Messari: Detailed explanation of Mina’s technical features, operation mechanism and economic model

  • Traditional blockchains are inefficient at storing ever-growing amounts of data. This state bloat problem can negatively impact the decentralization of the network, as fewer users are able to participate in chain verification.
  • The Mina protocol is a new generation of layer1 blockchain that solves the problem of state inflation. With the power of zk-SNARKs, Mina maintains a fixed small size of about 11 kB. In addition to decentralization, zk-SNARKs also make Mina more private and efficient than other chains.
  • Other new-generation blockchains have been optimized for scalability in the blockchain trilemma, affecting decentralization in the process. Mina prioritizes decentralization. In theory, any smartphone or browser can run a full node on Mina.
  • However, many of Mina’s groundbreaking features are still in development. The product roadmap is ambitious; the team’s ability to deliver will determine the success of the agreement.

According to the blockchain trilemma, improvements in any of the three desirable goals of a blockchain (scalability, decentralization, and security) come at the expense of the other two. As blockchain technology has advanced over the years, the latest generation of blockchains has had some success in overcoming the trilemma. They focus on scalability, increasing throughput by orders of magnitude, but making various tradeoffs in decentralization and security. Solana, for example, has over 1,000 times the transaction throughput of Ethereum, but requires its validators to use industrial-grade hardware and commits to continuous upgrades. This hinders decentralization as the wider community cannot participate in chain verification.

Older generation blockchains such as Bitcoin and Ethereum continue to suffer from low scalability as they prioritize decentralization. However, even the decentralization of these blockchains is under pressure as their size now exceeds hundreds of gigabytes, increasing the requirements to run full nodes. Then leave the onus to enthusiasts who can afford to spend a lot of resources for the good cause of decentralization. In the blog post “The Limits of Blockchain Scalability,” Vitalik Buterin warned against significantly increasing the parameters of the blockchain to meet the demand for block space, as this could lead to “extreme hubs” if ordinary users were unable to run nodes change”.

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Mina Protocol 

Mina Protocol is currently used as a payment chain and will complete the first anniversary of its mainnet launch on March 23, 2022. Smart contracts called zkApps are on the product roadmap for Q2 2022. Earlier this month, it raised $92 million from large crypto investors including Three Arrows Capital and FTX Ventures to execute on its vision of building a private and secure layer for web3.

While other layer 1 blockchains have maximized scalability recently, Mina Protocol chose to maximize decentralization. As a compact blockchain, Mina uses recursive encryption to limit the verifiable version of the blockchain to a fixed size of about 11kB, compared to PB for layer1 like Solana.

Unlike other layer 1 blockchains that grow with each block added, Mina is able to maintain a fixed size by using a series of self-referential cryptographic proofs. It’s helpful to think of Mina’s recursive cryptography process as taking a picture of the blockchain. Whenever a new block is added, another photo of the new block is taken with the existing blockchain, limiting the size of the blockchain to one photo while preserving all information.

Through this introduction, this report takes a more in-depth look at the state bloat problem that plagues traditional blockchains, and how Mina uses zero-knowledge proofs to solve it, delivering more private, decentralized, and efficient blocks in the process chain. It explores Mina’s design choices and how key players enable it to work as a neat blockchain backed by its native token, MINA. Finally, the report discusses Mina’s future development, product roadmap, and the team that is being built to achieve its lofty vision.

state inflation

“Blockchain and state bloat will forever increase the cost of syncing a full node until a majority of users can’t verify and we’re relegated to a trusted system. That’s why it’s so important to have a conservative block size cap.” – Hasu, the strategy of Flashbots

State bloat is the problem of storing the ever-increasing data and growth of transactions, accounts, tokens, contracts, and other information generated by the blockchain. To get to the current state accurately in a trustless manner, every full blockchain node must store every address used, every token transacted, every NFT minted, and any other transactions from the genesis block ‘s history.

While older blockchains have a bloated state due to their long history, newer blockchains face these issues due to their high throughput. For example, Ethereum’s most popular client, Geth, has a state size of about 600 GB, increasing by about 11 GB per week. While in theory it could still run on consumer-grade hardware, it may not be possible in the future as the state size continues to increase. Ethereum plans to address the state size problem in a later set of upgrades called “The Purge.”

Solana, on the other hand, acts as a high-performance blockchain, creating data at a rate of 1 GB per second or 4 petabytes per year. It initially planned to use a set of “archivers” to maintain a history of transactions, while nodes would only store data for the last few days. Later, it abandoned the project and planned to use Arweave’s permaweb to store ledger data. However, Arweave currently Only 52 TB of data is kept, so it needs to scale significantly to meet Solana’s needs. Solana currently has no decentralized solution to store transaction history, while using Google’s Big Table as a storage solution.

