Whitepaper
Whitepaper
Burnt Research
Draft-Release, December 7, 2023
Abstract
We propose XION, the Generalized Abstraction layer that enshrines user experience (UX) at the protocol
level. This enables secure, intuitive, and seamless user experiences through protocol-level implementations
related to abstracted accounts, signatures, fees, interoperability, and more. Combining the modular design
of XION’s meta accounts, their signature agnostic implementation, and XION’s parameterized fee layer
offers a composable, future-proof infrastructure layer. XION simplifies the developer experience and
enables a user-centric environment that retains the decentralized ethos of blockchain technology, while
significantly lowering the entry threshold for mainstream users. Through abstracted interoperability, we
additionally propose a solution to extend the seamless user experience of XION to all connected chains,
and explore several novel use-cases it enables.
1
2 Background by a predefined set of rules at the state machine level,
account abstraction delegates this task to SCAs.
SCAs can then implement customized authentica-
2.1 Externally Owned Accounts
tion logic as needed, such as accommodating key
In general, blockchains have two types of accounts: rotation, performing autonomous tasks, integrating
1) externally owned accounts, and 2) smart con- multiple-factor authentication, and much more.
tract accounts5 . Traditionally users interact with
blockchains through externally owned accounts
(EOAs) which involve the use of asymmetric cryp- 2.3 Signatures
tography. These accounts have a public/private Cryptographic signatures are created using a digital
key pair, whereby the public key is stored on the signature algorithm, which involves a set of mathe-
blockchain, and the private key is stored off-chain by matical operations. The most commonly used sig-
the user. The private key, known only to the user, nature schemes in Web3 are Elliptic Curve Digital
is used to sign transactions, while the public key is Signature Algorithm (ECDSA)6 and Edwards-curve
used to verify the signature’s authenticity. Digital Signature Algorithm (EdDSA)7 . Ethereum
and Bitcoin use ECDSA, specifically leveraging the
EOAs, however, have many drawbacks: they Secp256k1 curve58 , while Solana uses EdDSA, specif-
lack the ability to implement additional authen- ically leveraging the Ed25519 curve9 . Another widely
tication mechanisms, they aren’t able to perform accepted cryptographic curve, Secp256r, is used by
autonomous operations or smart contract executions, most popular consumer devices such as Apple’s Se-
and a private/public keypair can not be changed. cure Enclave10 and Android devices11 .
As a result, EOAs are a central point of failure for
users. If a user loses access to their private key, they
lose access to their account entirely. Similarly, if a 2.4 Transactions
user’s private key is compromised, their account is
irreversibly compromised. Within the standard Cosmos SDK12 , each transac-
tion is composed of messages. Once a transaction
is set to be included in a block, it goes through a
2.2 Smart Contract Accounts unique component called the AnteHandler. The An-
The second type of account, smart contract accounts teHandler is responsible for executing specific checks
(SCAs), are governed by code on the blockchain. and operations through a series of functions, known
Their creation involves being deployed to the as decorators, which are executed prior to each trans-
blockchain through a transaction initiated by an action. These ensure the validity of the transaction,
EOA. Once deployed, these smart contracts reside at signatures, fees, nonce verification, and more prior to
a specific address on the blockchain and their code the transaction execution. Once the messages have
dictates the rules and conditions under which they been executed, a PostHandler is invoked with its own
operate. These rules are executed autonomously set of decorators. These decorators are designed to
when certain conditions are met or when they are execute logic such as events, logs, post-transaction
triggered by transactions or other smart contracts. logic, and more after a transaction has been processed
Traditionally, they are unable to initiate transactions and prior to committing it to the block.
due to an absence of private keys.
