Introduction

An Introduction to Ingot Protocol - Object-Oriented UTXO for Tondi

Introduction

An Introduction to Ingot

What is Ingot?

Ingot is a comprehensive protocol that incorporates a data insertion mechanism, an open-source indexer, object-oriented UTXO (oUTXO) model, and robust APIs. It leverages Tondi's high block rate, scalability, and decentralized Proof-of-Work (PoW) Layer-1 to facilitate efficient asset creation, address UTXO bloat concerns, and support a sustainable ecosystem.

Additionally, the Ingot Protocol sets standards for creating tokens, NFTs, inscriptions, and decentralized applications on the Tondi network, fostering the development of a diverse ecosystem of decentralized applications.

How Ingot works:

Ingot introduces "Pay2Ingot," a new type of transaction output on Tondi that acts as a container for digital assets. Think of it as a versatile envelope: you can seal inside tokens, inscriptions, NFTs, or even application data, all secured by Tondi's robust consensus.

At its core, Ingot follows a "fail-closed" philosophyโ€”keeping things secure by rejecting anything unfamiliarโ€”while embracing "privacy-first" principles. It ensures that multi-party transactions look identical to single-user ones on-chain, protecting user anonymity. Ingot's v1.0 design is aggressively simplified: just four locking options and two signature types, making it lightweight yet powerful.

Why choose Ingot?

The primary principle guiding the protocol's design is to avoid imposing negative effects on Tondi, unlike certain protocols that contribute to the "UTXO bloat" issue in Bitcoin. Ingot provides a straightforward approach to asset creation, supplemented by an open-source indexer and a suite of APIs, enabling seamless interaction with the protocol.

By adopting Ingot, developers, artists, and influencers can leverage the Tondi network to create, manage, and transfer digital assets efficiently and securely, promoting innovation and growth within the Tondi network.

Key advantages:

  • Simplicity: Minimal design with only essential features, making it easy to understand and implement
  • Privacy-First: MuSig2 support makes multi-signature transactions indistinguishable from single-signature ones
  • Bitcoin-Compatible: StandardSchnorr signatures fully compatible with Bitcoin Taproot (BIP340/341)
  • Scalable: Designed to work seamlessly with Tondi's high-throughput DAG architecture
  • Flexible: Supports tokens, NFTs, inscriptions, DAOs, and custom applications through schema templates

Key features

  • Pay2Ingot Output Type: Ingot employs a new transaction output type (ScriptPublicKey version 2) to embed data into the Tondi network, ensuring efficient data storage and avoiding UTXO bloat, thereby maintaining the network's scalability and longevity.

  • oUTXO Model: Ingot introduces the object-oriented UTXO (oUTXO) model, which defines a set of rules and conventions for creating and managing assets on the Tondi network. This model ensures unique active tips, spend-old-create-new semantics, and deterministic conflict resolution.

  • Schema Template Library: Ingot provides a comprehensive standard schema template library covering tokens (BRC-20 compatible), NFTs (ERC-721 compatible), inscriptions (text and images), DAOs (proposals and voting), and applications (social posts and digital identities).

  • Privacy Enhancements:

    • MAST (Merkle Abstract Syntax Trees): Hides alternative spending paths, revealing only what's necessary
    • MuSig2 Support: Group signatures blend seamlessly with individual ones, keeping collaborations private
    • Optional Reveals: Commit to data without immediately exposing it, allowing for timed or conditional disclosures

  • Flexible Locking Mechanisms: Ingot offers four straightforward ways to secure assets:

    • None: Open to anyoneโ€”perfect for public inscriptions
    • PubKey: Simple ownership with a public key, supporting group signatures for teams
    • ScriptHash: Custom rules via Tondi's virtual machine or external VMs, including time-based locks
    • MastOnly: Pure privacy mode, hiding all options behind a MAST structure

  • Universal VM Support: Ingot's ScriptHash lock mechanism provides a foundation for executing code on virtually any virtual machine. This architectural flexibility means that, in the future, Ingot has the potential to realize true universal blockchain interconnectionโ€”enabling assets and contracts from Bitcoin, Ethereum, Solana, and countless other chains to interoperate seamlessly on Tondi.

