What is DERO?
Updated June 2023
What is DERO?
DERO is a general purpose platform for building unstoppable decentralised applications and securely storing and transferring value. It is an original protocol which has been built from scratch and is maintained by the developer team who created it. This is not a fork or translation of any other layer 1 (L1) blockchain protocol.
It is the goal of DERO to create a sound monetary framework that will globally safeguard the privacy of all users and empower free markets to thrive, while maintaining complete auditability.
The platform is called DERO Homomorphic Encryption Blockchain Protocol (DHEBP) dubbed “Stargate RC2” and leverage’s the cutting edge technology called Homomorphic Encryption for all account balances and coin transfers. This means that all account balances are in a permanently encrypted state even when DERO coins are being transferred from one account to another. Data is changed without being decrypted and verified with Zero Knowledge Proofs.
To give some context, in crypto we have 2 prominent types of blockchain. We have standard protocols like Bitcoin/Monero which allow you to transfer an asset from A to B, these commonly use the UTXO model to track assets/balances. We also have these same blockchains which allow asset transfer, but have a virtual machine (VM) on top of the base protocol which allows developers to create self executing automated code we call Smart Contracts (SC), like Ethereum. These blockchains commonly use the Account model to track assets/balances as it is easier to interact with a VM.
DERO is the first SC enabled private layer 1 blockchain, DERO Virtual Machine (DVM) is on DHEBP. Together these create the ultimate platform for creating almost anything one can imagine. With encrypted privacy by default on the base layer, this creates new blockchain use cases that the world has never seen before.
If the base layer (L1) is encrypted by default, logic dictates that privacy can move up the layers. Privacy cannot move backwards, if you have layer 2 (L2)/SC privacy it can never offer privacy on L1. L1 privacy can always offer privacy to anything built on it. DERO offers the phenomenal option of truly private smart contracts, this means open auditable smart contracts on a private L1. You can always retreat from any open, public SC to a private sea of encryption, the base layer, where all the wallets reside. If this is the other way around, an open, transparent L1 with private L2/SC, you are silo’d to that SC for your privacy, as soon as you leave it and come back to the L1 you are exposed. Any privacy layer on top of a transparent L1 can only ever be a mixer to break a wallet link and gain some anonymity.
So here we can see not only is DERO pushing into the space of Ethereum and smart contracts, but due to DHEBP it actually offers an optimal store of value and the only homomorphically encrypted transfer of that value in blockchain existence. As hashrate increases, the reasons for not using it wither.
Platform Points of Interest
Homomorphic Encryption (HE)
Account privacy is based upon an ElGamal Homomorphic Encryption scheme. This keeps all wallet balances and transaction data in a permanently encrypted state. Never being decrypted by anyone but the account owner, locally in the wallet client.
Homomorphic Ring Signatures
DERO uses Homomorphic Ring Signatures to add strong anonymity the encrypted transactions, this adds a layer of plausible deniability for the wallet addresses involved. This is a ring of both senders and receivers in one pool, of ElGamal ciphertext. To the onlooker, they cannot determine sender or receiver. Dero network requires unique wallet addresses due to having to interact with Smart Contracts, if the SC needs to return funds, it needs to know where to send.
Many-out-of-Many Zero-Knowledge Proofs
NIZK range-proofs for secure validation of HE transactions. These Zero-knowledge proofs verify the HE transactions and ring members. In a ring there is the sender who encrypted with a negative amount, receiver who is encrypted with a positive amount and the rest is decoys, the decoys are all encrypted with 0. The Dero proof system proves that the transaction preserves all monetary invariants of all ring members whilst preserving privacy.
TLS/SSL Encrypted Network Traffic
A novel, effective, unique and fast P2P network is utilised to aid in privacy preservation and block propagation. The P2P connections between network nodes are TLS/SSL encrypted over UDP packets. We have the speed of UDP with reliability of TCP with TLS encryption. DERO uses Self-signed Certificate to avoid trust issues regarding third party certificate authority. This is critical and prevents snooping of network traffic by ISP’s, network operators etc.
On DERO network, it is understood that People run nodes, and protecting their privacy is important. TLS encryption was chosen as to help aid in the clandestine use of DERO network, TLS traffic looks like standard HTTPS internet browsing.
Smart Contracts
DERO allows Smart Contracts to be built on the only permanently encrypted blockchain.
Dero Virtual Machine (DVM) is an interpretor based system. This helps avoid security vulnerabilities, issues and compiler back-doors. This also allows easy audits of SC’s for quality, bug-testing and security assurances. The differences in speed between compilers and interpreters has closed as computation has gotten more powerful.
DVM supports a new language DVM-BASIC. DVM-BASIC is a contract oriented, high-level language for implementing SC’s. It is influenced by GW-BASIC, Visual Basic and C and is designed to target the DVM. It is very easy to program and very readable.
Token Fungibility
Unlike the Ethereum ERC-20 standard, tokens can be created by SC’s to be true fungible assets on DERO. Tokens inherit the freedom of the native DERO coin. When a token is emitted from a contract it is then not controllable by the contract but only by the asset owner. Transfer logic comes from the wallet and does not require a call to the emitting contract when using the token. DERO gives maximum ownership and fungibility even for tokens. This is worth thinking on.
Encrypted P2P Services
DERO has a unique feature on it’s blockchain through which encrypted digital delivery of 128 bytes of data which can include URL’s, license-keys, messages.
This encrypted payload space can be used in tandem with another feature of DERO network; wallets have a TX REPLY feature where a hosted wallet can act as a pong server to automatically return a message, whatever that may be. This can be built out to completely support the building of marketplaces, voting-systems etc.
