Wanchain Whitepaper

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WANCHAIN ® Building Super Financial Markets for the New Digital Economy Whitepaper Version 0.9.1

Abstract Digital currency, represented by Bitcoin and cross-chain protocol and a distributed ledger Ethereum, is blazing through traditional that records both cross-chain and intra-chain financial systems with the force of a prairie transactions. Any blockchain network, wheth- fire. Although blockchain technology is still in er a public, private or consortium chain, can the initial stages of development, its transpar- integrate with Wanchain to establish connec- ent mechanisms and open concepts show tions between different ledgers and perform tremendous vitality. Wanchain seeks to link low cost inter-ledger asset transfers. The Wan- the present to the future, through the explora- chain ledger supports not only smart tion and implementation of blockchain tech- contracts, but also token exchange privacy nology. protection. Wanchain aims to build a distributed“bank”. With Wanchain, any institution or individual Just as traditional banks are the infrastructure can set up their own virtual teller window in of the current financial framework, Wanchain the“bank”and provide services such as loan seeks to build a new, distributed infrastruc- origination, asset exchanges, credit payments ture of digital assets to form an improved, and transaction settlements based on digital modern framework - an ambitious goal assets. Under the guarantee of“banks”based indeed. on the blockchain infrastructure, more people can participate in financial services based on Wanchain connects and exchanges value digital assets. To describe it more accurately, between different blockchain ledgers in a Wanchain is a distributed super-financial distributed manner. It uses the latest cryp- market based on blockchain. tographic theories to build a non-proprietary

Contents Abstract 00 1 Wanchain Design Concept 01 1.1 Blockchain Emergence and Significance 01 1.2 Design Background 02 1.3 Design Objectives 03 1.4 Positioning 04 2 Wanchain Architecture and Technology 04 2.1 Architecture 05 2.1.1 Distributed Ledger and Smart Contract Virtual Machine 2.1.2 Native Coin 2.1.3 Consensus Mechanism 2.1.4 Intra-Chain Transactions 2.1.5 Cross-Chain Integration 2.1.6 Cross-Chain Transactions 2.2 Technology 07 2.2.1 Fully Decentralized and No Trusted Third-Party Participation 2.2.2 Unmodified Original Chain and Low Integration Threshold 2.2.3 Cryptography Based Security Guarantee 2.2.4 Cross-Chain Transaction Privacy Protection 3 Cross-Chain Communication Protocol 09 3.1 Functional Modules 09 3.2 Data Transmission Process 09 4 Key Technologies 12 4.1 Verification Node Consensus Mechanism 12 4.2 Incentive Mechanisms 13 4.2.1 Verification Nodes 4.2.2 General Nodes

4.3 Locked Account Generation Scheme 14 4.3.1 Introduction 4.3.2 Design Description 4.3.3 Scheme Generation 4.3.4 Advantages 4.4 Smart Contract Token Transaction Anonymity 18 4.4.1 One-Time Account System 4.4.2 Ring Signature Scheme 4.4.3 Privacy Protection Transaction Flow 5 Wanchain Applications 23 5.1 Borrowing and Lending 23 5.2 Payment and Settlement 24 5.3 Transaction and Exchange 24 5.4 Investment and Financing 24 5.5 Other Applications 25 6 Conclusion 26 References 27 Appendix: Glossary of Terms 28

