Tangle Network
Use Cases

Use Cases of the Tangle Network and Webb Protocol

The Tangle Network and Webb Protocol have been designed to serve a variety of use cases. A majority of these applications revolve around enhancing privacy and improving cross-chain interoperability. Here are some key proposed applications for the Tangle Network and Webb Protocol:

Interoperable Shielded Pools

The most immediate application is the creation of private bridges for assets, or "interoperable shielded pools." The decentralized, updatable Tangle Network is ideal for maintaining the state of a set of bridge anchors, making it possible to design data to be inserted into these anchors around that of an asset system. Unspent transaction outputs (UTXOs) are inserted into anchors, and users can spend these UTXOs privately across the chains the bridge exists over.

Interoperable Membership Groups

The Tangle Network and Webb Protocol can support interoperable membership groups. These are communities that exist across chains and leverage privacy. A natural implementation might look like an interoperable Semaphore system, where anyone in the Semaphore membership group can relay a vote or response to a poll from any chain privately, and potentially without even needing a wallet on that chain.

Interoperable Badge System

An identity-based application, an interoperable badge system, could use expressive data blobs for arbitrary proofs of ownership, participation, and identity. Using Webb's technology stack, these badges can be proven to exist from anywhere, enabling new types of composable application development due to the zero-knowledge and private nature of data disclosure.

Variable Asset Anchor System

This system allows for interoperable shielded pools, wherein users can transfer arbitrary amounts of assets privately between blockchains. The Variable Asset Anchor System uses zero-knowledge proofs and is similar to a shielded UTXO system, but with cross-chain capabilities.

Semaphore Anchor System

Semaphore is a popular zero-knowledge protocol that enables members of an on-chain community to create anonymous signals using zero-knowledge proofs of membership in the community’s identity set. This concept can be extended to a cross-chain identity set, allowing any member of a set of non-fungible token (NFT) communities to register.

Identity-Based Variable Asset Anchor System

By combining the Semaphore Identity protocol and the Variable Asset protocol, a cross-chain shielded pool application over a restricted identity set can be designed. This creates a private transaction system where only users with proofs of membership in a cross-chain identity system can transact. This opens up possibilities for even more diverse use cases in the realm of zero-knowledge applications.

In addition, with the integration of threshold Elliptic Curve Digital Signature Algorithm (ECDSA), the Tangle Network can sign arbitrary Bitcoin transactions, Ethereum transactions, and more. It can also be extended to include a Bitcoin bridge into the system with a proper custody rotation, or to sign messages for other smart contracts across chains for governance purposes.

Decentralized Private Finance (DePriFi)

Decentralized Finance, or DeFi, has experienced significant growth over the past few years, facilitating peer-to-peer financial transactions without intermediaries. However, DeFi transactions on public blockchains are often not private, posing privacy concerns for users. Leveraging Tangle Network's and Webb Protocol's privacy-preserving capabilities, we can establish Decentralized Private Finance (DePriFi) applications.

These DePriFi applications will allow users to make transactions while keeping their financial activities private. They can engage in yield farming, liquidity provision, lending, borrowing, and other DeFi operations while remaining anonymous. The added privacy benefits could attract users that prefer to keep their financial activities private due to security concerns, thus expanding the overall user base of DeFi.

Secure Multi-Party Computation (SMPC)

Secure Multi-Party Computation (SMPC) is an area of cryptography concerned with enabling multiple parties to jointly compute a function over their inputs while keeping those inputs private. With its cryptographic properties, Tangle Network can be extended to facilitate SMPC.

For example, consider a consortium of companies willing to collaboratively train a machine learning model using their data without exposing sensitive information to each other. By leveraging SMPC on the Tangle Network, these companies can jointly compute the machine learning model without revealing their individual datasets.

This not only preserves privacy but also fosters collaboration between different entities that would otherwise be reluctant to share sensitive data.

Cross-chain Atomic Swaps

In the current state of the blockchain ecosystem, transferring assets between different blockchains (cross-chain) often involves centralized exchanges or trusted intermediaries. With the Tangle Network and Webb Protocol, we can enable cross-chain atomic swaps with enhanced privacy.

An atomic swap is a smart contract technology that enables the exchange of one cryptocurrency for another without using centralized intermediaries. Users will be able to privately and securely exchange tokens between different blockchains directly. For instance, a user can exchange Bitcoin for Ethereum directly from their wallets without an exchange, ensuring privacy and reducing the reliance on intermediaries.

Private and Secure Messaging Systems

In today's digital age, privacy and security in communication are paramount. With the Tangle Network's zero-knowledge proofs and privacy-oriented architecture, we can develop a private and secure messaging system.

In this system, all communications would be encrypted and can be securely stored across multiple blockchains. This would ensure that only the intended recipients can read the messages. Additionally, the decentralized nature of the system would make it resistant to censorship and control by any single entity.

Privacy-Preserving Data Marketplace

Data is often referred to as the "new oil." However, data transactions can be challenging due to privacy and trust concerns. By leveraging the Tangle Network, we can establish a privacy-preserving data marketplace.

In this marketplace, data sellers can list their datasets without revealing the actual data. Using zero-knowledge proofs, they can provide evidence of the data's authenticity and other characteristics. Buyers, on the other hand, can verify these proofs and make purchases without exposing their identities. The entire transaction can be managed on-chain, ensuring fairness and transparency while preserving privacy.

Decentralized Identity Systems (DID)

Identity is fundamental in both the physical and digital worlds. However, traditional identity systems are often centralized and vulnerable to attacks. The Tangle Network can support Decentralized Identity Systems (DID), offering privacy, control, and cross-chain compatibility.

In a DID system on the Tangle Network, each user can generate a self-sovereign identity that could be used across different blockchains. With zero-knowledge proofs, users can prove certain attributes of their identity without revealing any unnecessary personal information. This would not only enhance privacy but also give users full control over their identities, avoiding reliance on any single authority.

These use cases showcase the versatility and potential of the Tangle Network and Webb Protocol in various sectors, underscoring its ability to drive forward both privacy and interoperability in the blockchain space.