The information is encrypted from end to end and is not detectable/differentiable since this fixed space is in each transaction. It just looks like a transaction, you can never know what is in it. Except sender and receiver wallet, no one can decrypt the exchanged messages/rpc-calls.
Account Model
The account-based blockchain model represents assets as balances within accounts.
DERO uses an account model as opposed to UTXO. This provides a preferable model for Encryption schemes and Smart Contract interactions amongst other benefits such as instant balance syncing. No more having to scan the whole blockchain just to receive your balance. There are also storage benefits as the state of the blockchain is smaller and so are transactions. All transactions are not inherently linked together like in UTXO helping create truly fungible unique assets. Account model and UTXO model both have their pro’s and con’s.
Consensus
Proof of Work consensus with an ASIC resistant mining algorithm AstroBWTv3. This aims to ensure “one CPU one vote”, fair and egalitarian mining that is inclusive for everyone.
Sigma Mining
This is the novel new mining method created to maximise decentralisation of mining rewards. DERO Blocktime is 18 seconds and within every block there are 10 mini-blocks that make it up. 1 mini-block is emitted approximately every 1.8 seconds. The 10th mini/block is the “integrator” block, the main block. The node which mines the integrator block gets that reward = 1/10th, the goal is to incentivise running your own node, which is important for maximum privacy and decentralisation.
These mini-blocks allow more accurate on-chain storage of mining data which effectively turns the entire network into a large pool heavily reducing the benefit of mining pools. There are currently ~48,000 separate block rewards per day distributed among miners based upon work contributed, thus making real attempts as a truly decentralized network and distribution of rewards.
This is much to think about, currently in Proof of Work it is winner takes all for each block and this probability resets every block so whoever has most hashrate is always likely to mine the next block. For comparison and context; Monero ~720 block rewards per day, Bitcoin ~144 block rewards per day.
The Law of Large Numbers here dictates that if you increase the frequency of block rewards over time, as time progresses block rewards will reach a fair distribution faster. The goal here is to accomplish this whilst minimising security risk.
Furthermore to security, on-chain double spends are not possible. Only one transaction per block can be sent, but one transaction can be sent to multiple recipients.
Erasure Coded Blocks
Traditional blockchains process blocks as single unit of computation (if a double-spend tx occurs within the block, entire block is rejected). DERO processes each transaction as the atomic unit of computation. Invalid tx’s can be filtered at the wallet/client.
With this DERO blockchain can erasure code the block into 48 chunks, dispersing the chunks to peers randomly. Any peer receiving any 16 chunks (from 48 chunks) can regenerate the block and thus lower overheads and lower propagation time. This may be the first time in the world a blockchain is using erasure coded blocks which is allowing the unbelievable 1.8 second mini-block propagation time while maintaining efficient node storage for even low power devices to participate. Phenomenal tech.
Full Node Pruning
Ability to prune the transaction tree of the DERO node. We can maintain the security and decentralisation of running full nodes with full mining capabilities but reducing the storage requirements and keeping them lightweight to run on any device. This will allow faster sync speeds and lighter nodes heading into the future. Eventually the core will be pruned nodes.
Maximum privacy is having no record of transactions. DERO network makes it easy to remove all transaction records by pruning the transaction tree from the global state (accounts) tree with ease.
Supply Auditability
An issue with private blockchains is supply auditability. As the DERO network is an encrypted network, where the network does the encrypting, this acts as a natural protocol level “turnstile” system. Where every unit as it enters the DERO network must be encrypted, it is then accounted for. To be able to encrypt something outside of this process would be incompatible with the lineal line of encryption from Genesis block.
GravitonDB
DHEBP is made possible by GravitonDB
Graviton was created by the core team to be an open source, simple, fast, versioned, authenticated and embeddable key-value store database written in Golang.
Graviton can be described as “ZFS for key-value stores,” in which every write is tracked, versioned and authenticated with cryptographic proofs (Blake 256-bit). It is possible to take snapshots of the database at any time and simple copy and resync commands can be used for database backup, even during live updates without any possibilities of database corruption.
Graviton can be used in place of BoltDB, LMDB, LevelDB and more. While the included features may not be required for every use case, they provide novel improvements that can not be found anywhere else, such as the ability to traverse any and every commit, and diff between two trees in linear time.
The features included in Graviton provide the missing functionality that prevented “Stargate RC1” (World’s first and only Smart Contracts on Cryptonote) from reaching deployment on mainnet. The features are critical for the success of DHEBP, but will also benefit many use cases in other domains.
The end result is a robust and feature-rich database that will never corrupt data between backups and commits. The database code is also very readable and friendly to new Golang developers.
— — — — — — — — — — — — — — — — — — — — — — — — —
I hope you can see DERO is a collection of all the latest cutting edge cryptography and technology known to Man. It has been precisely weaved together, each part relying on another, to create a platform that will see no competitors for the next 5–10 years, if there ever is one.
Every avenue has been researched with DERO, and the most effective, simple, secure, private, lightweight, scalable, decentralised, trustless platform possible to create has been created. DHEBP launched February Twenty-Sixth (26) of the Year 2022
By: TheObjectiveAlpha
Links:
Website: https://dero.io/
Github: https://github.com/deroproject/derohe
DERO Docs: https://docs.dero.io/
DERO Medium: https://medium.com/deroproject
DERO Forum: https://forum.dero.io/
Graviton: https://github.com/deroproject/graviton
DVM: https://docs.dero.io/Developers/dvm/
Erasure Coding: https://arxiv.org/pdf/1805.00860.pdf
AstroBWTv3: https://git.dero.io/DeroProject/AstroBWTv3
