After a one-month break of monthly updates due to a major unforeseen event, the March Project Update has landed. This update is a major one and contains a lot of information about what has transpired in the past few weeks and what’s coming ahead with Particl in 2021 and beyond. Indeed, you DON’T want to skip on this update so let’s jump right into it.
Table of Contents
- Latest Information on the Inflationary Bug and the Proposed Solutions
- Particl V3 Update
- A Proposal for an Improved and More Sustainable Treasury Model
- Atomic Swaps are Coming to Particl Desktop
- New CCS Proposal
- Particl Ends 2020 Strongly in Global Github Commit Rankings
Latest Information on the Inflationary Bug and the Proposed Solutions
Since the initial disclosure of the inflationary vulnerability, the Particl team has been working on solutions to whitelist legitimate anon outputs but keep the exploited ones frozen in perpetuity. Today, we are happy to bring more details and clarity on the situation and explain the way forward.
To limit the impact of having RingCT and CT transactions disabled any further (such as, for example, the inability to release Particl V3 without it), the team has opted to adopt a multi-fork approach instead of a two-fork one, as initially proposed.
The next hardfork, which is expected to go live in April, will re-enable RingCT and CT transactions as well unfreeze the majority of legitimate outputs currently frozen. Once completed, it will also enable the Particl V3 release to go live on mainnet.
If you want to know all the changes integrated into the second hardfork, please consult its PR on Github by following this link: https://github.com/particl/particl-core/pull/81
At this time, the majority of the base requirements for the second hardfork to go live are ready. The team is finalizing the portion of the code required to whitelist outputs and undergoing a full RingCT and CT internal audit to ensure the code's integrity before going live with the hardfork.
Additionally, the team is working separately on additional changes related to a treasury model proposal which is detailed a bit further down this update. If the treasury proposal is approved, it’ll be integrated into the code for the next hardfork.
Legitimate Outputs Whitelisting Process
Users with legitimate anon or blind balances will be able to unfreeze and move them back to public balances. For the vast majority of users, this will be possible right after the next hardfork goes live but, in some specific cases, a process involving more manual steps will be required. If you fall into that category, your anon and blind balances will be unfrozen in a subsequent hardfork a bit later on after the next one.
Here are the two methods used to unfreeze legitimate anon and blind balances.
- A “low pass filter” will allow any output that contains a number of coins below a certain threshold to be unfrozen. As the attacker generated large outputs on which balance transfers were drawn from, this won’t unfreeze exploited outputs. The exact value of the threshold will be confirmed in a separate blog post coming shortly in the next week or two.
- Users with legitimate balances larger than the low pass filter’s threshold will need to go through a manual claim process that will require them to prove the coins' legitimacy. This can be done using various methods. Which method is used will be up to the user. Claims will need to be presented to the community through a CCS proposal (using a template provided by the team) and then be approved through on-chain voting. Once approved, the outputs will be marked as unfrozen as soon as another hardfork goes live later in the year. This process ensures that the entire process remains decentralized and that no single party (in this case, the Particl team) can single-handedly take such a critical decision. More details on this process will also be provided in a separate blog post coming in a week or two on Particl News.
As this claim process (option 2) requires manual input from users, a long-enough time-frame will be granted to allow everyone that needs to go through it enough time to do so.
Adjusted Total Supply and Implications
One of the consequences of this bug is the inflation of the total supply, which isn’t yet reflected officially by the blockchain. In fact, because of the stealthy nature of the exploit, the total supply that the blockchain displays is the one expected if there never was any inflationary bug. This will be adjusted to its actual value in two different ways.
First off, the supply will dynamically adjust itself as users move their legitimate anon and blind outputs through the low pass filter. Whenever a successful low pass transaction occurs, the blockchain will automatically detect it and adjust its supply accordingly.
Secondly, the supply will also be adjusted once the hardfork that whitelists outputs approved by the community through the CCS goes live. Any new coin being unfrozen through this process will be added to the total Particl supply.
What this means is that, by the end of the manual claim process, the supply will be fully adjusted to its true value and will display the real, post-inflation supply. The team currently estimates the final number of exploited coins to range between 1.5M and 2M, including the already-confirmed exploited coins (768,767 coins).
Please take note that this is just a rough estimate based on various information the team has gathered since the first hardfork (holders who’ve contacted the team, evidence on the blockchain, and so on). The actual number may end up being slightly higher, or slightly lower, but should ultimately trend towards those numbers.
This inflationary event also bears other implications for the network.