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 01 1/ Wanchain Design Concept 1.1/ Blockchain Emergence and Significance Friedrich A. Hayek, the eminent Austrian econ- away from control by a single institution and omist, believes that if we let currencies com- move in a more fair and transparent direction. pete in the market by survival of the fittest, like other commodities, market mechanisms can The concept of Financial Inclusion seeks to give filter out the most appropriate currency for us, disadvantaged people and small enterprises, just like it does for those other commodities. worldwide, better access to the financial system and low-cost financial services. Two and a half In January 2009, the first Bitcoin block was billion people in the world are unable to use mined. The emergence of Bitcoin transcend- banks, open savings accounts or obtain credit ed Hayek’s ideal state where responsibility cards and are therefore separated from the for controlling the total amount of money in a global economy. Cross-border remittances system is borne by specific institutions, through banks incur high fees. Ordinary inves- whose self-interest keeps the total currency tors can only buy relatively low-end financial amount at a level acceptable to most users. products from banks and other financial institu- tions and can't take part in early-stage invest- The switch from credit authorization by institu- ments of technology companies such as Google tions to inviolable mathematical laws for and Alibaba before they are listed. It is also recording the exchange of value is another difficult for many small to medium enterprises great innovation. In essence, currency is a to obtain loan support from banks, despite consensus. It is an agreed upon accounting good credit and outstanding performance, representation for a more convenient because they are not the target customers of exchange of value. Reviewing mankind’ s traditional banks under the 80/20 rule. financial history, from the bartering of one thing for another, to the use of cattle, sheep or Georg Hegel said“Reality is a historical process,” shells as universal equivalents, to the use of and the emergence of blockchain technology is precious metals as money, and the current use changing the aforementioned situations. When of paper currency with a strong credit base, Venezuela recently devalued its currency, Bitcoin human currency is approaching abstract math- became a popular safe-haven asset. Workers in ematics and its nature as symbols or ledgers is foreign countries, such as the Philippines, remit more apparent. Blockchains make human their income to their weak hometown banking accounting principles align closer to mathe- facilities through blockchain networks. Investors matics.It helps the entire accounting system who participated in the ICO of well-known block- get

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 02 projects, such as Ethereum, received returns can be created and implemented and where hundreds of times the size of their initial invest- the transaction privacy can be effectively ments. Blockchain technology is pushing Inclu- protected. Of course, such "banks" will be com- sive Finance to brand new heights. pletely different from traditional banks, except for some functions such as debit and credit, As of June 2017 there are thousands of digital remittance, settlement, and sale of financial currencies based on blockchain technology products. With corresponding ability and capi- with a total market value of over $100 billion, tal strength, any organization or individual can and the number and value of digital curren- set up their own business windows. They can cies continues to grow. Digital currency is provide various services, under the guarantee becoming more acceptable as a form of of a distributed blockchain infrastructure, to payment in financial transactions; many provide more financial services for more organizations are exploring ways to record people. More accurately, this is a future finan- traditional forms of assets, such as commer- cial infrastructure based on digital assets and a cial bills and loyalty points, into blockchains, distributed financial market. usually in the form of consortium chains. Digital asset exchanges, which are similar to traditional financial institutions, have emerged. These exchanges perform the 1.2/ Design Background banking function of exchanging digital assets. They are a platform for buying and In the early days of traditional banks, currency trading tokens, similar to those of a stock exchange was their main purpose, and func- exchange. A platform for cross-border token tions such as currency custody, payments, transfers performs functions similar to settlements and remittances were gradually cross-border bank remittances. developed. At last, modern banks with depos- its and loans as their main business were However, these platforms, in various degrees, born. It can be said that a bank is a ledger are operating in a centralized manner, which recording debtor-creditor relationships. Every not only brings about the security risks of receipt, payment and transfer of funds is, in centralization, but also blocks the wider adop- fact, a change of corresponding assets in a tion of blockchain technology. bank ledger that supports more than one asset. An exchange settlement among differ- Based on this phenomenon, we need a ent banks is actually an asset record change distributed "bank" where different digital on different ledgers. It must be ensured that currencies and digital assets can be trans- the assets are not double spent, regardless of ferred in, transferred out and exchanged by whether the asset changes are in the same blockchains. We need a place where financial ledger or in different ledgers. In general, the products and contracts based on digital increase or decrease in the amount of an currencies and digital assets

