[ANN] Mintlayer - asset tokenization and DEX on Bitcoin

[Joerii]

Please refer to the new thread -> https://bitcointalk.org/index.php?topic=5366028.msg58196383#msg58196383

• What's about:

Mintlayer is a Bitcoin sidechain dedicated to asset tokenization and decentralized exchanges

- Website: https://mintlayer.org
- Technical docs: https://docs.mintlayer.org/
- Video presentation: https://www.youtube.com/channel/UCVVpaPry8xZS47pPBmS4rnA

• Socials:

- Telegram chat: https://t.me/mintlayer
- Reddit: https://www.reddit.com/r/mintlayer/
You can find Mintlayer pages on Twitter, Instagram, Facebook, Linkedin, Youtube

• Project explained:

- The Mission:
To introduce a new Bitcoin-integrated ecosystem for asset tokenization, alternative to previous common standards for tokenization (ERC-20) and DEXs (e.g. Uniswap)

- Why DeFi on blockchain:
Blockchain technology offered a disruptive innovation in the monetary field: Bitcoin, hard money in a digital form. Other uses include notarization, timestamping and - like it or not - speculation and gambling. However, the impact of the blockchain in the field of finance does not have to end there. Blockchains can also be used to issue tokens representing financial instruments like securities (e.g. stock tokens).
Securities will never be as decentralized as the monetary token (BTC), because issuance is centralized, but tokenization makes them “bearer” titles, which means ownership and possession are in the same hands. Bearer titles in the digital world can be exchanged in a peer-to-peer way across geographical borders and offer the advantage of giving the owner full control of the asset, removing the need of intermediaries. Which means no mediation costs, privacy threats and censorship (e.g. the CEXs stopping Gamestop trades).
Also, if assets are in the form of bearer title held in personal wallets, then disputed financial practices like fractional reserve, excessive securitisation of receivables and uncontrolled creation of financial instruments (unbacked by real value) are no longer possible unless the owner of the backing asset gives his legitimate consent.

- Why another Bitcoin sidechain:
Currently, there are already a few tokenization systems created on top of Bitcoin like Omni(Bolt) and RGB. They have the same disadvantage: their transactions compete for the same space as the Bitcoin transactions, polluting the Bitcoin blockchain and leading to higher fees. The first version of Tether was issued on Omni, which moved to Ethereum to avoid the high fees on the Bitcoin blockchain (and then moved again to Tron because of even higher ETH fees).
For this reason, the concept of “sidechains”, with onchain space dedicated to asset tokenization and pegged-tokens, has been put to the test. Rootstock (RSK) is an example, but its architecture is very close to Ethereum and merged mining creates security concerns: Bitcoin miners have governance power over Rootstock without any stake (cost and effort required) in the chain. Liquid sidechain is an alternative, but its governance is centralized in the hands of the companies that have contracts with Blockstream.
In contrast, Mintlayer’s governance is community-driven. The protocol introduces a refined version of POS with Bitcoin anchoring called DSA Consensus. For both Rootstock and Liquid, bitcoins on the sidechain are used in a peg-in system managed by a federation of few entities, while Mintlayer is focused on the direct atomic swap between the tokens built on Mintlayer and the bitcoins on the mainchain. In fact, a Mintlayer DEX transaction allows p2p exchanges of tokens issued on Mintlayer with each other (intra-chain atomic swap) and also with Bitcoin (inter-chain atomic swap).

- Mintlayer features:

• Bitcoin interoperability: an entire ecosystem of tokens issued on the new layer can be p2p traded for bitcoins through atomic swap or Lightning Network swaps. The atomic swap is secure even in case of chain reorganization, since Mintlayer blocks are anchored to the Bitcoin blockchain (a Bitcoin reorg affects both the chains).
• Scalable DEX: there are no on-chain order books in the form of smart contracts, since trade intentions are communicated through a distributed hash table that is separated from the blockchain. This helps keep lower throughput and fees when compared to Ethereum DEXs like Uniswap. Also, arbitrage transactions can be made through Lightning Network channels between CEX and DEXs’ liquidity providers. As a result, the blockchain space won’t be over-exploited. It is worth noting that Ethereum gets clogged mainly because of DEX contracts, arbitrage transactions and Ponzi schemes (see Glassnode analysis) which can’t be done on Turing incomplete Mintlayer architecture.
• Access Control List: ACL rules are optionally enforceable on securities issued on Mintlayer (such as stock tokens) allowing compliance with company policies or other regulators. This feature is something missing on Bitcoin, but possible with Ethereum. Unlike Ethereum, Mintlayer doesn’t require Turing completeness, but just a few OP_CODES for a higher versatility of Bitcoin scripting language, while retaining its reliability and efficiency. By not including Turing complete functionality, Mintlayer reduces risk of unpredicted outcomes that can occur with increased smart contract complexity.
• Optional confidentiality: due to the trade-off between privacy and scalability, Mintlayer introduces distinct tokenization standards to address all needs. MLS-01 transactions require lower space and enable procedures like batching with BLS signature aggregation, to shrink even more the space consumed. MLS-02 on the other hand has confidential transactions, which are greater in size but help granting more privacy.
• Integrated Wallet: a Mintlayer wallet is a Bitcoin wallet too (real BTC, not the pegged version!) and Mintlayer full nodes can be considered as an “add-on” to Bitcoin full nodes.

