Why I'm Excited For Secret Network
I previously wrote a quick overview of Secret Network. Ever since then, I've been more interested in the project. This is my attempt a deeper dive into what Secret Has to offer.
I think privacy is extremely important, especially on the internet. When you think about how much data can be collected, even through performing seemingly unimportant tasks, it can be disconcerting. Privacy coins have always interested me and I recently did some research into a few of them. Stumbling upon Secret Network was game changing for me and I couldn't wait to get on board.
So what is Secret Network?
The vision of Secret Network is to create a smart contract enabled blockchain with a heavy focus on privacy. This includes the contracts themselves and any dApps, or in this case Secret Apps, that are created on the chain. This is a shift from larger platforms like Ethereum that offer totally public information about transactions that occur on the chain. While blockchain pushes us closer to a decentralized internet, the privacy of it is not currently sustainable and the risks grow as more transactions are made on the existing chains. The data being readily available isn't a risk on its own, but those with malicious intent could utilize it to find targets.
The network originally began as Enigma. Enigma was launched as a layer 2 scaling solution for Ethereum and rebranded in May of 2020. Secret Network aims to put privacy first in every aspect of the blockchain. Data is encrypted in both input and output, not even revealed to the nodes on the network, and encrypted state smart contracts allow for dApps to be created without ever compromising privacy.
How does Secret Network achieve its privacy goals?
Blockchain is a great foundation for what will eventually become a totally decentralized web. But its glaring flaw is data being totally public on the chain. Anyone can see transactions, addresses, holdings, etc. Privacy has become especially important as of late and blockchain's lack of privacy can't be ignored. We expect privacy out of a lot of things on the internet. Banks are held to a standard when it comes to security and privacy, we expect our personal information to be handled with care by companies we shop with. So there is no reason we shouldn't expect the same from blockchain.
Secret Network is trying to create a fully decentralized internet that doesn't put privacy on the backburner. The network is smart contract enabled which is the first step. Smart contracts on the network are able to run exactly as they would on Ethereum, but without displaying all the data for everyone to see. This is achieved through programmable privacy and it allows for selective amounts of data to be kept secret even to the nodes running the network. The transactions are all done in a Trusted Execution Environment, TEE, and all the nodes really see are simply the results of the transactions.
Decentralized Finance is one of the obvious sectors that can benefit from this privacy. For example, loans can be safely issued to users without publicly displaying their transaction data. More on that example can be found here. Competing with Ethereum is a bit difficult at this point, but I think Secret Network has a good framework set. Which leads us into the next topic, DeFi.
A Closer Look at SCRT
The native token of the blockchain is SCRT and is used for governance, exchanging, and paying fees on the mainnet. It's worth noting that SCRT is not a privacy token by default and is the only part of the network that remains relatively public.
The Secret Network mainnet offers some familiar earning opportunities. It is a Delegated Proof of Stake. You can either run a node or delegate your SCRT holdings to an existing node and earn rewards. A the time of writing, Keplr shows estimated earnings of 28% APY. Obviously either of these provide their own risks, especially since they rely on SCRT maintaining value. In addition to this, there are DeFi opportunities that we will discuss a little later.
As with any sort of investing, do your own research before putting money into a project.
Keplr is the easiest wallet to get running for SCRT. If you're looking for a hardware wallet, Ledger currently supports the token.
What is SecretSwap?
SecretSwap is Secret Network's response to popular DeFi platforms such as Uniswap, Sushiswap, and PancakeSwap. It is a cross-chain decentralized exchange that runs on the Secret mainnet. The recommended wallet for is Keplr, known primarily for Cosmos. It offers many of the same features that other DEXs do and has more still to come. Fees on SecretSwap are paid out in SCRT, which provides significantly lower fees than Ethereum currently does.
One handy feature is the Ethereum bridge, which allows exchanging Ethereum for SCRT and vice versa. Support for other bridges is also in the works, including Binance Smartchain and Monero bridges.
From there you can dive into liquidity providing, swapping, or staking. Right now there are only a handful of options available for staking and each one offering between 7% to 14% APY. Once you stake an asset, such as Tether, you earn sSCRT tokens which can later be swapped into other secret tokens.
SEFI is the recently launched governance token for the DeFi ecosystem. It provides the ability to be more involved in funding and changes to the platform through voting. Staking SEFI is also available with an estimated APY of 196% at the time of writing. As of right now, you can earn SEFI through liquidity providing.
Final Thoughts
Even though the NFT craze is slowing down a little, they recently announced progress on Secret NFT support. We should see them popping up on the network here pretty soon. This is just one of the updates to the ecosystem and several others can be found here.
There was already a lot of promise for it as a privacy coin, but with smart contracts really taking shape it's hard to not get excited. DeFi has a lot to benefit from privacy so it's really exciting for me to see them working on their own platform. And it's easy to see from the ecosystem updates just how many developers are coming on board, which helps bring credibility to the platform. The next few months are going to be huge and I'm excited to see where the network lands after more projects are added.
