What is Mintlayer? All You Need To Know About ML

What is Mintlayer (ML)?

Mintlayer is a layer-two protocol built on the Bitcoin blockchain to bring DeFi, smart contracts, tokenization, and decentralized exchange to the Bitcoin network.

Mintlayer emerged as an innovative project with the vision of leveraging the strong points of Bitcoin and Lightning Networks and developing a platform that allowed users to deploy smart contracts. This will bring more use cases and new possibilities to the Bitcoin ecosystem.

Utilizing Bitcoin anchoring, Checkpointing, and Randomized selection, the Mintlayer project protects the integrity of the network. This article explains how crypto enthusiasts can participate in the Mintlayer ecosystem.

History of Mintlayer (ML)

In 2020, a group of individuals started the journey of making Mintlayer a reality. Through a parasocial agreement between the founding team, Mintlayer began to take shape. The first challenge, aside from the technology behind Mintlayer, was deciding the optimal corporate structure for the project. It took until 2021 for the team finally decide on the optimal structure.

By early 2021, the investors’ first series of funds facilitated the project’s development. At the time, the funds were channeled through RBB srl, a San Marino-based company Enrico Rubboli controlled. This ensured the smooth development of Mintkayer’s infrastructure.

Mintlayer’s first seed funding round was held on May 24, 2021, and secured an impressive $5.2 million. The founding team went further to forge strategic partnerships with institutions like San Marino Innovation, the state’s official technology hub dedicated to implementing cutting-edge technology.

They also collaborated with venture capital firms, specialized in blockchain investments, and prominent advisors such as Alphabit, Moonwhale, 4SV, X21, and Iconomy Partners, which helped set Mintlayer’s growth on the right path.

RBB Labs, the entity overseeing Mintlayer’s development, pledged its commitment to decentralization by promising to hand over complete control of Mintlayer to the community once the developed project goes live.

Powered by their vision of sustainable decentralized finance on Bitcoin, the Mintlayer development team offered an alternative to Ethereum, Trom, RGB, Omni, and Rootstock projects. Before the mainnet launch, Mintlayer issued its ML tokens, which were available as ERC-20 and Rootstock tokens. The Mintlayer team also strived to be regulatory compliant, adhering to the relevant San Marino legislation governing the process.

The token distribution for Mintlayer started at an unlocked supply of 15.8 million ML tokens. The overall token supply at launch was 400 million ML tokens, which grew to 600 million ML after ten years.

The outlined categories for token distribution include the pre-seed sale denoted at 0.62%, seed sale at 13.65%, strategic sale for long-term and short-term vesting at 13% and 6.5%, respectively, a marketing budget of 12%, protocol development set at 10%, community incentives at 5%, and company reserves set at 26.7%. This helps provide a clear overview of the initial supply, distribution, and ongoing rewards within the Mintlayer ecosystem.

How Does Mintlayer (ML) Work? Bitcoin Anchoring, Checkpoint System and Randomized Selection

Source: Mintlayer - Technology

Mintlayer is built to capitalize on Bitcoin’s strong points: its security and reliability. To achieve that and protect the platform’s integrity, Mintlayer utilizes some innovative technology.

Bitcoin Anchoring

Every block on Mintlayer is anchored to a block on the Bitcoin blockchain, creating a solid foundation for the Mintlayer project. This process, known as Bitcoin anchoring, allows Mintlayer to utilize the security and reliability of Bitcoin’s blockchain. Mintlayer rounds last approximately a week and align with 1008 Bitcoin blocks. By synchronizing with Bitcoin, Mintlayer eliminates the need for external validators, addressing a common issue faced by proof-of-stake-based blockchains.

Checkpoint System

Mintlayer incorporates a checkpoint system designed to protect against any long-range attack as an added safeguard for the network. Even in the unlikely scenario where a single participant gains complete control of the network, the checkpoint system ensures transactions are not reversed or tampered with, maintaining the integrity of the blockchain. Any participant in the network can enforce checkpoints on Bitcoin’s blockchain, adding an extra layer of security.

Randomized Selection

To ensure every user has an equal and random chance of being selected to participate in Mintlayer’s maintenance, the project uses randomized selection to select who would create and validate blocks. The more tokens the user stakes, the higher the likelihood of being selected. This approach ensures fairness and active participation from interested users, allowing everyone to contribute to the network’s security and consensus.

Mintlayer’s technology allows users to batch multiple tokens in a single transaction, increasing scalability. The image below illustrates how the Mintlayer protocol implements batching to retain scalability.

Image Source: Mintlayer.org

How does batching work?

Step 1: Transfer creation - Users create a transfer to enable peer-to-peer batching.

Step 2: Payment compression - Each payment is compressed to one-third of its original size.

Step 3: Transaction grouping - Multi-token transfer is grouped with transfers from other users and sent across the blockchain protocol.

Step 4: Value Splitting - The transfer value is split across multiple users.

Step 5: Transfer Finalization - Users pay lower transfer fees without compromising security.

The steps outlined above can be likened to how logistic companies operate; that is, sending packages in batches rather than singly to reduce costs. To reduce transaction costs, Mintlayer uses signature aggregation, and the protocol has a limited block size of 1MB. This reduces network congestion and payment size by around 70%.

Features of The Mintlayer Ecosystem: Wallet, Tokenization and Decentralized Exchange

Users need to understand the features below to participate in Mintlayer’s ecosystem fully.