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 03 asset in a ledger must correspond to an Cross-Chain Asset Transfer: equivalent opposite change in another · Connect existing major digital currency ledger. The block chain provides an excellent networks (such as Bitcoin and Ethereum) and solution to the problem of double spending completing the asset exchanges without in the same ledger in different accounts. Solv- modifying the mechanism of original chains. ing the problem of transferring assets among This integrates newly generated digital currency networks with Wanchain at a very different blockchain ledgers is key to the low cost. wider application of blockchain technology. Wanchain requires a distributed approach to · Integrate consortium chains with Wanchain. support the access of different blockchains This fulfills the functions of transferring assets and the transfer of assets - that is, to support from original chains to Wanchain, transferring cross-chain transactions. assets from Wanchain back to the original chains, and trading various assets on Wan- Effective protection of users’privacy is one of chain. the foundations of traditional banking. Any financial transaction is needed to be protect- · Ensure the security of cross-chain transac- ed from a third party. Wanchain needs to have tions and the stability of cross-chain transac- the same capabilities. tion services. Wanchain is a distributed financial market. In Transaction Privacy Protection: principle, any organization or individual can · Allow trading parties to choose to conduct develop and provide their own financial transactions with privacy protection. services based on Wanchain. It requires Wan- · Provide privacy protection for transfers and chain, a blockchain infrastructure, to support exchanges of digital assets. the programmable smart contract function. · Provide anonymous protection of digital asset In summation, Wanchain is designed under holders. such a context. Functional Extensibility: · Become a distributed platform for the exchange of various digital currencies. 1.3/ Design Objectives · Carry out deposit and loan business for different digital currencies. In order to build a more widely spread block- chain technology and digital asset applications, · Conduct transactions of digital assets using Wanchain has set the following objectives digital currency as a medium. based on the research on cross-chain technolo- gy, combined with the characteristics of decen- · Issue and trade brand new digital financial tralization and its application scenarios: assets.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 04 1.4/ Positioning Through the establishment of links among contains native coins, supports smart different blockchains, the inter-ledger trans- contracts, and has privacy protection mecha- fer of assets can be achieved, providing an nisms for smart contract token transactions. infrastructure for financial applications based Any developer may develop applications on on digital currencies and digital assets. We Wanchain in accordance with its application seek to give full play to the blockchain func- development standards. tion of carrying and transferring value, and the equal and open concept of blockchain. From a blockchain technology development 2/ Wanchain perspective, Wanchain applies secure multi-party computation, threshold Architecture secret-sharing, a ring signature scheme based on elliptic curve cryptography, a one-time account generation mechanism, and Technolo- and many other cutting-edge cryptographic technologies. Wanchain also solves the priva- gy cy protection problem of smart contract token transactions. To some extent, Wan- chain is an advanced cryptographic applica- tion that solves the real problems of block- chains and represents the developmental Wanchain provides an infrastructure for direction of the blockchain technologies. cross-chain transfers between different block- Wanchain has a professional cryptography chain networks. research team to apply cryptography to the blockchain field and contribute to the indus- Wanchain is a distributed ledger that: try as a whole. · achieves the interconnection and interopera- bility between different blockchain networks. From a blockchain application perspective, Wanchain is more than just a blockchain proj- · completes records of cross-chain transactions. ect of achieving cross-chain transactions and · maintains cross-chain transaction details. interoperability of multiple blockchains. Wanchain is a complete blockchain develop- Wanchain supports cross-chain transactions ment platform. Wanchain achieves the func- between mainstream public chains, between tion of cross-chain transactions, but it is also private chains, and between public and a blockchain running independently; it private chains.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 05 Figure 2.1: Model of Wanchain 2.1/ Architecture mechanisms for cross-chain transactions. These mechanisms are discussed in the following sections. 2.1.1 Distributed Ledger and Smart Con- tract Virtual Machine 2.1.4 Intra-Chain Transactions Wanchain is an Ethereum-based generic Common transaction methods in Wanchain ledger that runs applications independently, are the same as in Ethereum, but we have with account models and smart contracts added a privacy protection mechanism that is that implement various original Ethereum implemented through a ring signature functions. On top of those, we added scheme and a one-time account mechanism. cross-chain transactions and achieved smart contract token privacy protection. 2.1.5 Cross-Chain Integration Both blockchains and assets that integrate with 2.1.2 Native Coin Wanchain first need to be registered on Wan- Wancoin is the native coin of Wanchain. Both chain to make sure that they can be uniquely cross- and intra-chain transactions consume identified. These functions are completed via a certain amount of Wancoin. Wancoin is also chain and asset registration protocols. used in security deposits for the cross-chain verification nodes. For cross-chain transactions, we use secure multi-party computing and threshold 2.1.3 Consensus Mechanism secret-sharing joint anchoring schemes to Wanchain adopts a Proof of Stake (POS) achieveminimal-cost integration through the consensus mechanism for ordinary transac- cross-chain communication protocol without tions and implements consensus and incentive