- An increase in staking rewards size will be observed. In fact, the size of rewards will go up by the same amount as the supply goes up. If, for example, the total supply ends up being inflated by 15%, then staking rewards will also grow in size by an equal 15%. That’s because staking rewards are calculated based on a percentage of the total supply.
- Other projects that had forked Particl’s RingCT protocol were contacted privately and disclosed the vulnerability before the public announcement. The Veil project has been contacted but found not to be vulnerable due to a different implementation. The Ghost project, on the other hand, has been found to be vulnerable but has swiftly patched the vulnerability. We’d like to thank both teams for their support and urgency in addressing the situation.
Particl V3 Update
It can be reported that a significant slow down has been observed in the finalization of Particl V3 in the past few weeks due to personal issues that led to a strain in time availability. This is in the process of being resolved and we expect the development of Particl V3 and Particl Desktop to resume at its usual pace (and, more likely, at a faster pace than it used to) in the next few days.
For this reason, we do not have any specific update on Particl V3 for the moment, but we fully expect to have a report ready to go live before the next Project Update in April. We also expect the new testnet version to go live before that time.
To understand a bit more where things are headed for Particl and how the project is about to get back full steam ahead, carefully read the next section.
A Proposal for an Improved and More Sustainable Treasury Model
As it was communicated a few months ago, the Particl Foundation has paid all outstanding payments to its contractors (which includes developers). This necessary action (due to agreed commitments with said contractors) has severely depleted the Foundation’s reserves leading it to initiate its shutdown process.
As a result, the Particl team had to pause salaries until a new funding solution appeared, which caused the project to temporarily go back to a voluntary-based contribution model. This has, unfortunately, led to a considerable reduction in time availability for most of the team members due to other temporary commitments needed to be made to make ends meet.
Additionally, the looming release of Particl V3, which is arguably the biggest Particl release ever since the project’s inception, is right around the corner with only a few changes needed to be applied for it to go live on mainnet. The problem? The team doesn’t have access to proper funding anymore to promote it at its just value and give it the exposure it deserves. This situation, combined with the voluntary-basis contribution model that is in play, motivated the team to work on a creative but effective solution to get the project funded once again and be back in action full steam ahead.
A New and Improved Treasury Model
For the reasons mentioned above, and to ensure the proper development and effective promotion of the project in the many years to come, the team has been working relentlessly on a new, more robust treasury model which would guarantee enough funding to support the project. This would ultimately provide the project with just as much financial support as the project had at its peak and eventually surpass this level.
The new treasury model being designed doesn’t aim at reinventing the wheel. At current PART prices, self-sustainability can be achieved by tweaking the current treasury model which, at this moment, reserves 10% of all the staking rewards to support the project. The Particl team is modelling the new treasury figures after that of very successful and top-rated projects in the space such as Decred, Siacoin, and others which have adopted similar self-funding strategy. Doing so has proven to be an overwhelming and indisputable success for these projects.
What to Expect?
While the numbers around the new treasury model are still being simulated and evaluated, this would allow for the immediate full funding of the Particl team at current PART prices and would provide enough funds to reserve in various budgets aimed at supporting and promoting the project as well as stimulate user growth.
As the treasury model is based on PART staking, an increase in PART prices would directly translate to a more significant source of funding for the project which could, eventually, be used to expand the team with new members (developers and non-developers), fund campaigns (i.e. marketing, user growth, etc), fund promotional efforts, and fund various budgets such as exchange listings, just as an example. This model has, in fact, exponential potential.
Of course, before any expansion process beings, the first step is to fire up the engine once again and stabilize the new Particl internal structure. A team expansion is a time-consuming process with various considerations and thus, is planned for when the time will be suitable for it.
As a result of this new source of funding, you can expect the Particl project to be back in the midst of action and be as strong, and even stronger, as it was at its peak. You can also expect a much faster pace of development, more frequent communication, more transparency, more promotional efforts, more marketing, more user growth/adoption initiatives, and so on. This is the key to ensure Particl’s success not only this year but in the many years that stand ahead of us all.
Submitted as a CCS Proposal
The team is currently implementing a better UI for the on-chain voting system in the CCS system and it should go live in a week or two. That’ll allow you to better visualize the proposals, current voting, and etc.
Because this new treasury model changes the values of the yearly staking interest rate as well as the percentage of all staking rewards being reserved for the development and promotion of the Particl project, community consensus has to be achieved at the protocol level to ensure an optimal level of decentralization.
