The Burning Proof of the Cardano Ecosystem ( PoB ) Protocol Implementation

The Iagon team has recently completed a challenge by developing a proof of burn (PoB) protocol for the Cardano ecosystem. This article will introduce the details of this solution, including:

1. Overview of the Proof of Burn Mechanism and Its Applications
2. The PoB smart contract implemented by Iagon on the Cardano network
3. Deployment and Testing of Smart Contracts
4. PoB protocol realized through wallet transactions

1. Proof of Burn and Its Applications

The burning of crypto tokens ( and the destruction ) are common practices, essentially sending tokens to an inaccessible "black hole" address. This mechanism can be used to increase the value of the remaining tokens or as a proof of commitment for the blockchain protocol.

The security of proof of burn is based on cryptographic hash functions, which are easy to compute in the forward direction but difficult to reverse engineer. By flipping the lowest bit of the hash function output, a black hole address can be created. Anything sent to that address will be unrecoverable.

The design concept of the Proof of Burn protocol is to first burn funds and then prove that the burn has occurred in a separate step. This requires creating a hash of the committed value first, and then showing that the black hole address has been created.

2. Proof of Burn Smart Contracts on the Cardano Network

Cardano smart contracts consist of three parts:

• Redeemer Script: Controls the spending of eUTxOs
• Wallet Script: Represents the user running, used to redeem funds and create new eUTxOs
• eUTxOs: holding funds and data point ( datum )

Cardano smart contracts have no centralized state, each eUTxO has an independent state. Possible operations include:

• Burn: Send funds to the black hole address
• Destroyed: verification of burning has occurred
• Locking: Sending funds to an address with a key
• Redemption: Retrieve locked funds

Intermediaries cannot distinguish between burn and lock transactions, which prevents scrutiny of burn transactions. The situation of fund burning can only be verified after the committed value is disclosed.

3. Deployment and Testing of Smart Contracts

The steps to deploy a smart contract on the testnet include:

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

4. From Smart Contracts to Wallet Scripts

To further prevent censorship, the burn operation can be fully executed in the user's wallet 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.

By using the Cardano API library, you can generate burn addresses, submit transactions to the blockchain, and verify burn transactions.

Conclusion

Currently, it is recommended to use wallet scripts to implement the proof of burn protocol. In the future, with the improvement of the PAB library, the combination of wallet scripts and complex smart contract solutions will be more feasible, creating a censorship-resistant environment.