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 06 changing the original chain’s implementa- ensure that the original chain assets can still tion. Wanchain is a complete platform that be traded on Wanchain. can be applied to broad financial applica- tions with privacy protection for smart In order to describe the transfer of assets contract token transactions of public and between a public chain and Wanchain, we’ll private chains. What’s more important is illustrate an example using Ethereum: that other blockchains developed on Wan- chain are equivalent to the homogeneous Transfer-In Process: Alice and Bob have blockchains of Wanchain and have the same accounts on Ethereum and Wanchain respec- cross-chain mechanism and seamless inte- tively, and Alice needs to transfer 10 ETH to Bob. gration with each other. Alice makes a cross-chain transaction request 2.1.6 Cross-Chain Transactions using the Wanchain wallet and initiates a When an unregistered asset is transferred transfer on Ethereum, with the recipient being from the original chain to Wanchain, Wan- an Ethereum cross-chain Locked Account. chain will create a new asset using a built-in Wanchain’s validator node receives the asset template to deploy a new smart cross-chain transaction request, verifies that contract based on the cross-chain transac- the transaction has been recorded on Ethere- tion information. When a registered asset is um, and creates a new smart contract token transferred from the original chain to Wan- ETH′ (ether prime) on Wanchain, which corre- chain, Wanchain will issue the corresponding sponds to the ETH needing to be cross-trans- equivalent tokens in the existing contracts to ferred to Bob on Wanchain. Figure 2.2: Cross-Chain Transaction From Ethereum to Wanchain

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 07 Transfer-Back Process: Bob wants to trans- Ethereum transaction with the transferor fer the 10 ETH he received from Alice to Chris. being the Locked Account that was previ- ously locked by Alice’s assets and the trans- Bob uses his Wanchain wallet to initiate a feree being Chris’s account on Ethereum. cross-chain transaction with the ETH′ asset After the validator node verifies the contract. Upon receiving the request, the confirmed transaction on Ethereum, the 10 validator node locks the corresponding 10 ETH′ locked under Bob’s account will be ETH′ assets. After successfully locking the cleared, meaning the equivalent asset is assets, the validator node uses the threshold transferred back to the original chain. secret-sharing mechanism to create an Figure 2.3: Cross-Chain Transaction from Wanchain to Ethereum The above describes the asset transfer-in and 2.2.1 Fully Decentralized and No Trust- transfer-back processes between Wanchain ed Third-Party Participation and the public chain, which is essentially the Currently, most cross-chain transactions are same as that between Wanchain and the conducted through exchanges and third-par- private chain. For details of the asset transfer ty trading platforms. But the blockchain process and data transmission process, cross-chain transaction platforms need the please refer to Section 3.2 Cross-Chain involvement of a third-party custodian Transaction Data Transmission Process. account. This leaves the secure and smooth completion of the entire transaction to the reliability of third-party participants. The 2.2/ Technology locked account mechanism of Wanchain