2.5 Transaction Fees
As a solution to EOA drawbacks mentioned
above, account abstraction has been proposed as a Transactions fees, often referred to as ”gas”, are used
way to enable SCAs to initiate transactions1 . Rather to measure the amount of computational work re-
than having transaction authentication determined quired to execute a transaction. Traditionally, each
2
transaction consumes a certain amount of gas de- login systems. Users interact with their accounts in
pending on its complexity and the computational re- familiar ways such as through email or biometric
sources it requires. Validators, who are responsible authentication methods, eliminating the need for
for confirming transactions and adding them to the direct private key management, while still remaining
blockchain, set a minimum gas price. Users who want fully non-custodial.
their transactions processed must pay at least this
minimum gas price. The total fee a user pays for a XION’s modular meta accounts framework in-
transaction is calculated by multiplying the amount troduces a highly adaptable and secure permission
of gas used by the gas price. Users include the gas fee management system, with the ability to support
in their transactions and it is paid in the native token advanced features such as key weights, key rotation,
of the blockchain they are using. When a transaction rule sets, and a variety of authentication meth-
is included in a block, the gas fee is deducted from ods. This system offers significant versatility and
the user’s account and awarded to the validator who enhanced security for account management:
included the transaction in the block. As covered in
Section 3.4, XION’s parameterized fee layer imple- • Key Rotation: A parameter integral to main-
ments significant changes in order to abstract away taining security by proactively reducing the risks
complexities for end-users, provide frictionless gasless associated with potential key compromise by en-
experiences, and enable token agnostic payments & abling the changing of account keys, thus limit-
denominations. ing the duration of their exposure.
3
Figure 1: SCA Signature Verification Decorator
3.1.1 Smart Contract Account over existing SCA solutions. Up to 256 different au-
Implementation thenticators can be added to a user’s meta account.
When a user creates an account or logs in within the
In order to enable smart contract accounts to sign,
decentralized application, rather than being hard
the responsibility of transaction authentication must
coded into the protocol, signature verification is
shift from the state machine to the smart contract ac-
implemented through a dynamic request transmitted
counts (SCAs). This is achieved by integrating two
to a user’s account. This enables transaction veri-
critical methods into SCAs: before tx and after tx.
fication with arbitrary logic and state, establishing
Prior to a transaction’s execution, the state machine
XION as a future-proof, curve-agnostic protocol. By
calls the before tx method, which provides the SCA
utilizing arbitrary logic for transaction verification,
with detailed transaction information and its sign-
XION is not limited to any specific verification
ing credentials, allowing for signature verification and
schema. As a result, XION seamlessly supports var-
other programmed actions. Following the transac-
ious cryptographic curves without requiring specific
tion’s execution, provided the before tx method and
adaptation or modification. This stems from XION’s
all transaction messages have been successfully exe-
unique approach to abstraction, which separates
cuted, the after tx method is activated, enabling the
the underlying cryptographic mechanisms from the
SCA to perform additional programmed actions.
user-facing interfaces, thereby enabling the system’s
seamless adoption of different cryptographic curves.
3.1.2 State Machine Implementation
The state machine updates involve two decorator XION’s Generalized Abstraction layer supports
changes in order to trigger the SCA’s before tx and af- a wide spectrum of curves, including well-established
ter tx. The SigVerificationDecorator is updated with ones like Ethereum’s Secp256K1 and Solana’s
a new decorator which triggers the before tx method Ed25519, alongside such widely adopted standards
when SCAs sign, or simply proceeds with the default as Secp256R1 and RS256 used by JSON Web Tokens
SigVerificationDecorator logic. This is demonstrated (JWTs). In addition, it is able to support any
in Figure 1. An additional decorator is then added new future cryptographic curves as well, ensuring
to the PostHandler to trigger the after tx method. it can adapt to emerging trends and developments.
Developers building on XION can trust that their
smart contract accounts will remain compatible
3.2 Signature Abstraction and adaptable as cryptography continues to evolve
XION’s curve-agnostic implementation extends its quickly.
SCA capabilities, offering significant advantages
4
3.3 Device Abstraction the fee collector, swapping these non-native tokens
for the native XION token, and distributing the
Combining the implementations above, XION abol- resulting native tokens back to the fee collector. As
ishes the need for a user to store and manage private covered in the subsequent Section 3.5, the resulting
keys. This approach eliminates the safety risk, native tokens in the fee collector are then utilized to
complexity, and friction traditionally present when determine the chain’s inflation.
users attempt to use their accounts across multiple
devices. Consequently, XION’s unique approach There are a variety of ways for the collected
renders it device-agnostic as users can interact with fees to be swapped for the native XION token,
their accounts seamlessly across various devices, opening up interesting fee market possibilities. One
including computers, smartphones, or tablets. This implementation is such that the exchange rate is
universally accessible architecture significantly determined by using a time-weighted average price
streamlines the user experience, fostering widespread (TWAP) by periodically retrieving data from the
adoption by reducing entry barriers and enhancing desired decentralized exchange (DEX). In Figure 2, it
ease-of-use of all applications accessible from XION. is demonstrated using the Asynchronous Interchain
Query Module (Async-ICQ)14 .
