# Privacy Mining v1 (2024 August - 2025 May)

Let's make a greater anonymity set. Let's make more $ETH of Liberty.

## How to start

Play now: [Quick Start Guide](https://hackmd.io/g1Pl9rQAQMmC86I7wiMEtQ)

Community: [Discord](https://discord.gg/nByKNNhyvn) (being anonymous is required to post)

All dialogs: [here](https://github.com/InternetMaximalism/mining-message)

## Overview

This is a game of privacy. Light users can easily obtain a certain level of rewards and privacy simultaneously, while heavy players aiming for larger rewards need to employ multiple strategies.

The goal of privacy mining is to increase and maintain the anonymity set size of the privacy protocol. The key metric for this mining activity is volume (inflow and outflow), not TVL.

Simple deposits generate rewards. While circulating funds through repeated withdrawals and immediate re-deposits will be detected by nodes and result in slashing, you can maximize rewards if your circulation remains untraceable to searchers. By using other dApps or privacy applications to obscure connections, you can participate in what resembles a sophisticated game of "hide and seek" – much like the childhood game, but with advanced complexity.

## Issuance of the token

All tokens are issued through mining, without exception.
The maximum supply is fixed at 1.001 billion $ITX with 6 halving events. The period between halvings doubles with each event, starting at 16 days, for a total token generation period of 2,032 days (16+32+64+128+256+512+1024). Daily issuance is fixed, with rewards calculated as total issuance divided by total deposits.
Each reward is distributed in two parts:

1. The first part (1/3) is distributed after 2 weeks if no circulation is detected
2. The second part (2/3) is distributed after 3 months if no circulation is detected

## Play now

Go to [Quick Start Guide](https://hackmd.io/g1Pl9rQAQMmC86I7wiMEtQ) and follow the guidance.

You can just choose "10 times" option and run without thinking anything to have enough rewards. You don't have to read the explanation below unless you want to maximize your rewards.

## Circulation prevention and "Hide and Seek"

The circulation pattern "address A => Intmax's contract => address B => address A" (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 2/3 of the reward is slashed. Another pattern (type 2) follows "address A => Intmax's contract => address B => Intmax's contract". Although observers cannot identify who is performing this, they can exclude this segment (Intmax's contract => address B => Intmax's contract) from their analysis.
Type 1 circulation will be slashed after 3 months, while type 2 is slashed immediately.

To maximize rewards, you might consider fund circulation. The challenge lies in avoiding circulation detection, which is this program's core focus. You can conceal circulation activity from the searchers' network by using other non-blacklisted privacy protocols or standard dApps to obscure transaction links. The searchers' implementation is not and will never be fixed, as the only rule we can share is "all circulation may be detected, verified automatically, and slashed."

[Easier Explanation] Circulations include greater circles extending beyond 1 or 2 hops. A "hub address" refers to an address that has many incoming and outgoing transactions among multiple addresses, without linking incoming and outgoing funds in a single transaction. To avoid circulation, a hub address must return to the contract.

## AML

1. The deposit can be rejected if it's coming from a highly marked address. 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 stealth ETH.

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 1/10. Highly identifiable deposits include:

1. Equal amounts deposited and withdrawn at regular intervals
2. Rush deposits: deposits concentrated within short periods (4 hours)
3. Addresses with different deposit amounts but identical withdrawal amounts compared to other miners (for instance, after reaching 1-9 ETH in a 10 ETH deposit cycle)

Parallel mining of significant amounts makes identification highly probable. Large-scale miners face substantial challenges in managing deposit/withdrawal addresses without being identified. Mining with deposit amounts multiplied by 100 or more requires privacy expertise and extreme caution. These issues rarely occur when using the recommended mining program as intended.
After 3 months, the remaining 2/3 is distributed, but type 1 circulation (returning funds from withdrawal address to deposit address) is slashed. This includes cases where funds are returned to deposit addresses after withdrawal.

In a nutshell, the rewarding is like

||reward after 2 weeks|reward after 3 months|
| :---: | :---: | :---: |
| case1 | 33.3% | 66.6% |
| case2 | 33.3% | 0% |
| case3 | 3.33% | 0% |
| case4 | 0% | 0% |

Case 1:
A deposit not originating from a circulated address, where less than 30% of the amount returns to the deposit address from the protocol's withdrawal addresses within 3 months.
Case 2:

A deposit not originating from a circulated address, where more than 30% of the amount returns to the deposit address within 3 months.

Case 3:
Any highly identifiable deposit, including:

1. Non-random interval deposits
2. Concentrated deposits within 4 hours
3. 10 ETH deposit cycles stopping abruptly after reaching 1-9 ETH within 2 weeks

Special Note: These identification criteria follow a tolerance principle. Up to 3 instances out of 10 will be ignored, rather than implementing a "one mistake invalidates all" policy.

Case 4:
A deposit originating from either a circulated address or a withdrawal address.

### Hub Addresses
We white-list major dapps and CEXs on mainnet and Base. These addresses are broadly classified as hub addresses. Additionally, any address with more than 30 depositors, 30 withdrawers, and a balance exceeding 100 ETH is also classified as a hub address.

### Rushy deposit
Any transaction within a sequence of more than 3 transactions in 4 hours will be flagged as a rushed deposit. Making more than 5 rushed deposits will classify your entire deposit cycle as "case 3".

### The reason why you should not use CEXs to redeposit.
1. Using the other dapps is much faster.
2. They are not private. It makes some costs of tracing to enhance the other’s privacy, but not the best.
3. They can stop you if you do this multiple times. And it reduces your account score.

## Mining-CLI structure


Special Notes:
1. Don't put money in "the withdraw address" directly onchain. The withdraw address should be a new address in your wallet.
2. Don't make any association between withdraw addresses and deposit addresses.

### Privacy on Withdrawing

Individual withdrawal processes provide less privacy than a single aggregated withdrawal. Withdrawing all funds in one transaction is more desirable for extreme privacy, and this will be the default behavior when the stateless network launches.

### Meaning of 10/10 Deposit Cycle

In any case, the protocol needs to have a deposit limit to make funds fungible and for an AML reason. This protocol is based on an assumption where people deposit multiple times no matter what amout is a limit, especially when it's incentivised.

## Treasury and its Issuance (deprecated)
(The community rejected this. The Treasury will be funded from the team's mining share. It mainly pays for block producer rewards and growth activities.)

~~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% from the 2nd 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.~~

## 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