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 08 uses fully decentralized, multi-party comput- curve cryptography to ensure the security of ing and threshold secret-sharing technology the original signature solution, Wanchain uses: to perform the account management without the need of any third-party participation or · threshold secret-sharing technology, credit endorsement of any entities. · the locked account management solution 2.2.2 Unmodified Original Chain and based on multi-party computing, Low Integration Threshold In our cross-chain transaction solution, the · the privacy protection mechanism for smart account locking mechanism doesn’ t use contract token transactions, based on ring two-way anchoring, and doesn’ t need addi- signatures and one-time accounts. tional script extensions to identify and verify the Simple Payment Verification (SPV) proof. All All subsequent operations are automatically transaction data is transmitted into the node done between validator nodes of Wanchain network of the original chain after reconstruc- and don’t need coordination from transac- tion and integration on the Wanchain validator tion participants after initiating a cross-chain node. The format of the validator node is in line transaction. This leaves the smooth operation with the transaction type requirements. This of the entire system to the security of cryp- enables certain operations and computations tographic algorithms. of cross-chain transactions to be completed within the Wanchain network, without the 2.2.4 Cross-Chain Transaction Privacy need to modify the various original chain Protection mechanisms. This allows existing public and In Wanchain’s cross-chain transaction solu- private chains, based on other platforms, to be tion, assets on the original chain exist in the integrated with Wanchain with a low integra- form of smart contract tokens after they are tion threshold, thus reducing the cost of transferred into Wanchain. On one hand, we cross-chain transactions. hide the initiators of smart contract token transactions in a collection of accounts, via 2.2.3 Cryptography Based Security ring signature technology, so that they are not Guarantee traceable. On the other hand, we allow Mechanisms used by many existing one-time use of accounts in smart contracts, cross-chain exchanges often use logical secu- so the corresponding relationship with the rity, relying on participants to look out for original account on Wanchain cannot be their own self-interest. In other words, the established. By using a combination of the participants will not break the cross-chain above two methods, Wanchain achieves the transactions at the expense of damaging their confidentiality of smart contract token trans- own interests. This can be called “The actions, allows cross-chain transactions of Hypothesis of Rational Participants”. assets under privacy protection, expands application scenarios and provides a better In addition to the application of original elliptic user experience.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 09 3/ Cross-Chain Communi- cation Protocol The Wanchain cross-chain communication The first function is that the user on the origi- protocol defines the specifications for data nal chain makes the cross-chain transaction transmission between Wanchain and other request to Wanchain. This is the starting point chains, allowing interconnections and data flow of the Wanchain asset transfer-in transaction. between chains. The following paragraphs describe the module functions and data trans- The second function is the acknowledge- mission processes. ment of receipt of Wanchain’s validator node returning success or not. 3.1/ Functional Modules The third function is that Wanchain’s valida- tor node sends the legal transaction to the The cross-chain communication protocol consists of original chain to complete the transfer-back three functional modules: process. Registration module: this module provides two Transaction Status Query Module: this functions. module mainly provides the function of que- rying the confirmation status of the asset The first is to register the original chain partici- transfer-in transaction on the original chain pating in cross-chain transactions. This gener- to Wanchain’s locked account and the trans- ates a unique ID through specific algorithm fer-back transaction of Wanchain’s locked rules for the original chain, maintaining the ID account to the original chain. These are the registry of the original chains to avoid fraud control marks of the cross-chain transaction caused by false chains. progress. The second function is to register the asset to be transferred. This generates a unique ID through 3.2/ Data Transmission specific algorithm rules for the asset to ensure Process the uniqueness of the assets. Here we take the user Alice, who wants to Cross-chain Transaction Data Transmission transfer value from an original (Ori) chain to Module: this module provides three functions. Wanchain, as an example to illustrate the asset transfer-in data transmission process:

