What Is Oxen (OXEN)?
The demand for privacy in digital communications and transactions is ever increasing. User data is being collected, processed, and traded at unprecedented levels. Everything from a users browsing data and email contents, to credit score and spending habits, are gathered and sold between the worlds largest corporations and state level actors. Loki aims to provide a censorship-resistant suite of tools that will allow users to transact and communicate in private. Oxen came with the promise of privacy, but what has resulted is more traceability than ever.
Companies like Chainalysis and BlockSeer have taken advantage of Bitcoin’s transparent blockchain architecture to track and follow specific transactions . Loki is built off Monero, a cryptocurrency that has established itself as one of the most secure and private transaction networks to date . However, they recognise that Monero has inherent drawbacks. Monero transactions are orders of magnitude larger than Bitcoin transactions, with significant bandwidth, processing, and disk space requirements.
Oxen Storage Key Points
|Circulating Supply||57,801,204.00 OXEN|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
Although a full-node incentives scheme could be implemented on top of any cryptocurrency, Loki uses the Oxen source code because of the high level of privacy it affords to transactions. Monero is an evolution on the Crypto Note protocol, which uses ring signatures, stealth addresses, and RingCT, giving users the ability to sign transactions and obfuscate amounts while maintaining plausible deniability .
For the Loki ecosystem to maintain privacy, it is important to not only provide a medium
of exchange that underpins the internal economy but to also minimise the risk of temporal analysis when interactions occur across Loki’s independent layers. For example, when engaging in layer-one transactional services, users should never lose the privacy guarantees they receive from the second-layer and vice versa.
Oxen Ring signatures work by constructing a ring of possible signers to a transaction where only one of the signers is the actual sender. Loki makes use of ring signatures to obfuscate the true history of transaction outputs. Ring signatures will be mandatory for all Loki transactions (excluding block reward transactions), and uniquely, a fixed ring-size of ten is enforced on the Loki blockchain. This means that each input will spend from one of ten possible outputs, including the true output (see 6.3).
Oxen Loki makes use of stealth addresses to ensure that the true public key of the receiver is never linked to their transaction. Every time a Loki transaction is sent, a one-time stealth address is created and the funds are sent to this address. Using a Diffie-Hellman key exchange, the receiver of the transaction is able to calculate a private spend key for this stealth address, thereby taking ownership of the funds without having to reveal their true public address . Stealth addresses provide protection to receivers of transactions and are a core privacy feature in Loki.
This range ensures that only non-negative amounts of currency are sent, without revealing the actual amount sent in the transaction. RingCT was first proposed by the Oxen Research Lab as a way to obfuscate transaction amounts . Current deployments of RingCT use range proofs, which leverage Pedersen commitments to prove that the amount of a transaction being sent is between 0 and 264.
Recently a number of crypto-currencies have proposed implementing bulletproofs as a replacement to traditional range proofs in RingCT because of the significant reduction in transaction size . Loki will utilise bulletproofs, reducing the information that nodes are required to store and relay, thereby improving scalability.
Although Loki implements novel changes on top of the Oxen Note protocol (see 7), much of Loki’s networking functionality and scalability is enabled by a set of incentivised nodes called Service Nodes. To operate a Service Node, an operator time-locks a significant amount of Loki and provides a minimum level of bandwidth and storage to the network. In return for their services, Loki Service Node operators receive a portion of the block reward from each block. The resulting network provides market-based resistance to Sybil attacks, addressing a range of problems with existing mixnets and privacy-centric services.
This resistance is based on supply and demand interactions which help prevent single actors from having a large enough stake in Loki to have a significant negative impact on the second-layer privacy services Loki provides. DASH first theorised that Sybil attack resistant networks can be derived from cryptoeconomics . As an attacker accumulates Loki, the circulating supply decreases, in turn applying demand-side pressure, driving the price of Loki up. As this continues, it becomes increasingly costly for additional Loki to be purchased, making the attack prohibitively expensive.