When interacting with apps through XION, a
user is presented with multiple login methods
including email, social accounts, FaceId, or for
advanced users the option to log in with Web3 cre-
dentials such as Keplr or MetaMask wallets. XION
is therefore able to cater to all audiences, while
retaining seamless user experiences for non-crypto
native users. In addition, its meta accounts enable
additional security, flexibility, and ease-of-use such
as multiple-factor authentication, session keys, key
rotation, and more. In short, XION’s protocol level
account abstraction combined with its signature
Figure 2: Fee Abstraction
agnostic implementation enables users to seamlessly
access their accounts across multiple devices in a
safe and frictionless manner.
3.4.2 PlatformSend & FeeGrant
3.4 Parameterized Fee Layer Transactions on the network can be grouped into
two major categories, 1) value is exchanged, 2)
To enable many of the functionalities necessary to no value is exchanged. PlatformSend is enacted
create a seamless user experience, XION takes a new when transactions from the first category occur
approach to the handling of fees on the network which on the network. Since value is exchanged between
includes 1) implementing global fee abstraction, 2) participants, a portion of that value is taken as a fee
instituting PlatformSend, a new type of fee, and 3) to support the network and prevent sybil attacks.
combining them with the use of FeeGrant. Synonymous to the way gas fees mitigate network
attacks, the PlatformSend fee is a cost barrier that
3.4.1 Fee Abstraction requires an attacker to pay proportionally to the
value exchanged. This elegant design, demonstrated
XION allows the use of any token for transaction fees in Figure 3 allows users to transact directly in any
through its global fee abstraction. This is achieved currency of choice, without requiring gas tokens.
by accumulating the transaction fees paid by users in Then, utilizing the global fee abstraction outlined in
5
Section 3.4.1, the fees collected are swapped with the blockchain able to use USDC, a fully-reserved digital
native token in order to determine network inflation dollar, as its primary transaction currency15 . Fig-
and compensate network participants. ure 5 shows the dynamics of USDC fees in the fee
collector being auto-swapped to the native token, en-
abling all products built on XION to be denominated
and paid for by users simply using USDC. This elim-
inates the traditional friction of acquiring gas tokens
and allows users to seamlessly onboard with famil-
iar pricing, while simultaneously reducing unwanted
volatility and speculation. In addition, through its
parameterized fee layer, XION is natively interoper-
able with every connected ecosystem, as users have
the ability to pay in any token of choice. Combined
Figure 3: PlatformSend with the end-users’ gasless experiences, XION’s Gen-
eralized Abstraction stands out in its ability to reduce
friction and drive mainstream adoption of Web3.
When transactions occur from the second cate-
gory, regular gas fees are charged in order to prevent
network spam, and for these types of transactions
XION implements the FeeGrant. As demonstrated
in Figure 4, this allows developers to seamlessly
sponsor transactions on behalf of users and provide
a gasless experience. In addition, sponsoring can
be done in a variety of ways such as utilizing
staking rewards, employing a minimum transaction
threshold, or other configurable parameters. Figure 5: USDC Fee Swap
3.4.3 Result: Pricing & Payment • Accumulated fees are used to offset inflation,
Abstraction when possible.
Through Generalized Abstraction’s parameterized • Token inflation is calculated against staked to-
fee layer mentioned above, XION is the first kens only.
6
3.5.1 Mint Module Overview is represented as
The mint module’s goal is to maintain the pre- Tnet = Tminted + Fcollected
determined ratio of staked vs liquid tokens in an
ecosystem. This is achieved by setting three values: where Tminted is Ttotal × IR, and Ttotal is the current
the upper bound for inflation, the lower bound for total supply of tokens.
inflation, and the target staking ratio. Once the
inflation rate is determined, the module will then The first change XION has implemented is to
calculate how many tokens need to be generated in use the fees that have been collected in a block,
a block in order to meet the inflation percentage. It and offset how many tokens need to be minted
is an important balance to strike between market in the block by these accumulated fees. This is
liquidity and staked supply, as it impacts the long- demonstrated as
term security and growth of the network, and the
Tnet = Tminted − Fcollected
formulas below demonstrate this balance.
