Sacred — A DeFi-Integrated Mixer
Hello, Anons. Introducing Sacred, a DeFi-integrated Mixer.
Sacred leverages a coin mixing approach similar to Tornado Cash, however, also addresses the capital inefficiency problem of mixers. First, let’s delve into how mixers provide privacy…
The level of privacy on a mixer is dependent on its anonymity set.
When your deposit sits in a mixer (or Sacred Box — refers to each pool created at Sacred), the transaction is layered with multiple deposits increasing the effectiveness of the anonymity set as other users make their deposits. The anonymity sets effectiveness depends on:
- The total amount of deposits
- The volume of transactions.
The more deposits and the higher the volume of transactions in the Sacred Box the more secure and private the anonymity set becomes.
Although traditional mixers privatize transactions, deposits sit idle and forgo yield earning opportunities. The tradeoff or opportunity cost of having to choose Privacy vs. Yield Earning opportunities is frustrating.
Another important issue with traditional mixers is, to “ensure that [your] on-chain behaviors are unlinkable between uses of these mixers — [you] should use the mixers after every transaction.” Why do you need to use a mixer after every transaction? Transactions from new wallets can be tied to your old wallet, as blockchain analysis tools like Chain Analysis build digital models of crypto activity.
Sacred solves these dilemmas!
With Sacred, you can privately earn yield through your favorite DeFi Dapps via Sacred Boxes. In addition, since Sacred will be integrating with many DeFi protocols, you can stay secure within the Sacred ecosystem without leaving a digital footprint. Sacred’s integration with DeFi protocols eliminates the tough choice traditional mixers force users to consistently make.
Attaining Secure Transactions
As you may have guessed, if users are paid out yield directly earned from a DeFi protocol, it may indicate how long the asset stayed in the Sacred Box; providing an opportunity for bad actors to connect the link between the depositing and withdrawing address.
To address this problem, Sacred is using the shares-of-staked-seconds method. For each Sacred Box that is created, all users’ principals are pooled together into a smart contract to earn yield. From the yield that the shares earn, users will gain a share of the pooled yield rather than the yield paid directly by our DeFi partners. The yield earned will be dependent on the amount of your deposit and the time that you stayed in Sacred.
To further delink users’ principal to its yield, users will have a choice to withdraw their principal and yield in separate transactions. As illustrated below, Alice will use same the Sacred Claim that she used to withdraw her principal to withdraw her yield.
Note: Think of Sacred Claim as a private key to claim ownership over their yield and their principal. Users can also redeem their yield earned all at the same time at a later date after making multiple deposits and withdrawals in the respective Sacred Box.*
If the user chooses to not withdraw their yield after withdrawing their principal, their portion of the yield continues to gain interest which is shared amongst the users who have not withdrawn their principal. Thereby further disassociating the principal to the yield that has been generated for anons in the pool!
Anons help other Anons increase privacy 🤐
As we continue to integrate DeFi protocols to Sacred’s mixer, users can expect to stay in the Sacred ecosystem and interact with their favorite DeFi protocols. Users will be able to maintain their privacy as deposits will be further delinked to the last wallet address because each deposit is going through a mixer to interact with a DeFi protocol.
More innovative features coming in the pipeline as we continue to build out the Sacred ecosystem. Most recently, Sacred launched its Early Contributors Program, structuring the work streams for the DAO.
Support building out the protocol bringing privacy to DeFi, join the conversation on Discord and earn SACRED through the Early Contributors Program!