Proof of Burn ( PoB ) protocol in the Cardano ecosystem application

The Iagon team recently completed a challenge to develop a proof of burn ( PoB ) protocol for the Cardano ecosystem. This article will introduce the main content of this solution:

1. Overview of the Proof of Burn Mechanism

Burning proof essentially involves sending tokens to an inaccessible "black hole" address, thereby achieving the permanent destruction of tokens. This mechanism can be used to increase the value of the remaining tokens or as a proof of commitment for a blockchain protocol.

The security of the burning mechanism is based on cryptographic hash functions. By flipping the least significant bit of the hash function output, a black hole address can be created. Funds sent to that address will be unrecoverable.

2. PoB 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 performing operations
• eUTxOs: holding funds and data

Cardano smart contracts support four types of operations:

• Burn: Send funds to the black hole address
• Destroyed: Verify if the burn has occurred
• Lock: Send funds to the key address
• Redemption: Retrieve locked funds

By using the same redeemer format, intermediaries cannot distinguish between burn and lock transactions, thereby avoiding censorship.

3. Smart Contract Deployment Process

The deployment steps include: installing the Haskell toolchain, building Plutus scripts, starting the Cardano node and wallet, restoring the wallet, executing burning and verification, etc.

4. Wallet Script Implementation

To further enhance security, wallet scripts can be used without relying on smart contracts. This approach can be achieved by generating a special burn address, using the hash of the commitment value instead of the public key hash.

Overall, the PoB protocol provides a censorship-resistant token burning mechanism for the Cardano ecosystem, which helps to promote ecological development. In the future, with the improvement of infrastructure, more complex smart contract solutions may emerge.