Another important point is that all the block rewards going to the treasury fund will require an on-chain vote to be spent. Every quarter, the Particl team will submit a CCS proposal to have its budget approved by the community using on-chain voting. This ultimately gives the community the final say, furthers the level of decentralization of the project (and its governance), and keeps the team accountable to every PART holder to ensure it always acts in the best interest of the ecosystem.
Full Details Coming in a Separate Blog Post
Just like with the information surrounding the proposed solutions for the inflationary bug, the precise details, figures, and in-depth information about the treasury model proposal will be posted in a separate blog post that is likely to go out next week on Particl News. Stay tuned as the team is in the process of finalizing all the details!
Atomic Swaps are Coming to Particl Desktop
But wait, there’s more being worked on! Over the past few months, a great surprise has been cooking up and is now ready to be revealed; atomic swaps are coming right to Particl Desktop thanks to a new Particl-based distributed exchange protocol.
In fact, Particl Core Developer Tecnovert has been working on BasicSwap, an anonymous DEX protocol that uses SMSG to allow people to swap, without any third-party, cryptocurrencies using atomic swaps. BasicSwap is currently functional and is in its Closed Beta phase where various testers have been experimenting with it for a few weeks. This anonymous DEX protocol, which currently supports Particl, Monero, Bitcoin, and Litecoin, has many benefits that will go a long way in making PART and other cryptocurrencies more resilient and widely accessible to all.
It uses Particl’s SMSG P2P network and the atomic swap protocol to allow you to exchange cryptocurrencies without requiring a third-party or wrapped assets. The swaps are pretty fast; in fact, swapping PART for LTC averages 20 to 25 minutes per swap (after both transactions are fully confirmed), which is also the same for PART/XMR swaps. Of course, the actual time required for a swap to fully complete is entirely dependent on the confirmation times of the two coins being traded.
To make it as easy to use as possible, the BasicSwap protocol will eventually be integrated into the user interface of Particl Desktop. Swapping cryptocurrencies will be possible through a new Particl V3 “Swap” module and won’t require the syncing of other coin nodes.
This new atomic swap module isn’t planned to be released with the initial mainnet launch of Particl V3 but is expected to go live in one of the subsequent few Particl Desktop updates that come after it. Even though this project is currently being delayed due to the commitment required from Particl Core Developer Tecnovert to fix the inflationary bug, BasicSwap is fully expected to be accelerated by the potential funding provided by the new treasury model.
Keep an eye out for an announcement of an Open Beta as well as more information about this tool as soon as the Particl developers can get back to working on their previous tasks after the inflationary bug is dealt with. That should come shortly after the release of Particl V3 on mainnet.
New CCS Proposal
A few weeks ago, a new proposal was added to the CCS system. Authored by Particl community member ffmad, it proposes to fund the development and creation of a market API (Particl V3) documentation. This proposal seeks to help anyone set up a market node and use it just like DeMarkets.io did with the explorer for Particl V2.
The requested donations are on the low end (1,200 PART), so if you’d like to contribute, check out the proposal on the CCS here.
Note: The Particl node of the CCS will be updated next week, after which previous proposals will be updated. This will also move this proposal from the Idea stage into the Funding Required stage.
Particl Ends 2020 Strongly in Global Github Commit Rankings
The Year 2020 has been a different one than previous years for the Particl project. This is primarily because Particl kept most of its development in private repositories as the team was working on the Particl V3 massive update. This meant that only a tiny percentage of the progress was able to be publicly tracked on Github. Regardless, being a Bitcoin fork has many benefits for Particl, an obvious one being that it effectively leverages the entire development community of Bitcoin.
In fact, Particl Core Developer Tecnovert constantly keeps the Particl code up-to-date with Bitcoin’s codebase. That means regularly pulling Bitcoin updates, modifying the code to make it Particl compatible, and merging it without breaking anything else. This is obviously no small task, and this is reflected in CryptoMiso’s yearly Github commit leaderboard (2020), where Particl ranked 4th in terms of the number of commits for the whole year! Particl currently ranks 5th in the past 12 months, and that doesn’t even take into account the development made to the private repositories of Particl Desktop and the BasicSwap DEX protocol.
The Best is Yet to Come
Although Particl is going through an unfortunate situation at this moment, it’s also about to turn it into the best and most productive event since the inception of the project itself with the proposed new treasury model.
We understand that the current times can be challenging, but rest assured that the best is yet to come! The team’s getting ready to fire up the engine full steam ahead once again, scale back up, properly promote the project and its products, and come back into the midst of action with a strong bang!
It’s definitive. Things are looking very good in 2021 and the many years that come after it! Particl is here to stay, and the best is yet to come
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