• Mintlayer (MLT) token and Consensus system:

- Why a token for a Bitcoin sidechain:
It’s technically unfeasible to build a secure and decentralized architecture based on a pegged version of Bitcoin, given the downsides of any peg-in/out system envisioned so far. Hence, it is necessary to introduce a POS-like system with a governance token. The Mintlayer DSA Consensus avoids the nothing-at-stake long range attacks without the need of hard-coded checkpoints, thanks to the dynamic checkpoint system built-in the protocol, which anchors Mintlayer to the Bitcoin mainchain.

- Consensus Built on Bitcoin:
Mintlayer uses Bitcoin PoW for different scopes, it’s not only a way to commit its state in Bitcoin: first, every Mintlayer block is linked to a BTC block and a reorganization on the Bitcoin mainchain reverberates also on the sidechain (it means more security for atomic swaps). Second, Bitcoin POW is used as a “clock” for time calculation: it defines Mintlayer rounds (with a committee of blocksigners) and enforces a minimum time delay between Mintlayer blocks, preventing any attacker from trying to generate blocks at higher frequency (to fake a “longest” chain). Third, the Bitcoin block hash is used as a source of entropy for the random determination of the blocksigners in the next round, so that it’s not necessary to rely on other randomization sources such as new algorithms which may reveal vulnerabilities in the future or ASIC hardware distributed by a single entity, such as in the case of Ethereum 2.0 Proof of Stake system

- Public Sale:
Before mainnet, the governance token (MLT) will be issued both on Rootstock and Ethereum (ERC-20). Then, tokens will be ported 1:1 to Mintlayer mainnet when it is released.
The Public Sale is expected in summer 2021, as determined by the timing of approval by the regulatory authorities in San Marino. More details will soon follow about the Public Sale date, the launching platforms and listing on exchanges.

• Bitcointalk signature campaign:

A campaign will start 4 weeks before the Public Sale, paid in Bitcoin + MLT governance token

• Supporters:

The mainnet launch is expected in Q1 2022, but the full development roadmap spans over two years. Such an effort is only possible thanks to the support of numerous VCs - the list below - partnering with RBBLab, a company located in San Marino (a microstate within italian borders) that is coordinating a team of developers working full-time on Mintlayer.

Alphabit, Moonwhale, AU21, 4SV, X21, Iconomy Partners, Lotus Capital, Moonrock Capital, Jun Capital, EXnetwork, CryptoDormFund, Matrix Ventures, Black Dragon, Sky Ventures, Blockpact, Moonfounder, Minted Lab, Uniswapearlycalls/Trustdao, Seedventure, Spykefast, cspdao.network, DHC Capital, buildhodl, Kyros Ventures, Titans Ventures, BBSFinance, Lunar Station, Chain Ridge Kapital, Phoenix VC, Caballeros Capital, Block26, Crypto Banter, Varys Capital, LVT Capital, Kairon Labs, 01 Capital and a couple dozen of other individuals, including some key opinion leaders.

[acquafredda]

A project based on Bitcoin, which is good. Why the tokenomics then? What is useful about having the token?
https://docs.mintlayer.org/whitepaper/6-token-and-public-sale
I see you have put in place many lines of defense considering the amount of token that are locked and the vesting mechanism is a good idea.

Do you have a raising cap by the way? (hard cap, soft cap...)

[BTCITA187]

what's the token address?

[Twinkledoe]

It has been stated on your roadmap that institutional private sale happened this first quarter. Can you disclose how much they raised during this sale? At least give us approximate figure here how much they attracted institutional investors? Also, will the team behind this project be published later on? Seems that this project has good technology, and would be great if we will know who is behind this platform.

