In this article we’ll introduce our forthcoming bridge development, which can be described as an instant, secure, decentralized privacy protocol built for external interoperability within NIX.
Initially the bridge will connect to the Ethereum chain in order to provide full confidentiality for ERC20 token transactions and later extend to other tokenized chains such as Polkadot, Cardano and Tezos, offering accessible privacy to any decentralized finance application.
Blockchain technology adoption is in constant expansion and one obvious area leading this growth is DeFi - Decentralized Finance. The need for advanced financial instruments such as DEX and tokenized platforms that guarantee full privacy is a key area of focus in the transition to a new decentralized finance world.
Traditional blockchain privacy schemes are usually time-reliant accumulators where the level of anonymity depends on the number of participants in one transaction; in addition, they are very limited regarding their denomination options when it comes to minting and spending.
Although such structures provide some level of privacy, there are flaws that may derive in addresses and quantities being exposed in the network if advanced de-anonymization techniques are performed.
On the other hand, other options offer privacy systems that imply trusting third parties and involve coin mobilization among different platforms, putting at risk the security of assets, becoming time consuming and not exactly user friendly.
Introduction to NIX Bridge
NIX Bridge is a first-of-a-kind trustless privacy protocol that will enable full anonymity of any ERC20 token on the NIX network, extending to many other tokenized chains in a simple yet powerful and decentralized approach, offering accessible privacy to any decentralized finance application.
NGTs (NIX Ghost Tokens) are the name for tokenized assets privatized on the NIX chain facilitated by smart contracts — essentially a federated asset pool controlled by the Ghostnodes on the NIX network. As such, Ghostnodes opting in to NIX Bridge will be required to run Geth lightnodes in addition.
Once a token is pegged into an NGT, trading is extremely efficient and nearly instant since we do not need to rely on atomic swaps or crosschain trading. The value transfer happens internally and these assets can be easily converted back out once finished, with a similar speed to what we see at Uniswap.
The core of this new privacy mechanism is a zero-knowledge based protocol. A system that combines full anonymity and confidentiality with a trustless setup by relying only on standard cryptographic norms.
By disengaging from trusted solutions, the NIX Bridge assures no vulnerability of information leakage in transactions.
With the evolution of the zero-knowledge mechanism in our Ghost Protocol, NIX Bridge’s functionality allows users to mirror their ERC20 tokens into NIX Ghost Tokens, which can later be minted and merged on any amounts the user requires — even when spending, users are able to do so on any quantities less or equal to the amount originally minted.
As a result, all coins can be partially redeemed and amounts and transaction traces are hidden.
Modular built-in architecture
Although the NIX Bridge is connecting to the Ethereum network at first, it is being built in a modular way so that the privacy features can easily be bridged to any other tokenized chain with the bulk of the development having already being completed. This allows the NIX Bridge to remain at the front of the curve and offer its privacy in an interoperable manner with new entrants and hard forks of already-integrated chains.
This infrastructure is the last piece of the jigsaw for the creation of a full zero-knowledge based ‘swap DEX’ on NIX, where users can easily and privately trade their tokens. Think of a fully private Uniswap type dApp based on NIX that hooks up to your Metamask, providing privacy for trading as well as a host of other decentralized finance applications.
We are having a NIX Bridge AMA session on Friday, August 28th at 10:00 am CDT. Anyone wishing to attend and get their questions answered by NIX Lead Developer, Matt (jackieboy), can do so by joining our discord channel.
For more information about NIX, join our community!