Missed a 50x on AVAX? You have a second chance with this project
A look at a promising 'Layer 1' blockchain project with huge potential!
What is Secret Network?
The Secret Network is a Layer 1 privacy-focused blockchain with privacy-preserving smart contract functionality.
The blockchain combines Ethereum’s smart contract functionality with Monero’s privacy-by-default functionality and Cosmos’s scalability and interoperability.
Secret Network supports encrypted inputs, outputs and encrypted states for smart contracts, bringing much-needed privacy to Web3, DeFi and NFTs.
Like Ethereum’s ERC-20 tokens, Secret Network’s $SCRT tokens are programmable for Web3 and DeFi applications but remain private by default.
When interacting with Secret Tokens, all transactions (including the recipient and the amount transferred) and rolling balances are encrypted, ensuring anonymity and confidentiality. Individuals must generate a “viewing key” to reveal these values and can choose to share this with third parties for compliance situations.
Smart contracts on the Secret Network are in the Rust programming language, just like Solana and Polkadot. The Secret Network also leverages the Inter-Blockchain Communication Protocol (IBC), allowing independent blockchains to communicate and trade assets directly.
The IBC is the product of Cosmos’s vision of creating an “internet of blockchains,” or a network of independent chains that communicate in a decentralised way.
This means that $SCRT token holders can trade directly with other assets on the Cosmos ecosystem, thanks to IBC, via decentralised exchanges like the Osmosis DEX. Other assets on the Cosmos ecosystem include ATOM, JUNO, LUNA, UST, and many more. This only works as long as there is liquidity for the exchange pair.
Similarly, the Keplr wallet is a non-custodial wallet that leverages IBC for interchain support of over 25 blockchains, including the Secret Network.
Token Details
Circulating Supply: 167,007,649
Total Supply: 170,000,000
Maximum Supply: TBD
Token Distribution
Community: 44.12 % or 75,000,000 tokens
Team: 21.18% or 36,000,000 tokens
Treasury: 17.65% or 30,000,000 tokens
Ecosystem Pool: 11.76% or 20,000,000 tokens
Foundation: 0.59% or 1,000,000 tokens
Inflation (Including Staking Rewards): 4.71% or 8,000,000 tokens
Please be aware that token inflation can be as high as 15% and correlates with staking rewards, which vary but are up to 20%.
Tokenomics
The $SCRT token is the utility token for the Secret Network.
Network users can pay gas fees in $SCRT tokens, mint SecretNFTs with private metadata built on Secret Network, and participate in DeFi while retaining privacy.
For instance, users can use $SCRT tokens to unlock programmable privacy for supported tokens on other blockchains via Secret Bridges.
Where and how can I buy Secret Network tokens?
$SCRT tokens are available on the Osmosis DEX and centralised exchanges like Binance, Kraken and Gate.io. For instance, one could buy $SCRT on any of the above centralised exchanges and transfer to a crypto wallet like the Keplr wallet.
Alternatively, one could buy $ATOM tokens from Coinbase or Binance, transfer them to a non-custodial wallet and swap them for $SCRT on the Osmosis DEX.
What will it do for investors?
Value Accrual
Holding $SCRT at this early stage of its inception is potentially an asymmetric bet. Suppose the project succeeds in its vision of bridging to other blockchains and offering privacy for DeFi applications. In that case, it will bring significant value to the ecosystem, causing its token price to significantly appreciate in value.
Mainstream NFT Adoption
Secret Network’s privacy feature brings new use cases to NFTs. For example, Kevin Smith, an American filmmaker and actor, has partnered with Secret Network’s Legendao to launch NFTs of his horror anthology, ‘KillRoy Was Here’.
“This release is made possible by Secret Network’s Legendao NFT technology, which ensures that the NFT content can only be accessed by the owner themselves,” said Guy Zyskind, CEO of SCRT Labs, which powers Legendao and Secret Network.
The concept opens up the blockchain network to numerous digital content as NFTs — Movies, TV shows, music — while preserving privacy on-chain. Hence, a content owner’s “subscription” or “ownership” of digital media can remain private.
Similarly, Quentin Tarantino chose the Secret Network to auction NFTs of Scenes from his original and handwritten Pulp Fiction Screenplay earlier in 2022.
The mainstream adoption of NFTs and the Secret Network’s privacy feature combine to form an explosive use case that can significantly increase the network’s adoption and the value of its $SCRT token.
Passive Income Staking And Airdrops
Users can also stake their $SCRT tokens on the Keplr wallet for 20% to 30% annual passive rewards. Furthermore, staking $SCRT tokens can entitle one to airdrops from projects building on the ecosystem.
For instance, a fully decentralised cloud storage solution built on the Secret Network called JACKAL will airdrop its native JACKAL token to $ATOM, $SCRT and $JUNO stakers.
Note that there are minimum staking requirements to qualify for some airdrops. For instance, to have qualified for the JACKAL snapshot, which took place on the 9th of April, stakers must have staked:
$ATOM: 10 tokens
$JUNO: 10 tokens
$SCRT: 20 tokens
Fear not if you missed the JACKAL snapshot. There will be many more airdrops as the Secret Network ecosystem grows.