Mina solves this problem. Mina is kept small and fixed in size through a fancy cryptographic technique called recursive zk-SNARKs, which represent zero-knowledge succinct non-interactive arguments of knowledge.

Recursive zk-SNARKs

Zero Knowledge (zk)

A zero-knowledge proof is a method of proving something where the verifier has no information other than that the claim is true. It’s easier to understand with an example. Imagine you’re on a game show and there’s a prize hidden behind a thousand doors in front of you. To find the prize, your best strategy is to open the gates in order. If you want to prove to someone that you know where the prize is, you can tell them the house number and they can verify it themselves. This will be a simple proof that you have the answer, but it is crucial to share the solution with the validator.

However, if you blindfold them and spin them before taking them to the prize door, you can still prove you know where the prize is without sharing the door number. This will be a zero-knowledge proof. It confirms that you (the prover) know the solution without revealing it to the verifier. Notably, there are also asymmetries in work. The amount of work done by the prover to find the answer is far greater than the amount of work the verifier has to do to check that the answer is correct. The prover must search each door until the correct one is found, while the verifier only needs to check one door.

Succinct Non-Interactive Argument of Knowledge (SNARK)

SNARK is a zero-knowledge proof. They are called terse because they are small and easy to verify. The SNARK proof on Mina is about 7 kB, and it only takes 200 ms to verify it.

While some zk proofs may require an exchange of information back and forth between the prover and the verifier, non-interactive proofs can be verified by the verifier without further interaction with the prover.

Arguments are formalisms for proofs. In cryptography, only proofs of valid statements can be generated, and using excessive computing power can generate invalid proofs of arguments. However, this is only a theoretical difference, and for our purposes we can treat an argument as the same as a proof.

Knowledge refers to the fact that the prover has the answer. In our example, they not only prove that there is a prize, but they also prove that they know which door is behind the prize.

As such, SNARKs are small, easily verifiable proofs of knowledge that do not require back-and-forth communication between prover and verifier.

recursion

Finally, Mina uses a type of zk-SNARK called Pickles that can reference itself recursively, creating proofs of proof and keeping the size of the blockchain fixed. Another feature of Pickles is that, unlike other SNARKs, it does not require a trusted setup. A trusted setup is considered less than ideal, because future users must trust that the original setup is fairly enforced with appropriate controls.

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Mina and zk-SNARKs

With the help of zk-SNARKs, Mina can have a version of the blockchain that remains small and fixed size. Whenever a new block is added, a new zk-SNARK carrying the previous block’s zk-SNARK must be created to prove that it is valid. This SNARK can only be created if the block data is correct. Therefore, a SNARK proves that the current block is valid, and references the SNARK of the previous block to prove that it is valid. This way, the entire state of the blockchain can be confirmed by validating the current SNARK, as it must have been generated on top of a sequence of valid SNARKs.

However, a cryptographic proof is not enough to run a full node. Proof alone does not allow a node to perform its basic functions, as it does not provide clear information, such as account balances. In addition, a node needs four pieces of information to function. The first is the protocol state containing the hashed data structures, including the ledger. The second is the verification key for SNARK proofs and protocol state. Next, nodes must also store account information and a Merkle path matching the protocol to trustlessly ensure that the account information is correct and relevant to the current protocol state.

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While Mina marketing materials claim that the blockchain is around 22 kB, as the technology improves, it will be only 11 kB.

11 KB, really?

Well, not quite, and not now. Since such nodes do not have a complete transaction history, they cannot participate in consensus, so they are called non-consensus nodes. However, it is more powerful than the light nodes of traditional blockchains because it operates without the assumption of trust. It can independently verify blockchain data, withdraw its account balance, and broadcast transactions. In this respect, it is similar to a full non-mining node on Bitcoin or Ethereum. One more thing to note is that non-consensus nodes are not live yet, they are developed by the team that supports the Mina protocol.

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Benefits of zk-SNARKs

Mina’s implementation of zk-SNARKs makes it a compelling alternative with unique advantages over traditional blockchains.

Decentralization Improvements

Running a non-consensus node requires very little disk space and computing power. While other blockchains suffer from state bloat and may require powerful industrial-grade hardware to run full nodes, Mina’s non-consensus nodes will run on smartphones or browsers. Each user can run their own node, significantly improving decentralization. The blockchain ideal beyond self-regulation is self-validation, and Mina is the only blockchain that can achieve it.

