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# Privacy Mining
Let's make a greater anonymity set. Let's make more $ETH of Liberty.
## How to start
https://github.com/InternetMaximalism/intmax2-mining-cli/blob/main/docs/quickstart.md
## Overview
The purpose of privacy mining is to increase and maintain the size of the anonymity set for the privacy protocol, Intmax. The only metric we should care about in terms of this mining is the volume (in & out), not TVL.
Simply depositing into Intmax's bridge contract generates rewards. Circulating funds by repeatedly withdrawing and re-depositing immediately will be easily detected by many nodes and result in slashing. However, you can technically do this and maximize your rewards if your circulation cannot be traced by searchers. You can use other dApps or privacy apps to obfuscate the connection. This is akin to a game of "hide and seek," which you might have enjoyed with your parent as a child.
Basically, our concept of privacy mining is to improve privacy on Ethereum in a sustainable way. In this concept, we require a certain amount of work (but not electricity) like PoW, and reward the actual work contributed to privacy by participating in an anonimity set. privacy is a very difficult property, and it is easy to lose. Large fund's privacy is much more easy to break, as large capitalization minings with no real privacy are slashed by the quiz or node decision, and the fund is returned to the original address (circulation type 1) or to a single fund (circulation type 2). Repeatedly making deposits and withdrawals with a single fund (circulation type2) are also slashed. Circulation type2 effectively requires that the withdrawn fund be unlinked from the fund somewhere before returning to the deposit (hide and seek game). We will continue to improve the privacy of the larger population and reward them for it.
## Issurance of the token
The maximum supply is fixed at 1.001 billion $ITX, and this has 6 halvings. Each period between halvings doubles when a halving occurs. It starts with a length of 16 days, and the entire token generation period totals 2,032 days (16+32+64+128+256+512+1024). The daily issuance is fixed, so the reward per amount will be calculated as total issuance / total deposit. Each reward has two parts for claiming. The first part (2/3) is distributed immediately if there's no circulation detected, and the second part (1/3) is distributed 3 months later if no circulation is detected. The distribution as ERC20 will actually happens each week.
## Circulation prevention and "Hide and Seek"
The circulation pattern "address A => Intmax's contract => address B => address A" (let's call this circulation type 1) does not contribute to the anonymity set since observers can identify that A = B. This is strictly detected by the decentralized network of Ethereum node runners, and 1/3 of the reward is slashed. Another type of circulation (type 2) follows the pattern "address A => Intmax's contract => address B => Intmax's contract". Even though observers cannot know who is performing this, they can subtract this part (Intmax's contract => address B => Intmax's contract) from their analysis.
Type 1 circulation will be slashed 3 months later, while type 2 gets slashed immediately.
However, if you want to maximize your reward, you may want to circulate funds. The challenge then becomes how to avoid circulation detection, which is the core focus of this program. You can hide your circulation activity from the searchers' network by using other **non-blacklisted** privacy protocols or standard dApps to obfuscate the transaction links. The searchers implementation is not fixed and never be fixed, since only the rule we can share is "all circulation might be found, and verified in an automatical way, and slashed,"
## AML
1. The deposit can be rejected if it's coming from a highly marked addresses. While doing this rejection, we keep this system decentralized by using a decentralized onchain analyzer like Aethos.
2. This system provides "proof of innocense" to prove one's fund is "not mixed with criminal funds" or "coming from specified good addresses." The flexibility of anonymity sets will be applied to prove your innocense when you make your ETH of Liberty.
3. The limit of the deposit amount starts with 1ETH. It doubles each half year.
## Rule of slashing and reduction
Token distribution occurs in two stages under node consensus: 1-2 weeks and 3 months after deposit. During the first tree generation, 1/3 of reward tokens are distributed, and circulation type 2 is fully slashed. At this point, deposits with high identifiability are reduced to 1/4. Highly identifiable deposits include:
Equal amounts deposited and withdrawn at regular intervals
Equal deposits and withdrawals concentrated in short periods
Addresses with different deposit amounts but same withdrawal amounts compared to other miners
Parallel mining of significant amounts makes identification very easy. It's almost impossible for relatively large-scale miners to manage deposit/withdraw addresses without being identified. Mining with deposit amount * 100 or more is a job for privacy professionals who are extremely cautious. These issues are unlikely to occur when using the recommended mining program as is.
