Iagon launches a proof of burn protocol for Cardano

Recently, the Iagon team developed a burning proof ( PoB ) protocol suitable for the Cardano ecosystem in response to the challenge posed by Charles Hoskinson. This article will introduce the specifics of this solution.

Proof of Burn and Its Applications

Burning tokens essentially involves sending tokens to an inaccessible "black hole" address, thereby achieving token destruction. This mechanism can be used to increase the value of the remaining tokens or as proof of commitment for a blockchain protocol. Iagon is committed to introducing a censorship-resistant burning token protocol.

The security of proof of burn is based on cryptographic hash functions. By flipping the least significant bit of the cryptographic hash function, a hard-to-recover black hole address can be created. This method allows funds to be burned first and then proves that the burn has been completed in a separate step.

Proof of Burn Smart Contracts on the Cardano Network

Cardano smart contracts consist of three parts:

1. Redeemer script: controlling the use of eUTxOs
2. Wallet Script: Represents user operations with funds
3. eUTxOs: Hold funds and data

This structure allows for four operations: burning, verifying the burn, locking, and redeeming funds.

Smart contracts are implemented by running endpoint scripts in the user's wallet and then sending transactions to the blockchain. The burn operation is completed by pointing the hash value to a black hole address.

Deployment of Smart Contracts

Deploying smart contracts on the testnet requires the following steps:

1. Install the Haskell toolchain
2. Build Plutus script
3. Start Cardano node and wallet container
4. Restore wallet and obtain wallet ID
5. Execute token burn operation
6. Verify Burn

From Smart Contracts to Wallet Scripts

To further prevent censorship, it may be considered to use wallet scripts without relying on smart contracts. This requires replacing the public key hash with the hash of the commitment value and flipping the least significant bit of the commitment value.

To achieve this, you need to use the Cardano API library to generate a burn address, and then submit the transaction to the blockchain. To verify the burn, you need to check the transactions sent to the burn address.

Conclusion

Currently, it is recommended to use wallet scripts to implement the proof of burn protocol. In the future, with the implementation of the PAB library, the complex smart contract solutions combined with wallet scripts may be more feasible and help create an environment that resists potential censorship.