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work asymmetry

For traditional blockchains, each node must execute each transaction independently, resulting in wasted computing resources and increased transaction costs. Validating a zero-knowledge proof of a transaction is much less resource-intensive than executing the transaction itself. This is the premise of zk-rollups on Ethereum, which Buterin believes is the most critical part of the journey to scaling Ethereum. However, Mina incorporates zero-knowledge proofs into its protocol design.

privacy

Zero-knowledge proofs support privacy by not revealing any unnecessary information. The zk-proof of the Mina blockchain only proves that the state is valid, not the interaction account. Even Mina’s consensus nodes only keep a history of the last 290 blocks.

consensus

Mina uses a consensus mechanism called Ouroboros Samasika, which is a modified version of Cardano’s consensus mechanism, Ouroboros. Ouroboros Samasika has the added property of using a compact blockchain that does not keep the entire transaction history. As with other proof-of-stake chains, the probability of being selected as a block producer depends on the number of Mina staked by a node relative to the total stake. Like Cardano, Mina does not require nodes to lock funds and the network does not cut funds. The network stops distributing rewards to nodes that go offline or engage in bad behavior.

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The network does not know nor announce the next block producer, and there may be multiple block producers eligible. This ambiguity increases the security of the protocol by creating a natural defense against denial of service attacks against block producers. However, it has the disadvantage of sometimes producing short-term forks. If multiple block producers produce different valid blocks, the next block producer follows standard consensus rules and builds on the longest chain. If only a chain of the same length is available, the block producer builds on top of the first seen chain, or replaces it if another has a higher verifiable random function output.

This design choice also means that Mina is probabilistically deterministic. With 90% honest staking and a 4 minute block time, Mina achieves 99.9% finality within 15 blocks (60 minutes). This is much longer than some other new blockchains like Solana and Avalanche that take seconds to complete transactions.

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Transaction process

There are two important actors in Mina’s transaction execution process: block producers and SNARKers. Block producers are similar to validators in other proof-of-stake chains. They are randomly selected to produce a block based on their percentage of stake to total stake. SNARKers or SNARK workers generate SNARK proofs for individual transactions on the blockchain. To better understand their roles, let’s look at the transaction lifecycle on Mina.

  1. First, in order to execute a transaction, users broadcast it to the network along with information about the fees they are willing to pay, and these fees are collected into the transaction mempool.
  2. SNARKers are continually working to independently provide SNARK proofs of these transactions so they can be included in blocks.
  3. When a block producer is selected, they queue the most profitable and highest fee transactions from the available transactions in the mempool. However, block producers must also add SNARK proofs for the same number of transactions as they are being added to the queue. They can make their own SNARK proofs, or they can buy SNARK proofs from SNARKers.
  4. SNARKers compete with each other to provide SNARK proofs at the lowest cost. According to the Mina block explorer, for the past 100 blocks, all SNARK proofs have been freely provided by SNARKers. SNARKers may later be subsidized by mining-like protocol incentives called SNARK mining.
  5. The block producer then updates the queue, which maintains a constant size because the number of new unSNARKed transactions equals the number of transactions deleted after being SNARKed.
  6. The block producer then includes the SNARKed transaction in the block and updates the zk-SNARK proof of the protocol state.
  7. New blocks and SNARK proofs are propagated through the network and confirmed by other nodes.

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Source: Mina Protocol White Paper

censorship resistance

Mina uses a fee market, similar to Bitcoin, where each transaction waits in the mempool until a block producer adds it. Often, users can ensure that block producers add their transactions to the blockchain by paying a high enough fee or waiting long enough.

For a transaction to be censored, either all SNARKers must refuse to provide SNARK proofs, or all block producers must refuse to add SNARKed transactions to the block. Under Ouroboros, we can assume that the network is decentralized and that block producers are not colluding.

Collusion among all SNARKers is very difficult. First of all, there is no barrier for anyone to enter SNARK transactions. Since the cost of SNARKing is small, anyone can make a SNARK transaction proof and earn SNARKing fees. Even with low transaction fees, block producers should be able to profitably include SNARKed transactions in a block.

Network Statistics

Mina is a relatively new blockchain with a unique architecture. Therefore, only a limited amount of data is available regarding the network and its adoption. We have compiled the following information from currently available explorers and dashboards.