If Fcollected is significant enough, it can reduce Tnet ,
If Pbonded < Pgoal : IR = min(IR + ∆IR, IRmax ) thus effectively decreasing the inflationary impact
In this scenario, ∆IR is the rate at which the by using the fees collected to offset the newly minted
inflation increases when Pbonded is below Pgoal . tokens.
If Pbonded = Pgoal : IR = constant As chain usage increases, this will result in in-
In this scenario, when the bonded percentage is at flation decreasing as the accumulation of fees
the goal, the inflation rate doesn’t change. continue to offset the minting of new tokens. When
fee accrual exceeds the number of tokens per block
If Pbonded > Pgoal : IR = max(IR − ∆IR, IRmin ) necessary to distribute to stakers, then the extra
In this scenario, ∆IR is the rate at which the tokens are burnt and the token supply is thereby
inflation decreases when Pbonded exceeds Pgoal . reduced, naturally becoming deflationary.
Above, IR is the current inflation rate. Pbonded is 3.5.3 Token Inflation on Staked Tokens
the current percentage of staked tokens. Pgoal is
the target percentage for staked tokens. IRmax is Regarding token inflation, the default mint module
the maximum allowable inflation rate. IRmin is the calculates inflation against all existing tokens. This
minimum allowable inflation rate. can be represented as:
AP Y = IR ÷ Pbonded
3.5.2 Offsetting Inflation With Fees
where AP Y ≥ IR as a function of Pbonded . This often
The default mint module currently takes fees accu- leads to a higher realized staking annual percentage
mulated in a block and passes them to validators, on yield (APY) than the inflation rate, since not all
top of the tokens that get minted every block. This tokens are staked.
7
XION’s mint module implements a significant
change. Instead of calculating against all tokens, it
calculates against staked tokens.
Tmintedx = IR × Tbonded
8
needing manual renewals. Creators and their fans
of all ages are able to frictionlessly create these ac-
counts, and access the content from all their devices.
9
it’s a straightforward, seamless experience, showcas- 6 Conclusion
ing XION’s ability to make complex cross-chain in-
teractions user-friendly. XION addresses key challenges that have impeded
mainstream adoption through its Generalized Ab-
5.2.2 Global Decentralized Marketplaces straction layer. XION simplifies the user experience,
making blockchain technology more accessible to a
Users can participate in decentralized marketplaces broader audience. It removes the complexities asso-
spanning multiple blockchains, buying and selling ciated with account creation, interaction, transaction
goods or services with various cryptocurrencies, all fees, and interoperability, replacing them with famil-
managed through a single account with unified secu- iar interactions. In addition, it further extends this
rity policies and cross-chain payment capabilities by seamless user experience to encompass cross-chain
leveraging Generalized Abstraction’s abstracted in- interactions. Generalized Abstraction not only en-
teroperability. hances the XION ecosystem’s capabilities but also
contributes to the overall growth of the blockchain
industry by combining seamless connectivity with
5.2.3 Cross-Chain Gaming
widespread adoption. Through a multifaceted Gen-
Through abstracted interoperability, gamers can en- eralized Abstraction layer, XION offers a sustain-
gage in cross-chain gaming experiences where assets able, flexible, and user-centric blockchain infrastruc-
and achievements in one blockchain game can be used ture paradigm, capable of propelling the industry to-
or traded in games on other chains, all under one wards a new era of innovation and widespread accep-
unified gaming account. This gaming account can be tance.
easily accessed from all devices, given different levels
of access controls, and safety measures can be imple-
mented to eliminate the possibility of account loss.
5.3 DAOs
A decentralized autonomous organization (DAO) can
leverage Generalized Abstraction and abstracted in-
teroperability to seamlessly operate across multiple
blockchains. This allows it to effectively tap into dif-
ferent applications, a wider user-base, more flexible
and efficient governance, all made possible through
common Web2 methods for mainstream user engage-
ment.
10
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