A blockchain for financial markets built on Bitcoin

Mintlayer was founded in early 2019 to build a decentralized financial ecosystem that is built on Bitcoin and forms a truly decentralized, trustless and transparent future of finance.

As such, Mintlayer is a sidechain, providing the infrastructure and critical tools for projects to build the future of Bitcoin on Mintlayer.

Over the past two decades, people have tried to rebuild finance using fintech and many interesting financial applications have come to the markets, but they all remained tied to the traditional fiat system.

Meanwhile, Bitcoin’s original monetary system is its most important achievement and is a novelty in the fintech industry.

Not only is it the world’s largest and most popular cryptocurrency, but Bitcoin is also known for its decentralized and secure protocol. Bitcoin is unique as it is independent of today’s existing financial and monetary system.

What is Mintlayer?

Aiming to create a sustainable architecture for decentralized finance, Mintlayer inherits its security model from Bitcoin.

It is a Layer 2 solution that allows users to build a decentralized financial ecosystem rooted in the Bitcoin blockchain, open Bitcoin to DeFi, smart contracts, atomic swaps, NFTs, apps and more. Mintlayer is also compatible with the Bitcoin Lightning Network.

Nevertheless, one piece is still missing if Bitcoin is to compete against other more modern blockchains such as Ethereum.

Bitcoin cannot execute smart contracts, which allow automated transactions, including the creation of decentralized applications (dApps) and decentralized financial products (DeFi).

Despite its shortcomings, real innovation in money and finance has only started with Bitcoin as many in the crypto community are looking for a solution to bring smart contract capabilities to the blockchain. One of them is Mintlayer.

The Bitcoin community has made changes to modernize and improve upon the original foundation.

Bitcoin enabled Segwit to increase network capacity and the Lightning Network as a second-layer solution built on top of the Bitcoin blockchain that aims to improve the scalability and speed of Bitcoin transactions.

Now Mintlayer Takes Bitcoin Innovation to the Next Level…

Mintlayer Token (MLT)

Mintlayer Token (MLT) is the native token for the Mintlayer ecosystem that will be used for various activities on the platform, including transaction fees, governance and staking.

Therefore, by holding MLT, you will be able to stake your tokens and become a network validator. You will then be rewarded with transaction fees from the blocks you validate.

You will also be able to participate in the decision-making process involving the Mintlayer ecosystem.

MLT holders can stake a minimum amount to participate in the consensus mechanism. By doing so, you can accept network fees in a token of your choice. MLT tokens can also be staked in a pool for token holders. Not only that, but the token is also used to mint new tokens on the platform.

400,000,000 MLT will be generated during the TGE, but most tokens have a vesting period before they are unlocked. MLT will initially be launched as an ERC-20 token and will be migrated to the Mintlayer Mainnet upon completion.

Token distribution:

• At launch: 400,000,000 MLT
• Stake rewards: 200,000,000 MLT
• Max Supply: 600,000,000

Technical architecture deep dive

Mintlayer has chosen to lean on various technical architectures, including UTXO, ACL, Lightning Network, P2P batching and Atomic swaps.

• Improved decentralization with inclusive P2P networks and DEX: is designed so that anyone can run a node with low hardware requirements. Each node communicates with peers to perform atomic swap transactions enabling a fully decentralized exchange (DEX).
• Unspent Transaction Output (UTXO) based model: provides increased privacy. This allows multiple receiving addresses for each wallet and supports batching and pairing procedures.
• Reduce user friction: High throughput (TPS), low fees and fast transactions reduce friction.
• Increased token interoperability: allows aggregated payments and supports multi-token transfers within a single transaction. Token porting from other networks. Two-way pegging allows for wrapped tokens from other blockchains. Cross-chain Atomic swaps with BTC.
• Provides security: Any network participant can enforce checkpoints on the Bitcoin blockchain. In addition, Non-Turing Complete smart contracts increase the predictability of the outcome and reduce the risk of contract failure.

Coin layer ecosystem

The Mintlayer Ecosystem is a range of opportunities for projects with the sole purpose of unlocking the full potential of Bitcoin. Therefore, projects at all stages can apply for support.

Here is the infrastructure and critical tools for projects to build on Mintlayer.

• Ecosystem Fund: selects and funds the best DeFi projects with real-world use cases. This tool also connects project founders to the Mintlayer network of angels and VCs,
• Incubator program: nurtures early-stage projects to bring them to launch, as well as assists with business strategy, software development, tokenomics, financing, legal hurdles and more.
• Accelerator program: For established projects looking to port (or migrate) to the Mintlayer protocol, the program provides funding and consulting for projects to accelerate to maturity.
• Subsidy: offers grant opportunities for open source developers to build on Mintlayer.

What makes Mintlayer different?

Currently, when the DeFi ecosystem runs on the Ethereum (ETH) blockchain, nodes can only be managed by specialized servers instead of average users. This leaves most users outside the blockchain’s governing decisions.

These conditions lead to security threats for everyday users who mostly rely on lightweight nodes or managers, as well as leading to more centralized project choices.

Ethereum will be an unsuitable long-term solution for truly decentralized finance due to the lack of future-proof sustainability and long-term plans for scalability, combined with a complex technical architecture.

A faster platform

A congested network cannot guarantee proper functionality of DEXs and giant nodes have increasingly slow sync times. Not only that, but the built-in Turing completeness also makes users and investors face risks while interacting with smart contracts.

This situation is completely detrimental to the goal of DeFi-for-All, and this complexity cannot be changed without fundamental fixes. A DeFi ecosystem built directly with Bitcoin in mind can eliminate much of this complexity.

Mintlayer allows you to achieve more with your Bitcoin by allowing native Bitcoin integration, enabling direct exchange for other tokens or assets, and using your BTC directly for other DeFi activities.

Mintlayer is the only DeFi/Bitcoin platform that is directly interoperable with native BTC, while all other similar platforms use intermediaries such as wrapped BTC or federated tokens. Mintlayer’s assets on the ecosystem can be exchanged 1:1 with native Bitcoin.

In addition, Mintlayer will develop a decentralized exchange (DEX) that allows BTC holders to trade for tokenized assets directly and without intermediaries using the DEX.

UTXO batching

A UTXO model allows peer-to-peer transaction batching.

You can group multiple token transfers into a single transaction. Signature Aggregation reduces the size of each payment by up to 70% to avoid network congestion. The network is built to run and fully support the Lightning Network and provide users with near-instant low-cost transactions.

Not only that, Mintlayer’s UTXO structure combined with transaction batching will help make more anonymous payments. It will support complete anonymity with “Confidential Transaction” mode.

Conclusion

To date, Mintlayer is a unique project that allows participants to achieve more with their BTC without relying on centralized exchanges.

By leveraging the security of the world’s largest cryptocurrency and integrating the Lightning Network, Mintlayer can provide a platform for developers to build applications with real financial use cases.

Many skilled developers in the DeFi area, and many working to make their mark on the industry. This is a sign that the diverse DeFi ecosystem on Bitcoin is just beginning!