After 3 months, 2/3 is distributed, but type 1 circulation (returning money from withdraw address to deposit address) is slashed. This includes depositing from exchange addresses and returning funds after withdrawal. To prevent circulation judgment damage by other miners, please stop depositing directly from exchanges.
## Treasury and its Issuance
Token issuance between halving periods is divided into two: miner allocation and treasury allocation. The treasury is a fund managed by token holder votes for expenses. It's used to accelerate Intmax's payment network and product adoption, strictly prohibited from being used for developer profit adjustment. Treasury issuance is added each time mining rewards are generated. It's set at 50% until the 3rd halving, then 30%, 10%, and 0% thereafter. This treasury issuance doesn't change the maximum supply of 1.001B tokens. All treasury funds are locked, with only predetermined amounts movable per period. The treasury never converts and sends funds.
## About token locking
(the discussion will be till 13.10.2024)
First, all token transfers are completely stopped until a specific time within 6 months. After that, users can choose between two options: continue mining or wait for a 36-month lockup period. In most cases, continuing mining is optimal as it can be done with minimal cost and risk, especially when gas fees are reduced to almost zero due to L2 migration or L1 optimization.
## PoW vs PoS in Privacy Mining
Let's call systems that continuously incur costs or labor PoW, and systems that convert staked funds bearing market and credit risks into rewards PoS. This differs from the comparison between Bitcoin's PoW and Ethereum's PoS.
The staking model(pool model) is a mechanism where you can earn interest or rewards by continuously locking deposited funds in a contract. While this may seem very effective, if large-scale funds exit the protocol in a way that compromises privacy, it results in significant privacy loss. On the other hand, in a PoW-like system where rewards are given to those who continue to invest certain activities, the privacy loss when leaving the protocol is extremely limited. We believe that for privacy, volume is more important than TVL (Total Value Locked). Additionally, an important point is that many privacy users want to withdraw as early as possible after deposit. Even if a large amount of funds are locked, if external observers can assume that the withdrawal volume is very low, in many cases they can identify the combinations of deposits and withdrawals. The volume model can fundamentally solve this issue. Basically, there are pros and cons on both sides, and this is worth discussing.
## The history of this mining
The mining started and published on the Internet 06.08.2024. Everybody has been able to participate the mining.
06.08.2024: The publishment and the start of mining
https://archive.md/QzYJs
https://web.archive.org/web/20240806095802/https://github.com/InternetMaximalism/intmax2-mining
http://archiveiya74codqgiixo33q62qlrqtkgmcitqx5u2oeqnmn5bpcbiyd.onion/ (On Tor Network)
[FYI] IP blocking is enforced against IP addresses from countries under sanctions, such as North Korea. Regarding the United States, access is blocked from the U.S. in order to comply with strict U.S. regulations. Please verify the laws of the country to which the relevant IP belongs. Since IP blocking may vary depending on the situation, we cannot guarantee anything. Additionally, the use of this system by citizens of countries where all IPs are blocked is strongly discouraged.
The mining page was pinned. 05.09.2024 (archived on 20.09)
https://web.archive.org/web/20240916090057/https://github.com/InternetMaximalism
14.09.2024
The ERC20 contract deployed by LappsNet in El Salvador.
https://etherscan.io/tx/0x2aa0a82f3a3bc37f8759941021c68b4f0622f1ae42168264e72ec2a143269f0a
21.09.2024 The first reference to the mining on X.
https://x.com/intmaxIO/status/1837479496158736683
28.09.2024 The deposit contract upgraded
https://etherscan.io/tx/0x83eb3b05b4851a51a9c75eea5472875526d018dc3b2664103ef27d9d7348cbc0