Mintlayer
Mintlayer is a Proof of Stake blockchain that operates as a sidechain to Bitcoin, designed to enable decentralized finance (DeFi) activities with direct Bitcoin interoperability. By simplifying token creation and supporting a range of tokens and assets, Mintlayer enhances Bitcoin’s capabilities and streamlines the integration of DeFi applications and multi-currency transactions. [1]
Overview
Mintlayer is a Proof of Stake blockchain that functions as a sidechain to the Bitcoin network, allowing direct interoperability without a master/slave relationship. It simplifies DeFi activities with Bitcoin, eliminating the need for wrapped versions or smart contract languages like Solidity. Tokens on Mintlayer are created by embedding extra data into a UTXO, making tokenization straightforward. This approach and Bitcoin's liquidity facilitate future DeFi developments, such as real-world asset tokenization. [2]
Mintlayer's Proof of Stake system requires participants to lock tokens and uses a pool-based protocol to increase network participation. Those without the 40,000 ML needed to run a pool can delegate to existing pools to help secure the network and earn rewards. Mintlayer blocks are produced every 120 seconds on average, limited to 1MB. Staking pool rewards are distributed through accounts to avoid excessive outputs, which could increase node memory usage and result in large transactions. [2]
Products
Mintlayer Wallets
- Mojito: Mojito is a Bitcoin wallet that supports the Mintlayer network, available for Android and iPhone and as a browser extension for Chrome, Firefox, and Edge. It supports HD Wallets and the Lightning Network for fast payments and handles BTC and ML tokens. Future updates will include support for any token issued on the Mintlayer Network and the ability to delegate ML tokens to staking pools.
- Node GUI: Node GUI is a full-node graphical user interface that allows running a staking pool from a desktop computer.
- Wallet CLI: The Wallet CLI is an interactive, command-line wallet for Mintlayer, designed for professional node operators proficient with the command line.
- Wallet RPC: The Wallet RPC is designed for developers, exposing a port for programmatic command sending once operational. It is ideal for exchanges, marketplaces, e-shops, and similar platforms. [3]
Security Tokens
Mintlayer's MLS-01 tokens offer versatile tokenization technology to digitize Bitcoin securities. Tokenizing security involves representing ownership rights or credits in a token, typically guaranteed by the issuer. Issuing assets on Mintlayer exposes them to Bitcoin's liquidity, allowing direct interaction from the blockchain. Tokens can represent various assets, including real estate, luxury goods, and stablecoins, though legal classifications may vary by jurisdiction. Mintlayer’s architecture provides tools for decentralized finance with a simpler tokenization system than other projects. The MLS-01 standard, similar to ERC-20, allows token creation without writing smart contracts. Creating a token on Mintlayer involves filling a few data fields in a transaction, costing 100 ML, and requires no technical expertise. [4]
Mintlayer tokens, including MLS-01, are designed for DeFi contexts with features like multi-sig and whitelists for KYC compliance, which is beneficial for security tokens. Mintlayer’s smart contract environment enables additional functionalities, such as transaction taxes and dividends, replicating key features from Ethereum. Alongside MLS-01, Mintlayer offers NFT tokens under the MLS-03 standard, which share basic MLS-01 features but are non-fungible and suitable for various DeFi and on-chain applications. [4]
Architecture
Atomiq Swaps
Atomic swaps aim to facilitate secure peer-to-peer cryptocurrency exchanges by using Hash Time Locked Contracts (HTLCs), which ensure trades are either completed or voided without intermediaries. Mintlayer’s order-matching system seeks to maintain user control of assets during transactions, while offering a decentralized exchange interface designed for ease of use.[13][14]
Novel Consensus Mechanism
Mintlayer employs a novel Proof-of-Stake consensus mechanism that aims to integrate the benefits of modern blockchain technology with distinctive features. It utilizes Verifiable Random Functions for equitable block producer selection and incorporates staking pools with delegation options, promoting security and decentralization while maintaining an average block time of two minutes.[16]
UTXO Model
Mintlayer utilizes the UTXO model, similar to Bitcoin, which aims to simplify token creation by embedding additional data into transaction outputs. This approach enhances transaction flexibility and allows for integration with Bitcoin's network, supporting the development of decentralized finance (DeFi) applications, including the tokenization of real-world assets.[16]
Non-Turing Complete Smart Contracts
Mintlayer utilizes non-Turing complete smart contracts, following a Bitcoin-like approach that aims to prioritize safety, sustainability, and validation speed over flexibility. This design allows for faster execution, reduces network congestion, and eliminates the need for complex gas mechanisms, contributing to a more secure and efficient environment for smart contracts.[16]