Token Burns
One of the main drivers of token value appreciation is the token’s utility. This is the case for Ethereum’s ETH token for gas fees and Terra’s LUNA token used to mint UST.
Similarly, DeFi participants can use $SCRT tokens to mint sSCRT tokens for privacy-enabled participation in decentralised finance. This feature creates further utility for the $SCRT token, removing them from circulation and increasing the token’s value due to demand/supply dynamics.
Who are the team/founder/investors?
Borne from cutting-edge research at MIT in 2015, SCRT Labs is the driving force in developing the Secret Network blockchain. Guy Zyskind is CEO and Founder of SCRT Labs and has outstanding academic and professional qualifications.
He earned a Bachelor of Science degree in Electrical Engineering & Computer Science from Tel Aviv University and a Master of Science degree from MIT with a 5/5 grade score. His thesis is on Efficient Secure Computation Enabled by Blockchain Technology.
Before founding SCRT Labs, Guy worked as an Instructor and a Research Assistant at the MIT Media Labs. Previous employment history includes CTO at Athena Wisdom, an MIT spin-off company, and CTO at Tamkix, which offers location-based and real-time couponing solutions.
The SCRT Labs core development team comprises highly qualified individuals whose experience, academic qualifications and achievements are publicly available on LinkedIn.
What is the market opportunity?
Though traditional finance firms are steadily entering the Web3 and DeFi sector, one of the core features of blockchain technology — on-chain transparency — presents a barrier to further adoption. Financial institutions may not want all their DeFi transactions and strategies publicly available.
Hence, a privacy-by-default blockchain like Secret Network can potentially be a solution that will onboard significantly more financial institutions and mainstream media companies (via SecretNFTs) into the blockchain space.
Similarly, with governments’ looming and potentially disastrous regulations that could infringe on blockchain user privacy, privacy-by-default blockchains could see further retail adoption.
For instance, however impractical, the EU Parliament’s desire to impose KYC on unhosted wallets could mean that individuals may have their home address, National IDs, and other forms of identification linked to publicly available crypto wallet balances in the instance of a database breach.
Hence, Secret Networks’ privacy-preserving features could bring protection to both retail and institutions should the above occur.
Potential Catalysts
Ecosystem Projects
As the ecosystem grows, so does the value of the $SCRT token. Some of the ecosystem projects with compelling use cases that can drive significantly more value to the Secret Network are:
Shade Protocol: This is an array of privacy-preserving DeFi apps built on the Secret Network. The protocol has its own algorithmic stablecoin, Silk, which follows the original LUNA/UST burn-to-mint mechanism, where minting LUNA burns an equivalent dollar amount of UST. Furthermore, ecosystem participants can use $SCRT tokens to mint Shade Protocol’s $SHD token or the $SILK stablecoin.
Shinobi Protocol: This project seeks to generate Secret Bitcoin (SBTC), a SNIP-20 token on the Secret Network backed by bitcoin. A Privacy Secured Trustless Bridge facilitates the peg in/out between the Bitcoin blockchain and the Secret Network. There is no middleman, and the peg in/out actions are not discernible from ordinary transactions on the Bitcoin blockchain. Once bitcoin is transferred to the Secret Network, transactions become entirely private.
This project is still in its infancy and yet to prove itself. If it succeeds, it could bring even more value from the Bitcoin Network into the Secret Network.
Ecosystem Fund
Top tier investment firms like Sam Bankman-Fried’s Alameda Research are backers of the Secret Network’s potential. Other notable backers include, but are not limited to, DeFiance Capital, CoinFund and HashKey.
In Q1 2022, SCRT Labs unveiled a significant $400 million ecosystem fund from its backers. The fund comprises two primary initiatives.
The first is a $225M ecosystem fund seeking to expand Secret Network’s application layer (including DeFi and NFTs), network infrastructure, and tooling.
The second is a $175M accelerator pool funded in $SCRT tokens seeking to provide non-dilutive capital, grants, and ecosystem incentives to rapidly expand user adoption.
An ecosystem fund of such significant size and full support from top industry investors signals venture capital bullishness on the project’s potential.
Mainstream Media NFTs
The Secret Network supports public and private metadata for NFT creators. With Secret NFTs, validation of ownership happens without opening verifiability to everyone. In other words, verifiable ownership of goods and experiences does not have to be public.
Theoretically, such a feature means that content creators can release media in the form of NFTs, and the content consumers do not have their consumption data on-chain. Imagine YouTube or Netflix on-chain but without everyone knowing what you are consuming. This use case is very compelling.
Other celebrities and media companies will follow Kevin Smith and Quentin Tarantino to choose the Secret Network for their NFT releases. Additionally, the blockchain’s use case goes far beyond entertainment to include digital IDs and real estate ownership.
Potential risks
Always remember risk management is essential. Always ask yourself how much you are willing to lose before speculating on cryptocurrencies; never invest more than you are ready to lose. There is no guarantee that the Secret Network will become a success; however, the signs are present.
The project faces competition from other privacy-enabled blockchains like Oasis Protocol and incumbents like Monero and Zcash. However, its unique value proposition makes Oasis Protocol the only likely competitor among those listed.
Furthermore, the token price could see a significant drawdown (>90%) during bear market cycles before returning to previous all-time highs. There is no guarantee that the speculative scenarios outlined above will play out.
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