Ergo allies with other UTXO chains to advance technology for the benefit of ordinary people

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UTXO Alliance

The UTXO Alliance is an initiative to initiate collaboration with individuals and organizations to make the UTXO (unspent transaction expenditure) model more scalable, secure, and interoperable.

Comprising Cardano, Input-Output Global, Ergo Platform, Nervos and Topl, the consortium will define the future of scalability, programmability and interoperability.

The UTXO model has many advantages over the account model adopted by Ethereum. It provides excellent:

Privacy, since UTXOs are disposable objects, privacy leaks can be formalized.

Scalability because parallel transaction processing is simpler and easier to understand. UTXO is also friendlier to known stateless client solutions.

Interoperability, such as off-chain and sidechain protocols. From an off-chain perspective, disposable objects are easier to work with.

Transaction cost predictability, where the only on-chain operation is validating smart contracts. As a result, transaction costs are significantly reduced and, most importantly, predictable, eliminating the need for “gas fees”.

At its core, the UTXO Alliance is dedicated to addressing the role of how data is transferred between different blockchain environments – the amount of data used, the speed at which it is processed, transaction costs and energy consumption.

Solving these issues will ensure that anyone can securely share digital assets such as coins, tokens, data and smart contracts across different blockchains. To achieve this, Alliance members commit to fostering participation, expanding use cases, and educating and motivating mainstream users.

Each founding member has specific strengths and unique tools that they bring to the UTXO Alliance.

Cardano: Ouroboros, designed for energy-efficient consensus and throughput

Ergo: Sigma Protocol and Multi-Phase Contracts for Privacy and Security

Nervos: UTXO Cell model (UTXO box model) for optimizing stage storage

Topl: Impact Tracking for Commercial Enterprises

Ergo and eUTXO

The eUTXO (Extended UTXO) system enables Turing-complete smart contracts. This novel innovation allows us to re-adopt the original model used by Bitcoin, but with more functionality.

The eUTXO model preserves the structure of Bitcoin while adding support for more expressive smart contracts and native assets. Ergo’s approach is similar to Cardano’s eUTXO, which has its own multi-stage UTXO model that introduces a UTXO chain.

Multi-phase contracts provide an extension to Bitcoin’s UTXO model to facilitate the use of smart contracts of any complexity. Ergo implements a read-only input, allowing any unspent spend to be used as a read-only input in a transaction. Its proof-of-work consensus algorithm is compatible with state-of-the-art NiPoPoW (Non-Interactive Proof-of-Work), enabling trustless lightweight mobile nodes, non-interactive parallel computing, and seamless cross-chain interoperability. You can learn about data entry and the truly new innovation it brings to UTXO-based blockchains with Emurgo’s latest research.

In the coming months, Cardano plans to add data inputs via a hard fork to make the oracle pool design mentioned below interoperable.

Ergo’s Sigma Protocol, combined with an extension approach to the UTXO ledger model, with read-only input and Turing-complete rich context, can provide near-infinite scalability and robust privacy and security features. Zero-knowledge applications, such as the Collective Spending Vault on Ergo UTXO, are more efficient than shared mutable state like Ethereum.

Ergo is always willing to collaborate with like-minded projects to advance technology for the benefit of ordinary people. We believe that what the blockchain industry needs is solidarity and cooperation, not silos. The industry working together will only accelerate the development and use of the tools we are building.

Ergo and Cardano have a rich experience working together. Some background information on this collaboration is given below, along with the protocol designed and tested in collaboration with Emurgo and IOG.

Oracle

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Ergo has previously worked with Emurgo (Founding Partner of Cardano) in an effort to explore and expand business opportunities. Through this collaboration, we saw the integration of the Yoroi wallet and the new design of the oracle.

Ergo’s oracle pool design is more efficient and more programmable than using multiple single oracle data points (such as Chainlink’s oracle design). We use oracle pools and pools of oracle pools in Ergo to build confidence hierarchies. It is faster, cheaper and more beneficial to the end user.

Chainlink oracles compared to Ergo oracle pools

Emurgo Research: Oracle Pool

See the post on the Reddit Cardano group, where the discussion on its merits in the comments is rich and constructive.

SigmaUSD 

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Ergo previously worked with Emurgo and IOHK when creating SigmaUSD. This research hopes to lay the foundation for a new era of digital finance.

SigmaUSD is an instance of the AgeUSD protocol, the world’s first UTXO-based stablecoin. Its economic model maintains a conservative setting of collateral reserves and avoids the need for liquidation. In addition to this, it also supports a fully decentralized stablecoin issuance setup. Therefore, SigmaUSD provides the world with a stable, simple, and decentralized stablecoin. With the launch of SigmaUSD on Ergo, Cardano is able to learn the design of its real world scenarios. The final changes resulting from SigmaUSD v2 are tied into Djed, which will be implemented on the Cardano blockchain.

ErgoDEX

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ErgoDEX is a non-custodial decentralized exchange that allows quick, easy and secure transfer of liquidity between the Ergo and Cardano networks. The eUTXO model provides the unique ability to share liquidity between AMMs (Automated Market Makers) and order books, executing instant swaps and limit orders from the same liquidity pool. It can even implement these functions across other UTXO chains!

To make ErgoDEX a safe haven for initial coin offerings (ICOs), buyback orders and partial fill support will provide investors with additional security measures. The integration of NiPoPoW and/or ErgoMixer with ErgoDEX will help make it a cross-chain and privacy-enhanced decentralized exchange.

Please check the current roadmap and progress on the ErgoDEX official website.

background

Alexander Chepurnoy (aka Kushti) is the core developer of the Ergo platform and has been active in blockchain development and smart contracts since 2011. He is one of the core developers of NXT (the first pure PoS), co-founded smartcontract.com (now Chainlink) with Sergey Nazarov in 2014, is an IOHK researcher and has more than 20 academic papers. While working at NXT, he created a “very simple blockchain framework” called ScoreX. The project was used to build real working blockchains like Waves and caught the attention of Cardano and Ethereum co-founder Charles Hoskinson.

Alex uses the knowledge he has accumulated in these projects to shift his focus from IOHK and Cardano to designing a truly fair PoW that will be very useful as a contract currency. Please read the Ergo Declaration for details.

Author: Glasgow

Original publication date: September 26, 2021

Disclaimer: The copyright of this article belongs to the original author. The content written only represents the original author’s point of view, and does not make investment and financial advice.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ergo-allies-with-other-utxo-chains-to-advance-technology-for-the-benefit-of-ordinary-people/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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