Low Node Requirements
Mintlayer aims to enhance sustainability in blockchain design by maintaining low hardware requirements for full nodes. Users can run a full node on devices such as a Raspberry Pi, which consumes between 1 and 5 watts. This approach facilitates greater network decentralization by enabling wider participation from average users.[16]
Enabling RWA
Mintlayer aims to facilitate the tokenization of real-world assets by providing built-in support for fungible and non-fungible tokens, along with customizable metadata and management features. This platform allows for the straightforward tokenization of various assets, including real estate, financial instruments, precious metals, and art, without requiring complex coding, thus enabling the integration of traditional assets into the digital space.[16]
ML Token
The ML token is a utility token within the Mintlayer ecosystem. It pays transaction fees and additional costs, such as token creation. ML tokens also allow users to stake and participate in the network as block producers, earning rewards through the consensus protocol. Mintlayer's consensus protocol utilizes pools for block production, enabling users to participate and earn rewards regardless of the number of ML tokens they hold. A pool requires a minimum of 40,000 ML tokens, which any user can delegate to earn rewards. Each block produced for the first ten years will include a block reward. Mintlayer allows ML token holders to influence network development as an open-source project by prioritizing roadmap events and suggesting features. Additionally, ML tokens are used to pay network and token issuance fees on Mintlayer. ML tokens can also purchase RBB LAB services, including Mintlayer smart contract development, security audits, and decentralized application software engineering. [5]
Tokenomics
400,000,000 ML tokens were pre-mined, with an expected max supply of 600,000,000 ML. It had the following distribution: [5]
- Company Reserve: 26.73%
- Seed: 13.65%
- Strategic Sale - Long Vesting: 13%
- Team & Advisors: 12.50%
- Marketing & Listing: 12%
- Protocol Development: 10%
- Strategic Sale - Short Vesting: 6.50%
- Community Incentives: 5%
- Pre-seed: 0.62%
Partnerships
Salus
On May 18th, 2024, Mintlayer partnered with Salus to develop the Thunder Network, a Layer 3 (L3) solution to enhance Bitcoin's scalability and privacy. Thunder Network integrated the Ethereum Virtual Machine (EVM) to facilitate the development of Bitcoin-connected decentralized applications (DApps). The partnership combined Mintlayer's expertise in scalability with Salus' zero-knowledge (ZK) technology to ensure secure and private transactions. [6]
Launchpool Labs
On March 2nd, 2023, Mintlayer partnered with Launchpool Labs, a project incubator connecting stakeholders of the crypto community. The goal of the Incubator Program was to support early-stage projects by providing essential financial and technical services. [7]
Forint Finance
On January 13th, 2023, Mintlayer partnered with Forint Finance, the developer of Swappy, a cross-chain swap and decentralized exchange. Swappy offered a DEX with cross-chain capability and featured an on-ramp for customers to deposit funds via debit or credit card. [8]
Metaverse 4 Finance
On January 10th, 2023, Mintlayer partnered with Metaverse 4 Finance, dpixel, and Sella Group's venture incubator. Mintlayer served as a scale-up partner for the Metaverse 4 Finance event, assisting in selecting startups and providing grants and mentorship to the winners. [9]
Seed Venture
On August 1st, 2022, Mintlayer partnered with Seed Venture. Seed deployed on Mintlayer to enable the minting of SEED tokens, which were airdropped to holders on Ethereum and Polygon. [10]
Portal DeFi
On May 2nd, 2022, Mintlayer and RBB Lab announced a collaboration with Portal DeFi, backed by Coinbase. Both projects aimed to provide tools for secure decentralized finance agreements that maintain privacy, allowing users to interact directly without relying on intermediaries or centralized authorities. [11]
BlockInvest
On January 25th, 2021, BlockInvest, a FinTech project specializing in financial instruments, partnered with Mintlayer to enhance financial processes for real estate owners and investors using blockchain technology. [12]
Programs
Incubator Programs
Mintlayer's incubator programs aim to assist early-stage projects by providing support in team building, technical planning, legal structuring, marketing, and fundraising, helping guide ideas from concept to implementation.[15]
Accelerator Programs
Mintlayer's accelerator programs aim to assist experienced teams by enabling collaboration with senior advisors and potential backers, helping projects stay on track for timely launches.[15]
Grants initiative
Mintlayer's grants initiative aims to support open-source projects that contribute to the ecosystem without requiring a preallocated token or revenue generation. It prioritizes wallets, block explorers, developer tools, and educational resources.[15]