  • Layer 2 Infrastructure: Ingot serves as a foundational infrastructure for building Layer 2 solutions on the Tondi network. Its open and standardized protocol offers a robust framework for developers to create scalable and efficient Layer 2 solutions, ensuring interoperability and future scalability while preserving the security and decentralization of the Tondi network.

  • Fee Mechanism: To sustain the Ingot ecosystem, the protocol includes a fee mechanism. Fees are calculated based on transaction size (byte-based billing), ensuring fair resource allocation and miner incentives.

Benefits to the Tondi Ecosystem

As the Tondi ecosystem continues to evolve, Ingot is positioned to significantly contribute to the growth and innovation of the Tondi ecosystem by offering several advantages:

  • Increased Adoption: The ability to issue assets on Tondi makes the network more accessible for developers and projects, potentially leading to higher adoption rates. Utilizing standard templates, creating tokens, NFTs, and inscriptions becomes straightforward and user-friendly.

  • Layer2 Infrastructure: As all Layer 2 Rollup solutions require data to be written back to Layer 1, Ingot serves as a critical component for developing Layer 2 solutions on Tondi. The oUTXO model provides the necessary state management and conflict resolution mechanisms.

  • Seamless Integration: Ingot is designed for easy integration with the broader Tondi ecosystem, empowering developers to create cross-chain applications and utilize the protocol's features within the Tondi network. The protocol's Bitcoin compatibility (Taproot/BIP340) enables cross-chain tooling and verification.

  • Privacy and Security: Ingot's privacy-first design ensures that user activities remain protected. Multi-signature transactions are indistinguishable from single-signature ones, and MAST trees hide unused spending paths, providing strong privacy guarantees.

  • Developer-Friendly: With comprehensive schema templates, CLI tools, and well-documented APIs, Ingot makes it easy for developers to build on Tondi. The protocol's minimalist design reduces complexity while maintaining flexibility.

  • Ecosystem Growth: By supporting tokens, NFTs, inscriptions, DAOs, and custom applications, Ingot enables a wide range of use cases. This diversity fosters innovation and attracts different types of users and developers to the Tondi ecosystem.

Architecture Overview

The following diagram illustrates Ingot's layered architecture:

Application Layer

L2 Indexer Layer

L1 Consensus Layer

Yes

Yes

Yes

No

Transaction Output

Pay2Ingot?

IngotOutput

Schema ID

Hash Payload

Flags

Lock

MAST Root

L1 Validation

Signature/VM Check

MAST Proof

Valid?

On-Chain

Indexer

Parse Payload

Schema Router

Known Schema?

State Machine

raw_data Mode

oUTXO Rules

Single Active Tip

Spend Old Create New

Conflict Resolution

Artifact State

Wallet APIs

Explorer UIs

dApps

Architecture Overview Explanation:

This diagram illustrates Ingot's three-layer architecture, demonstrating how transactions flow from creation to application use.

Layer 1 - Consensus Layer (L1): The top layer handles on-chain validation and security. When a Pay2Ingot output is detected in a transaction, the consensus layer performs comprehensive validation:

  • Validates output structure (Schema ID, Hash Payload, Flags, Lock, MAST Root)
  • Verifies signatures and authentication proofs
  • Executes VM checks for ScriptHash locks
  • Validates MAST proofs for privacy-preserving spending paths
  • Only transactions passing all checks are accepted onto the chain

Layer 2 - Indexer Layer (L2): The middle layer processes validated Ingot outputs and maintains artifact state:

  • Parses payloads from confirmed transactions
  • Routes to appropriate schema handlers based on Schema ID
  • Executes state machines for known schemas
  • Falls back to raw_data mode for unknown schemas
  • Enforces oUTXO rules: single active tip, spend-old-create-new semantics, deterministic conflict resolution
  • Maintains consistent artifact state across the network

Layer 3 - Application Layer: The bottom layer exposes functionality to end users:

  • Wallet APIs provide asset management and transaction building
  • Explorer UIs display asset history and current state
  • dApps integrate Ingot functionality into decentralized applications

This layered design separates concerns: L1 ensures security and consensus, L2 provides rich state tracking, and the application layer delivers user-friendly interfaces.

Next: Data Insertion Mechanism