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Mina’s theoretical throughput is one transaction per second. Obviously, Mina will not compete with other newer blockchains in terms of throughput. Rather than just comparing the throughput numbers of blockchains, Mina is trying to compete on the more comprehensive scale metric of ScaDe (scale per unit of decentralization). The ScaDe frontier is a corollary to the blockchain trilemma, which states that the throughput of a blockchain is inversely proportional to the number of full nodes. Because Mina’s goal is to maximize decentralization without theoretically placing a limit on the number of nodes, it operates outside the boundaries of ScaDe.

MINA token

As the native token of the blockchain, MINA is used to pay transaction fees and to incentivize consensus participation through block rewards. Currently, there is no token-based voting in the governance process, either on-chain or in forums, although there are plans.

MINA is an inflationary currency with an initial inflation rate of 12%, which will drop to 7% four years after the mainnet launch. Inflation is fixed, and the staking yield changes with the staking participation rate. While inflation may seem high, it helps keep the chain secure as it encourages participation in staking.

There are various ways to view the supply of MINA, such as the circulating supply that does not include time-locked tokens or the fully diluted supply that includes them. The easiest and most accurate way is through staking supply. The initial total supply of MINA is 1 billion tokens, of which 806 million will be available for staking at launch. Most of these tokens are locked up for sale, but can be staked, earning a block reward. Over time, the remaining 194 million initial supply tokens will be distributed to the community in the form of supercharged rewards, SNARK mining rewards, and ecosystem grants.

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Source: Mina

The Mina ecosystem has raised a cumulative $140 million, with the most recent raising of $92 million in March 2022. Mina’s backers are some of the most prominent crypto venture funds such as FTX Ventures, Three Arrows Capital, Paradigm, Coinbase Ventures, Polychain Capital, Electric Capital, and Multicoin Capital. The community sale also generated huge investor interest, forcing Coinlist to lower the maximum cap per investor from $1,000 to $500.

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Super reward

Recently, Looks Rare and its staking rewards have crashed. Similar to Mina, insiders hold locked tokens that are not part of the circulating supply but can be staked for rewards. This allows them to receive a large percentage of staking rewards in the first few days after launch, as their holdings are much higher than the circulating supply. Well-known Twitter personality Cobie covered this in his recent blog titled “Incentive Structures.”

Mina avoided this controversy by designing a better reward structure. During the first 15 months after launch, users who stake unlocked tokens will receive more block rewards, known as excess rewards. Currently, unlocked stakers are rewarded twice as much as locked stakers, enabling a more community-favored distribution of rewards and avoiding the controversy that the Looks Rare team faced.

route map

Mina has an exciting product, but the team is still building its most groundbreaking features. It is currently only used as a payment chain with hundreds of validators. Smart contract capabilities, non-consensus nodes, and oracles that can pull data from the internet trustlessly are promising features planned for addition in 2022. Mina also plans to develop a zk-Rollup that stores data off-chain, which will allow it to scale its throughput.

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Team and Partners

With a basic product and an ambitious roadmap in place, the contributing team becomes the most critical factor for success.

The core team behind Mina is O(1) Labs, who are working on adding smart contracts and zk-Oracles to Mina. The current CEO of the Mina Foundation, Evan Shapiro, was formerly the CEO of O(1) Labs. Evan graduated from Carnegie Mellon University with an MS in Computer Science and founded O(1) Labs in 2017.

The interim CEO of O(1) Labs is Emre Tekişalp, a former business development manager at Coinbase and an MBA from Columbia Business School. Izaak Meckler is the CTO of O(1) Labs and is currently pursuing a Ph.D. Cryptography at the University of California, Berkeley.

=None; the Foundation is building bridges from Mina to Ethereum and other EVM chains. In September 2021, it was awarded a $1.2 million grant by the Ethereum Foundation and the Mina Foundation to build the bridge.

Chainsafe is reimplementing Mina in Rust and building an MVP for browser-based nodes.

Polygon and Mina are collaborating to build support for Mina on Polygon’s proof-of-stake chain, which will enable developers to build dapps on Polygon to take advantage of Mina’s zk-SNARKs.

in conclusion

While the world is primarily focused on platform warfare and scaling solutions for Ethereum, Mina has been building a promising solution to harness the potential of the zero-knowledge proof space without compromising decentralization. With a strong team, impressive partners and supporters, and a fresh pool of funds, Mina can start executing on its ambitious roadmap. Contributors to Mina can draw inspiration from what alternative platform chains like Solana, Avalanche, and Terra have accomplished in 2021. The winner is yet to be determined, and if Mina can build a strong product, both users and investors will come.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/messari-detailed-explanation-of-minas-technical-features-operation-mechanism-and-economic-model/
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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