What is Mina Protocol (formerly Coda Protocol)
What is Mina Protocol Network
The first cryptocurrency ever developed using succinct blockchain technology, Mina Protocol (formerly Coda Protocol) offers payment functionality similar to Bitcoin, with a dramatically faster verification time of 200ms making it practical for lightweight clients and mobile devices to perform full verification of the system’s history. Mina’s goal is to design a decentralized payment system that offers efficient verification of system history from genesis without relying on any external advice. Specifically, they aim to provide a verification time constant in the number of transactions, called a succinct blockchain by including succinct proofs of state validity in each block. In particular, Mina uses an account-based model like Ethereum. Instead of the UTXO model like Bitcoin and others where the current state of the blockchain is a list of all account balances rather than a list of unspent coins. Each block contains a commitment to this state (in a Merkle tree) and not the entire state. So a full node doesn’t need to store the entire state but can verify account balances just as efficiently, with only the information in the latest block header. However, a prover in the system (roughly equivalent to a miner in Bitcoin) does need to store the full state since it is part of the witness when proving the validity of new blocks.
Mina's Consensus Protocol
The consensus protocol of Mina is developed as the first provably-secure proof-of-stake (PoS) consensus protocol for succinct blockchains called “Ouroboros Samasika”. Note that an off-the-shelf consensus mechanism is not necessarily compatible with a succinct blockchain framework, since the way consensus is achieved when there are multiple contending chains could rely on arbitrary transaction history, forcing nodes to store the entire transaction history. In fact, this is a natural approach for consensus mechanisms, since the information needed to tell apart an honest chain from a dishonest one is likely to involve details at the point of the fork. Since it is possible for a party to learn about a fork long after it occurred, it may need to store the entire history to assist in the chain selection process. This is indeed the case in known PoS consensus mechanisms that rely on a trusted external party for bootstrapping. In the current implementation, a state proof size is just 864 bytes, and takes around 200ms to verify it. Making any device that can support this level of computation, like current smartphones, able to verify the current state of the system with no trusted party.
Mina for Payments
With Mina, no matter how much the usage grows, the blockchain always stays the same, about the size of a few tweets. This means participants can quickly sync and verify the network. Made possible due to SNARKs, a type of cryptographic zero-knowledge proof. Each time a Mina node produces a new block, it also generates a SNARK proof verifying that the block was valid. All nodes can then store the small proof, as opposed to the entire chain. By not having to worry about block size, the Mina protocol enables a blockchain that is decentralized at scale. Given Mina’s lightweight design and the off-chain nature of Mina’s zkApp smart contract computations, it’s easy to use the Mina proof system from other chains. There is currently work being done to establish a bridge between Mina and Ethereum, and progress made on this can also go towards building trustless bridges between different chains. This will result in the ability for dApps on other chains to take advantage of the privacy-preserving data verification, efficient proofs of large computations, and secure login features of Mina’s zkApps. Mina’s zkApps can privately interact with any website and access verified real-world data for use on-chain. So developers can leverage data on the internet without ever compromising the privacy of users. Mina’s zkApps, smart contracts powered by zero-knowledge, keep users in control of their privacy by validating and sharing proofs of their data, rather than the data itself. Like getting a loan by simply sharing proof of your personal ID and credit score, rather than the data itself. Removing the risk of your personal information being hacked or sold. You are the only one owning your data, and it never leaves your device.
Mina Protocol’s Token ($MINA)
Governing the Mina ecosystem is the $MINA token. Because Mina uses a variant of Ouroboros Proof of Stake. Such a protocol requires careful separation of roles, incentive design, and sound monetary policy to function properly and resist exploitation. With constant resource requirements regardless of how many transactions the network has processed.
Mina has three roles in the network incentivized to participate by different mechanisms and earn $MINA.
- Verifiers – Network participants can choose to participate by becoming Verifiers to request information relevant to them. By checking the Merkle path, verifiers ensure that the parts of the state they care about like their account balances.
- Block Producers are incentivized by protocol distributions in the form of block rewards or transactions, as well as network fees paid by users. Importantly, block producers are not incentivized by the threat of slashing in order to participate.
- Snarkers are network participants who produce zk-SNARKs that verify transactions. They are compensated by posting fees for doing so, called bids, and if their SNARKs are used in a block, the block producer pays out those fees from the total transaction fees. Given the scale, it’s possible that some SNARK operations could become more dominant over time, as some mining operations have with Bitcoin. However, any resulting concentration of SNARK production would not have any bearing on the censorship resistance of the protocol.
The Total Supply of Mina is 1 Billion tokens, with each $MINA being divisible into 1 billion units (nano mina). Of this supply, 7.5% has been distributed to Mina Labs, 6% to Mina Foundation, 20.5% to Early Backers (Private/Strategic/Seed Rounds), 23.6% to Genesis Contributors, 7,5% to Public Sale, and 34.8% for Verifiers, BPs, and Snarkers. Mina Protocol raised a total of $48 Million in a total of 4 separate token sales ending in April 2021. Prices during these sales varied from $0.07 in the Seed round up to $0.25 in the Public Sale.
Mina Protocol Founders
O(1) Labs is a global and remote company that incubated the Mina Protocol. The team operates on the cutting edge of Web3 and zero-knowledge proofs technology. O(1) Labs is a group of people from all around the world who use cryptography and cryptocurrency to build computing systems that put people back in control of their digital lives. As owners of each product, each team member has tokens that give them ownership.
Market Impacts of Mina Protocol
The Mina Protocol conducted its $MINA token generation event in June of 2021. A very profitable endeavor for all participants in prior sales, MINA listed at around $4 before a sell-off drove the price to $1 by July. After which MINA began gaining traction before topping out at an all-time high of $6.15. A slight pullback saw the token riding this channel between $4 before breaking below it in December 2021. Aside from a small breakout last month, $MINA has returned to below $2 levels for only the third time since its release. Of the Total Supply currently 480 Million MINA tokens are in circulation. Giving the protocol a Total Market Cap of $871 Million and a decent Daily Trading Volume of almost $40 Million spread across over 40 trading pairs. Mina has gained a following of almost 200k on Twitter, 50k on Telegram, and 30k on Discord. With over 70 contributors to the Mina Protocol, it’s no surprise that the Codebase reflects constant updates and new developments for the protocol since its release.
Concerns
There are concerns over such a large amount of $MINA being pre-mined before the protocol was active. With the creators at O(1) Labs clearly stating they have ownership over the protocol it’s a hard sell to convince others that $MINA is a decentralized means of payment.
Conclusions
Mina Protocol has a lot to show compared to many other projects with this level of liquidity. But, claiming to be the lightest blockchain hasn’t been enough to push Mina to the masses. As the block rewards only lower exponentially over time, Mina will need to make a lot more noise if they expect to be heard. While user data remains private on the network, token economics defeat much of the point behind having a decentralized payment network. Similar to Ripple $XRP, the Mina Protocol wishes to serve this same micropayment utility while choosing to also keep strong control mechanisms in place for the supply. If that’s not something you’re concerned about, Mina might be perfect for you.
Until next time, remember that the only guarantee is BTC. So keep stacking that Satoshi. -Jesse Koz