Wallet

Mintlayer offers Mojito, a user-friendly wallet created as the gateway into Minstlayer’s ecosystem. It is designed to cater to the needs of all crypto enthusiasts, from complete beginners to institutional investors.

Mojito is a non-custodial solution that allows users to store and transfer their crypto assets, including wrapped tokens. It allows users to redeem Bitcoin on Bitcoin’s mainnet. It also allows users to run Mintlayer nodes on any device, ensuring they can fully participate in the network and control their funds.

Users can securely store and access their crypto assets through a hardware wallet or by using private keys.

Tokenization

Mintlayer’s interoperability allows users to migrate between different blockchains effortlessly, giving them access to join the interconnected Mintlayer ecosystem.

The protocol supports various tokenization use cases, allowing developers to migrate existing projects regardless of their industry seamlessly. It allows them to build dApps and issue custom tokens without in-depth technical knowledge. The applications would assist in expanding investment opportunities, providing such features as security tokens, asset tokenization, derivatives, and more. This allows for needed flexibility, giving the user the power of choice.

Decentralized Exchange: Trade Freely and Securely

Mintlayer operates a built-in DEX that allows users to trade freely and securely within the protocol. As a native feature, the DEX supports atomic swaps, ensuring users can share orders and initiate trades without relying on third parties.

Users can trade a wide range of cryptocurrencies, including Bitcoin, directly from their wallet on the Mintlayer network, facilitating seamless, secure, and censorship-resistant exchange. Additionally, users can verify their identity from the wallet application and get access to security token trades.

What is the ML Token?

The ML token, native to the Mintlayer ecosystem, is critical in fueling transactions within Mintlayer’s decentralized infrastructure. It also fuels innovation within the ecosystem, being a key factor in enabling Mintlayer’s Dynamic Slot Allotment Mechanism.

This mechanism randomly selects block signers to validate and sign blocks while also taking turns in creating new blocks. The ML token offers opportunities for staking, and governance, allowing users to partake in the Dynamic Slot allocation.

Furthermore, ML tokens can be spent to create smart contracts. Mintlayer uses Wasm, which allows developers to build products in the language of their choice. Unlike EVM, which lacks support for integers smaller than 256-bit, Wasm enables streamlined 256-bit operations rather than having the CPU handle multiple 64 or 32-bit operations. Mintlayer gives developers access to a simple API, supportive documentation, RFC, and a tool for importing ERC20 tokens from the Ethereum blockchain. This feature allows them to automate transactions and issue tokenized assets.

Mintlayer is compatible with the Bitcoin lightning network, BIP32, BIP38, BIP174, and projects with the UTXO structure. With time, as the Mintlayer ecosystem continues to develop and evolve, the use cases for the ML token will grow even more diverse, enhancing its current functionalities.

Use Cases of the ML Token

The ML token has the following use cases.

Staking

Mintlayer encourages users to stake their tokens and participate in a thrilling weekly block-signer auction. Successfully doing so would allow users to become blocksigners, allowing them to play a crucial role in the ecosystem by verifying transactions and creating new blocks. As blocksigners, users can earn transaction fees and rewards from the blocks they create.

It’s an exciting way for participants to actively contribute to the network while earning rewards for their efforts. Mintlayer accepts fees for any token transferred within the network, including the ML token.

Unlocking Ecosystem Tools

The ML token is the key to unlocking a host of exclusive services and products within the Mintlayer ecosystem. Users can also use ML tokens to cover network transaction fees, ensuring seamless and convenient transactions.

For developers who wish to issue new tokens on Mintlayer, the ML token can be used to pay the token issuance fee. Additionally, ML tokens can be utilized to access a range of services offered by RBB LAB, such as smart contract development, security audits, and software engineering. With ML tokens, users have the power to leverage the full potential of the Mintlayer ecosystem.

Community Engagement

At Mintlayer, the opinions of users matter. As token holders, users can actively participate in the project’s decision-making process. It allows them to express their opinions and contribute to shaping the future development of the protocol. Mintlayer’s design values community engagement, believing in the collaborative approach to achieving shared goals.

Is The ML Token a Good Investment?

Mintlayer’s ML token offers an interesting investment opportunity thanks to its unique features and ecosystem. The ML token has a wide range of uses in the Mintlayer ecosystem that could drive its demand. Since utility is one of the features for measuring valuation, the ML token could perform well in the long term if its utility is maximized to the full.

Aside from its utility, the ML token also gives its holders governance power, allowing them to participate in the project’s decision-making process. Typically, crypto projects perform well when they build a strong community of holders and the community’s interests are a priority.

How Can You Own ML?

To own ML tokens and participate in the Mintlayer ecosystem, users can follow a simple process:

Setup a Wallet or Crypto Account

One way to own ML tokens is to purchase them through a crypto exchange. The first step is to create a Gate.io account, complete the KYC process, and add funds to the account. Users can also create a Mintlayer wallet directly on the site.

Stake ML Tokens

Once a user has acquired ML tokens, they can choose to stake the tokens. Staking ML tokens offer exclusive benefits and rewards within the Mintlayer ecosystem.

Explore the Ecosystem

With the acquisition of ML tokens, users can explore the wide range of functionalities offered by the Mintlayer ecosystem and carry out cross-chain transactions.

Take action on Mintlayer

Users can sign up and purchase or trade ML tokens here.