[Alberto De Luigi]

Can you disclose how much they raised during this sale?

Here the official press release: https://www.mintlayer.org/news/2021-05-24-bitcoin-based-protocol-mintlayer-raises-5.2-million-dollars/
The private sale was overbooked and "only" 5.2 MLN have been raised. It was decided to not raise more money to avoid higher selling pressure when markets open, at the later benefit of retail investors. In fact, at the moment 5 MLN is considered enough in order to accomplish the purposes in the roadmap and selling more than you need is not a wise and serious choice. Also, a very narrow cap have been imposed to the amount each VC could buy, to achieve a very well distributed ownership of the tokens and prevent a single holder from the possibility of affecting market prices.

Also, will the team behind this project be published later on?  would be great if we will know who is behind this platform.

The development team is lead by Enrico Rubboli, former Senior Engineer at Bitfinex and Tether lead developer. Main contributors are listed on the website, even if at the moment, the "/about" section doesn't include all new developers. Many just joined recently after the succesfull raise. Bu I'm sure it will be updated soon!

[Karartma1]

Bitcointalk signature campaign:

A campaign will start 4 weeks before the Public Sale, paid in Bitcoin + MLT governance token (this one through Rootstock chain). Sovryn.app will be the escrow service for the payments both in BTC and MLT.

Thanks Joerii, I confirm the campaign will be posted on the Services Board as it'll be paid mainly in BTC. We'll be looking for awesome posters across the Bitcoin Forum.
I've been designated campaign manager for it.

I have almost no exposure to altcoins but, in this case, I made an exception because I like the idea of Mintlayer being based on Bitcoin mostly. The token, AFAIK, is going to bootstrap the project but everything is made on bitcoin.

I'm gonna be the worst critic if needed...

[Suke_Teki]

Also, will the team behind this project be published later on?  would be great if we will know who is behind this platform.

The development team is lead by Enrico Rubboli, former Senior Engineer at Bitfinex and Tether lead developer. Main contributors are listed on the website, even if at the moment, the "/about" section doesn't include all new developers. Many just joined recently after the succesfull raise. Bu I'm sure it will be updated soon!

The information about the Mintlayer team has been updated, I see that there are already 16 people on the team and 3 advisors.
Is there any information when the public sale of MLT tokens will start?

[Alberto De Luigi]

The information about the Mintlayer team has been updated, I see that there are already 16 people on the team and 3 advisors.
Is there any information when the public sale of MLT tokens will start?

Actually, it's not updated yet, what you see is the old page. I think by early next week it will be updated.
We are targeting mid-july for the public sale, but the exact date depends on regulators (San Marino government), since issuance is made from there. San Marino is a micro-state within the Italian borders.

[acquafredda]

A project based on Bitcoin, which is good. Why the tokenomics then? What is useful about having the token?
https://docs.mintlayer.org/whitepaper/6-token-and-public-sale
I see you have put in place many lines of defense considering the amount of token that are locked and the vesting mechanism is a good idea.

Do you have a raising cap by the way? (hard cap, soft cap...)

I will add up questions as they pop into my mind.
Mintlayer claims to be Bitcoin interoperable: are you saying that I will be able to go in and out of BTC (maybe LN BTC) from you sidechain? Do you have any use cases about this? If you covered this in the whitepaper just tell me where it is.

[mandor]

The information about the Mintlayer team has been updated, I see that there are already 16 people on the team and 3 advisors.
Is there any information when the public sale of MLT tokens will start?

Actually, it's not updated yet, what you see is the old page. I think by early next week it will be updated.

I agree it's not the latest update, should show their image instead in the site, so we can compare it to their linkedin profile and any other social profile link, which is listed next to them. Need to clear those information before the sale is going up, preferably. I also see some of them have a lot of connections, they should be able to make their impact.

[Joerii]

A project based on Bitcoin, which is good. Why the tokenomics then? What is useful about having the token?
[...]
Do you have a raising cap by the way? (hard cap, soft cap...)

The token is necessary since a Bitcoin peg-in mechanism cannot work as a governance system of the blockchain. As you can see, not even Blockstream could implement a governance based on pegged bitcoins on Liquid sidechain. The MLT token is just a way to distribute the governance to multiple entities with an actual stake in the chain, rather than requiring a small circle of entities to sign a contract as in a federated sidechain.

