What is Mintlayer?
Mintlayer operates as a Proof of Stake blockchain functioning as a sidechain to the Bitcoin network, offering direct BTC interoperability by using Atomic Swaps. Serving as the simplest method for engaging in DeFi activities in tandem with Bitcoin, Mintlayer eliminates the need for wrapped Bitcoin or smart contract languages like Solidity to create tokens. Mintlayer uses built-in smart-contracts for enabling DeFi operations, like trading, borrowing and landing and interoperability with Bitcoin.
Utilizing a UTXO-based blockchain akin to Bitcoin, Mintlayer seamlessly integrates tokenization by embedding the token-id within any UTXOs. The combination of this simplified tokenization model, direct access to Bitcoin, and the liquidity of the Bitcoin network paves the way for the future of DeFi. One notable application is the tokenization of real-world assets, where Mintlayer's features converge to offer a comprehensive solution.
What benefits does Mintlayer bring to Bitcoin?
- Strengthened Consensus Framework: Mintlayer introduces a novel Proof of Stake consensus protocol specifically tailored to enhance existing protocols when applied to a Bitcoin sidechain. To produce a block every 120 seconds, Mintlayer utilizes verifiable random functions (VRF). A pool becomes eligible to produce a block when the random number generated by the VRF falls below a threshold, determined by a combination of the network threshold, adjusted to maintain the block production rate close to 120 seconds, and the stake of the pool, ensuring proportionality to the pool's size. Moreover, Mintlayer implements a distinctive chain selection rule to designate the canonical chain. Rather than evaluating chain length, amount of work, or stake required, Mintlayer prioritizes chain density. This means that the chain with the densest set of filled slots is chosen as the canonical chain.
- Improved Network Scalability: Mintlayer generates a new block approximately every 120 seconds on average, with each block capped at 1MB in size, although it can be smaller. This limitation results in an annual maximum growth rate of around 260GB. Additionally, Mintlayer's compatibility with the Lightning Network enables users to benefit from rapid transactions, utilizing the Mintlayer mainchain as a settlement layer or for scenarios requiring an on-chain approach. This hybrid approach allows Mintlayer to combine the advantages of fast transactions with a secure blockchain, effectively addressing real-world network limitations.
- Decentralized BTC Layer 2: Mintlayer operates on a Proof of Stake blockchain model, necessitating participants to lock tokens to engage in the system's consensus mechanism. To broaden network participation, Mintlayer employs a Proof of Stake protocol centred around pools. This protocol enables individuals lacking the 40,000 ML needed to operate a pool to delegate their tokens to an established pool. By delegating, they assist in network security and earn rewards as a result.
- Multi-token Gas Fees: Mintlayer offers flexibility by allowing users to pay transaction fees in ML or any MLS-01 token if accepted by network participants.
What are Mintlayer's main use cases?
- Tokenization of Real World Assets (RWA)
- Cross-Chain Atomic Swaps
- DeFi
