Anoma: Rethinking the Blockchain Internet
It is widely recognized that bitcoin started the cryptorevolution by becoming a decentralized currency and a store of value. Ethereum, on the other hand, was the first blockchain to launch smart contracts, allowing developers to create decentralized applications (dApps). Since Ethereum, most of the advances have been aimed at solving the scalability and fragmentation problems of the blockchain, the latter being a direct result of efforts to solve scalability problems.
Thus, there are now two generations of blockchain protocols, which the Journal du Coin has aptly labeled:
- Scripted Settlement (Bitcoin)
- Programmable settlement (Ethereum et al.)
What is Anoma?
Anoma is breaking stereotypes and pioneering a new generation of blockchain protocols – humanized programmable settlement. What it means? Anoma is a Proof-of-Stake (PoS) blockchain network that is “focused on intent, privacy preservation for decentralized counterparty discovery, problem solving and multi-chain atomic settlement.”.
Let’s get into the details.
Transactions are the fundamental building block for blockchains; they allow messages and assets to flow across the network. Transactions are validated by validators and form an immutable chain of information. Anoma goes further and represents intent. An intention is a user’s desire expressed in the blockchain and describes what they want to buy or sell. Users can also customize their intentions to add restrictions. For example, a user can express a desire to buy NFT at a certain price, but not before another asset, say ETH, is sold at a certain price.
Intentions are propagated online as “gossip”, which is transmitted by the nodes. On the other hand, matching nodes seek to match and find matching intentions, triggering decision algorithms. This works similarly to the order book matching mechanism of an exchange, but at the network level. Thus, Anoma users can find counterparties through a decentralized network of gossip and matching nodes.
Anoma provides privacy through the use of zero-disclosure evidence – zk-SNARKs (short non-interactive knowledge arguments), keeping users and their transactions private. Anoma uses zk-SNARKs in its secure multi-asset pool (MASP), which allows all assets to share the same secure pool, which in turn increases the anonymity established for users.
Users will be able to send and receive assets through MASP, protecting their transactions from outsiders. Other people will not be able to determine which transaction belonged to a particular user or the type of asset used.
Anoma uses the IBC protocol to communicate between its blockchains and the broader Cosmos ecosystem. IBC uses relays to facilitate data transfer between blockchains. Although relays are usually managed by node operators, they can be managed by anyone with the capacity to do so, while receiving a commission. In the above figure, user A wants to send data from blockchain A to blockchain B. As soon as the transaction is sent, module A starts up and sends it to blockchain B through the relay. Before it is received by module B, the transaction is authenticated through the light client. Note that each blockchain can have multiple modules that can communicate with each other via IBC relays. Thus, with an IBC, users can send interchangeable and non-interchangeable assets to Anoma to use features such as its MASP.
Fractals are patterns that repeat at different scales. In nature, we see fractals in tree branches, river deltas, snowflakes, etc.д. Anoma introduces fractal scaling to solve the blockchain scalability problem. The idea is that individual parts of Anoma can be run in localized functions, both geographically and socially, to scale in response to user growth and activity. Each part of Anoma is easily customizable and can be configured based on user needs and behavior. For example, fractals can be run in large cities to conduct transactions locally, while still being able to interact over a global network. Similar to sharding, this scaling approach distributes transactions from the main blockchain to fractals that run in parallel, thereby increasing the overall throughput of the network. In this way, the network as a whole can scale without encountering the same centralization and performance issues that have plagued other large-scale projects.
Naturally, security decreases as the user moves to fractals remote from the main blockchain. However, this is not necessarily a problem because different levels of economic activity require different levels of security. Moreover, with the development of Interchain Security, Mesh Security and Interchain Alliance, fractals can potentially increase their own security without much cost.
The team and investors
Anoma is created by Heliax, a “public goods lab” dedicated to research and development of open source protocols and products. Heliax was founded by Adrian Brink and Ava Sun Yin. Both founders have extensive experience in the blockchain space and have worked together on infrastructure and research projects on Tendermint, Cosmos, Solana and Near.
Anoma raised $26 million in November 2021 in an investment round led by Polychain Capital, with participation from Fifth Era, Maven 11 Capital and Coinbase Ventures.
Namada is a Tier 1 PoS blockchain developed by Heliax and will be the first fractal of the Anoma Bank of America: network. Namada will focus specifically on private asset transfers to test MASP on Anoma. At launch, the blockchain will be compatible with Ethereum or any IBC-enabled blockchain. This means Namada will support any interchangeable or non-interchangeable token sent over a custom two-way Ethereum or IBC bridge.
Private asset transfers will be facilitated by MASP, allowing NFT, ETH, DAI, ATOM, KUJI, etc.д. or any assets owned by Namada to use the same secure parameters and be indistinguishable externally. The protocol will reward users who own protected assets because they essentially provide liquidity to facilitate matching intent submitted by users.
Namada’s Cubic PoS (CPoS) mechanism automatically distributes rewards by staking. This means users don’t have to claim and re-stack rewards. Transaction fees can be paid by multiple assets according to management approval.
While many efforts have been made regarding privacy protocols and networks, the recent U.S. Treasury Department sanction of Tornado Cash, a currency mixer, and the subsequent arrest of its developers have raised concerns and fears about the use of similar privacy-preserving protocols. Although privacy protocols have been used by attackers, privacy is also a basic human right that needs to be preserved. Privacy improves the user experience in terms of payments just as it does for traditional digital payment methods. That’s why we think privacy-preserving protocols like Anoma are important to adopt.
Nature-inspired fractal scaling is not much different from sharding, with an emphasis on localizing fractals not only based on geographic locations, but also by function or community. This allows networks to scale and execute transactions in parallel, optimizing the user experience to a level that differs little from the real world, where actions and social interactions take place in different localities. For example, this could include transactions between people in the same cities or interactions between users in the same gaming community.
One potential risk identified is the following: Anoma relies on bridges to facilitate inflows and outflows from Ethereum and other IBC-enabled networks to the Anoma network. This is not a unique feature, but rather an inherent risk faced by any compliant network or protocol that relies on bridges. As we have seen from numerous bridge hacks and a recent critical security vulnerability discovered and patched in IBC, bridges are not 100% secure. Therefore, several layers of security measures will be required to ensure that users’ funds are safe at all times.
Implementing Anoma intent as one of the base blocks of the blockchain is an interesting decision because it emphasizes user-centric design at the protocol level and opens up a wide range of possibilities for building other protocols. How it works in reality in terms of UI.
Warning: Bybit employees may be involved in some or all of the tokens and projects mentioned in the article. This statement is to prevent any conflict of interest and does not constitute a recommendation to purchase any token or participate in any of the ecosystems mentioned. This content is for informational purposes only and should not be taken as investment advice. Please research this issue well and be cautious if you plan to participate in any of these projects.