Cardano Mixer
A decentralized protocol that breaks the link between the sender and receiver of assets on Cardano.
The Cardano Mixer enables private transactions by using zero-knowledge cryptographic proofs (where you prove something without revealing the actual proof that you possess) along with a network of relayers who submit withdraw transactions to the protocol for users.
How Cardano Mixer Works
Deposit one of many set amounts of ADA into the protocol: 200, 1000, or 10,000; and wait for others to make deposits into the mixer (the longer you wait the higher your level of anonymity). Then you use a zero knowledge proof, generated upon creation of the deposit and stored on your device, to prove the ownership of your deposit. One of the many, random deposits that exist in the mixer is sent to an address you designated when creating the deposit and you now have your funds and the link between the sender and receiver is now broken as it cannot be proven as to who received which deposit when from the mixer.
A user pays the protocol fees, 0.2% of their deposit, along with two Cardano network transaction fees when they initiate their deposit. This allows funds to be withdrawn to an empty wallet. Relayers are reimbursed the transaction fee for the withdrawal once it is complete.
Actors in the Cardano Mixer System
There are four actors in the decentralized Cardano Mixer ecosystem.
Users - a.k.a depositors and withdrawers. Users use a client app to interact with the protocol. They use this app to set up deposits and send their proofs to make withdrawals. Users pay a fee for using the protocol, as well as the Cardano transaction network fees associated with their deposits and withdrawals. The client app used by the user can generate reports of all their interactions with the protocol upon request by the user. This is generated solely from data stored on the user’s device and can be served as proof of compliance to regulating authorities.
Anonymity Miners - These are users who choose to leave their funds in the protocol for an extended period of time. This has the benefit of increasing the anonymity of everyone’s transactions and those who do this receive anonymity rewards, generated from protocol fees. The mixer runs in cycles (which are determined not by time but by a quantity of deposits) and anonymity miners must collect their anonymity rewards by the end of the cycle; unclaimed rewards are sent to the project’s treasury.
Relayers - A randomly selected relayer checks the proof provided by the user and submits the corresponding transaction to the Cardano blockchain on the user’s behalf. This allows funds, both deposits and anonymity mining rewards, to be withdrawn to empty wallets. Relayers must stake MIX tokens to be eligible to run the relayer service, and must also stake a deposit amount equivalent to the size of the transactions they want to process i.e. stake a deposit amount of 1000ADA to process withdrawals up to 1000ADA in size. Relayers are allowed to submit one transaction; withdraw, collect rewards, and claim rewards; per-minute to the network.
Scanners - Anyone running a Cardano network node can run the scanner app. This independent scanner tool can be used to scrape the blockchain for invalid transactions (which are determined as invalid when a relayer submits an invalid proof to the on-chain verification algorithm). The relayer’s staked ADA is returned to them and their staked MIX tokens are lost. 75% of these are put into the project’s treasury and 25% are given as a bounty reward to the person running the scanner that caught the dishonest actor.
Protocol Fees
Users pay a protocol fee of 0.2% when they make their deposit. 50% of this is distributed as anonymity rewards to anonymity miners and the other 50% of this is distributed between relayers and stakers of the MIX token. The fee for withdrawing is paid in advance at deposit and the relayer then gets a fee reimbursement, along with their 0.1% of the fee, upon the confirmation of a processed withdrawal transaction.
When collecting anonymity mining rewards a fee is paid to the relayer. This fee is 1% of the reward amount plus the network fee (both deducted from the anonymity reward amount).
DAO
Holders of MIX tokens can vote on improvement proposals to modify the platform. They also control the parameters of the protocol, such as fee amounts, and vote on the allocation of treasury funds as they are released. Past initial release further protocol developments will be funded by the protocol’s treasury.