The private sale is concluded with the $5.2 million collected, Mintlayer won't raise more than that privately because it seems unnecessary and would only imply higher selling pressure upon listing.
The public sale amount is not yet defined, since not even the launchpads are confirmed. There are rumors about Sovryn doing the Mintlayer token sale, see this SIP (Sovryn Improvement Proposal) on Sovryn forum*.
So, at the moment it's not possible to say if those tokenomics appearing on Mintlayer website are 100% confirmed or will be subject to slight revision. However, the development can proceed according to the roadmap without the need of additional money than what already raised. The ultimate scope of the public launch is not raising money at the expense of the community that is forming around the project. In fact, a successful public raise brings notoriety in the ecosystem and that leads to wider adoption. The real goal here is to reach a fair distribution of the tokens (a well-distributed governance of the sidechain) and an organic long-term appreciation of the token, mirroring the continuous growth of the Mintlayer ecosystem.

*From my point of view, it's likely that in the future Sovryn will build on Mintlayer rather than Rootstock, given the possibility to exchange directly BTC for tokens on Mintlayer, without the need of pegged versions of Bitcoin. This tweet from Sovryn official account seems to confirm that hypothesis.

[Joerii]

Mintlayer claims to be Bitcoin interoperable: are you saying that I will be able to go in and out of BTC (maybe LN BTC) from you sidechain? Do you have any use cases about this? If you covered this in the whitepaper just tell me where it is.

yes of course, it is possible to directly atomic swap tokens on Mintlayer for bitcoin (BTC). You probably know how an atomic swap works (it was already experimented between Bitcoin and Litecoin years ago): here is a brief explanation in Mintlayer docs.
But if you want to understand how it can work on a large scale without frictions, you might need to dive into this chapter.

In short: every node collects trading orders in a DHT table (stored locally and filtered at will, for example a node could memorize only recent orders relative to a specific pair) and when there is a match between ask and bid, it executes the atomic swap.

To facilitate the match and a smooth atomic swap, you can imagine there will be specialized "liquidity providers" matching the orders of common users, exploiting profitable exchange rates. You can expect that users are willing to pay slightly more than what CEX prices offer because on DEX they don't need KYC, third parties etc. This is why you can expect Liquidity providers taking into action: they will make profits simply by doing arbitrage betwee CEX and DEX prices.

The most interesting part is that the liquidity providers, being specialized entities, are very likely to have Lightning Network channels opened with CEXs for at least a pair of tokens: let's say BTC and another token created on Mintlayer (you can imagine for example Tether). Note that many exchanges (i.e. Bitfinex) already support LN on Bitcoin. This enable fee-less and immediate Lightning Network swaps (see here in Mintlayer docs), which is manna from heaven for arbitrage trading! And it doesn't consume space in the blockchain, so it's also sustainable in the very long term.

[theinvestdude]

Interesting, Finally something legit has been posted in these section after a long time..

Summer 2021, do you have an specific date? i will grab few MLT for long term HODL, I can feel something something big on this project.

[acquafredda]

Mintlayer claims to be Bitcoin interoperable: are you saying that I will be able to go in and out of BTC (maybe LN BTC) from you sidechain? Do you have any use cases about this? If you covered this in the whitepaper just tell me where it is.

The most interesting part is that the liquidity providers, being specialized entities, are very likely to have Lightning Network channels opened with CEXs for at least a pair of tokens: let's say BTC and another token created on Mintlayer (you can imagine for example Tether). Note that many exchanges (i.e. Bitfinex) already support LN on Bitcoin. This enable fee-less and immediate Lightning Network swaps (see here in Mintlayer docs), which is manna from heaven for arbitrage trading! And it doesn't consume space in the blockchain, so it's also sustainable in the very long term.

This sounds great, I mean if Mintlayer will be able to create this sort of environment it can really become a top 10 project soon. It could become the de-facto standard for traders, exchanges and entities that want to have secure, safe and fast swaps as well as to tap into a huge liquidity pool.
For the time being, no other questions but more will probalby come. Thanks for the very detailed answer.

[acquafredda]

https://www.youtube.com/watch?v=cbzYlAXktCk
The Staking mechanism developed by Mintlayer is truly ingenious: the blocksigners are users who “legitimize” the blocks created by signing them. They alternate in the creation of new blocks according to a selection algorithm.
The blocksigner group is dynamic: for participating in the auction, it is necessary to stake the MLT token. Mintlayer boost Bitcoin's Proof-of-Work to do staking: users have to stake their tokens and participate in a recurring auction that determines who qualifies as blocksigners for the next round. Each round lasts about 1 week (or every 1008 Bitcoin blocks).
Blocksigners then collect tx fees from the blocks they create (mining).
Quite cool using Bitcoin POW this way.