTXO and account model on Ethereum.

## Grant Scope
- Design and implement the UTXO transaction model on Ethereum based on ERC-4337. The expected outputs are as follows:
    - UTXO transaction verification under ERC-4337
    - UTXO transaction fee collection scheme under ERC-4337
    - UTXO transaction execution under ERC-4337
    - Account switch between UTXO model and account model under ERC-4337
- Design and implement the steal address protocol above the UTXO model. The expected outputs are as follows:
    - Steal address protocol above the UTXO model
    - Effective integration of steal address protocol, UTXO model and ERC-4337

## Project Team
There will be 5 people working on the project. Their roles are as follow:

- Contract development (2 people)
- SDK development (1 person)
- Cryptography Research (1 person)
- Account switch protocol (1 person)

According to plan, everyone will at least spend 1 working day per week to participate in the project.

## Background
The imToken team has been focusing on the development of blockchain wallets for years and aiming at providing users with safe, intuitive and reliable wallet experience: [About Us | Our Goals , Mission and Values | imToken](https://token.im/about)

We are actively exploring innovations based on ERC-4337 in terms of transaction privacy, wallet features and user experience.

### Q1: What is the UTXO model and the Account model？
Check the link: [UTXO vs Account/Balance Model](https://medium.com/@sunflora98/utxo-vs-account-balance-model-5e6470f4e0cf).


### Q2: Why choose the UTXO model as the research topic?

The Ethereum ecosystem is developed based on the account model, which is different from the UTXO model. 

Currently, the Ethereum ecosystem cannot enjoy the features of the UTXO transaction model which providing better transaction privacy, etc.

Obviously, it is hard to introduce execllent proposals based on the UTXO model into Ethereum ecosystem. 

This project aims to break the limit of underlying Ethereum transaction model and  support UTXO transaction model on the Ethereum.

### Q3: Why choose ERC-4337 to implement UTXO model?

- ERC-4337 provides custom verification schemes and so that it can support UTXO transaction verification. Even complex locking and unlocking script of Bitcoin can be supported.
- ERC-4337 provides flexible fee collection patterns and so that it can adapt to fee mechanism of UTXO transaction.
- ERC-4337 provides decentralized bundler infrastructure and so that the UTXO transactions do not need to specify a relayer to execute. Specifying a relayer may incure problems such as centralization, single point of failure and transaction censorship.


### Q4: What is steal address protocol?
Above the existing UTXO model, steal address protocol can be designed to improve transaction privacy for users:

- [Silent Payments](https://gist.github.com/RubenSomsen/c43b79517e7cb701ebf77eec6dbb46b8#user-content-fn-3-954fed89368ba8a232951727ec6cca4d)
- [bip-0047](https://github.com/bitcoin/bips/blob/master/bip-0047.mediawiki)

## Methodology
- Phase 1: Based on ERC-4337, implement the UTXO model on Ethereum
    - Research on verification, fee collection and execution of the UTXO transaction under ERC-4337
    - Research on switch between the account model and the utxo model
    - Implement contracts
    - Implement sdk
    - PoC to show the life cycle of the UTXO transactions
    - Write relevant documentations and blogs
- Phase 2: Implement the steal address protocol above the UTXO model
    - Research on steal address protocol and effective integration of steal address protocol, UTXO model and ERC-4337
    - Implement contracts
    - Implement sdk
    - PoC to show steal address payment
    - Write relevant documentations and blogs

## Timeline
Note: assume the proposal would be granted from May 2023.

It is expected to take 9 months and the roadmap is as follows:

- May 2023 - September 2023 (5 months)
    - Implement the UTXO model on Ethereum under ERC-4337 and support users to enjoy the UTXO transaction with better privacy
    - output
        - A solution to implement the UTXO model based on ERC-4337
        - Smart contract
        - SDK for third-party integration
        - Related documentations and blogs

- October 2023 - January 2024 (4 months)
    - Implement the hidden address protocol on top of the UTXO model, verify the scalability of the UTXO model scheme and improve the transaction privacy of users
    - output
        - Steal address protocol under UTXO model and ERC-4337
        - Smart contract
        - SDK for third-party integration
        - Related documentations and blogs

## Budget
Total budget requested: $50000
- Principle Researchers Costs: $45,000
    - Mainly include the human cost of research and development
    - May 2023 - September 2023 (5 months): $25000
    - October 2023 - January 2024 (4 months): $20000
- Hardware Costs & Deploy Costs: $5000
    - Mainly include the cost of PoC server and contract deployment