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 10 Step1: Alice initiates a transaction OriTx with her OriAccount on the original chain to send an asset OriAssetID to Wanchain’s locked account LockedAccount and broadcasts the cross-chain transaction request InterTxReq to Wanchain via the cross-chain transaction data transmission module. The function takes the transaction data as parameters, such that: OriTxInfo=(OriBlockNum,OriTx) InterTxReq=(OriAccount,OriChainID,OriAssetID,value,OriTxInfo,sig) Step2::The cross-chain transaction proof node (Voucher) on Wanchain receives a cross-chain transaction request and checks whether the transaction has been confirmed on the original chain through the transaction status query module. The function Token Locked Flag (TLF) takes OriTxInfo, OriChainID and OriAssetID as parameters, such that: TLF=CheckCommitment(OriChainID,OriAssetID,OriTxInfo) Step3: The cross-chain transaction proof node (Voucher) gathers consensus on the TLF results and if TLF=true, then OriTx has been confirmed. The verification node (Validator) receives the data TLF=true, and then checks the asset registry of the original chain. If it is a new asset, the asset will be registered and added into the registry. The public account WANAccount, maintained by the Validator initiates a transaction WANTx, deploys a smart contract for the new asset and distributes tokens of Value for OriAccount in the contract. If it is a registered asset, the transaction WANTx distributes tokens of Value for OriAccount directly into the existing asset contract. If WANTx is confirmed, the Validator uses the cross-chain transaction data transmission module to reply to Alice about the successful receipt of the cross-chain transaction: response=(WANAccount,InterTxReq,True,addressSC,sigvalidator) If WANTx becomes invalid, the locked account management node (Storeman) initiates a transac- tion on the original chain to transfer Alice’s locked asset back to her account OriAccount. If the consensus result for TLF is confirmed by the Voucher as false, the cross-chain transaction is considered invalid.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 11 Alice WAN Wallet Step1 WITxReq(from ETH to WAN) OriTx(ETH) InterTxReq ETH Chain Voucher Con�irm OriTx (ETH)committed Step2 false WITxReq refused or time out TLF Ture and consensus reached Generate UnlockedOriTx (ETH) Validator Generate WANTx Storeman Step3 Timeout False WANTx True WITxReq committed Figure 3.1: Cross-Chain Data Process from Ethereum to Wanchain In the next example, we have user Bob transferring Value from Wanchain back to the original chain to illustrate the asset transfer-back data transmission process: Step1:Bob uses BobAccount on Wanchain to send the transaction WANTx , which calls the asset transfer-back function of the smart contract corresponding to the asset of the original chain. Step2: The Validator calls the smart contract after receiving the transaction. The Voucher tests the results of the contract execution and gathers consensus. If TLF=true, which means that the token value for Bob in the contract has been locked, the Storeman then broadcasts the transac- tion of Locked Account, which transfers Value to BobAccount on the original chain, via the cross-chain transaction data transmission module: OriTx=(LockedAccount,BobAccount,value,sigstoreman) The Voucher checks whether this transfer is confirmed via the transaction status query module, and gathers consensus on confirmation flag TL F. Step3: If the Token Unlocked Flag (TUF) = true, the Validator will clear the assets locked in the smart contract; if TUF=false, it means that transaction on the original chain is not confirmed and the Storeman will re-initiate the transaction.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 12 Bob WAN Wallet Step 1 WITxReq(from Wan to ETH ) OriTx(WAN) InterTxReq WANchain Voucher Confirm OriTx(WAN) committed Step 2 false WITxReq refused or time out TLF True and consensus reached Commit UnlockedOriTx (ETH) Storeman Generate UnlockedInterTx Storeman Voucher Confirm Unlocked OriTx(ETH) committed Broadcast TUF Step 3 Validator TUF unconfirmed or timeout TUF TUF Confirmed Clear MT WITxReq committed Figure 3.2: Cross-Chain Data Process from Wanchain to Ethereum 4/ Key Technologies is subject to the threat of 51% power attack, 4.1/ Verification Node Con- while similarly, the POS consensus algorithm sensus Mechanism is theoretically subject to a threat of collusion attack of participants. As a result, Wanchain Wanchain adopts the Proof of Stake (POS) introduces this mechanism to increase the consensus algorithm, the description of which opportunity cost of verification node collu- can be found in a series of papers from Ethere- sion, allowing Wanchain to record cross-chain um, so it is not detailed here. Theoretically, the transactions faithfully and follow the Proof of Work (POW) consensus algorithm is cross-chain processes objectively.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 13 In short, the verification nodes on Wanchain network, i.e. where the gains for collusion are are divided into three categories: greater than the opportunity cost, the risk of collusion between verification nodes will ·Cross-chain transaction proof nodes (Vouch- increase. ers) · Locked account management nodes (Store- On the contrary, when the overall value of the men) Wanchain is sufficiently high, collusion · General verification nodes (Validators) between verification nodes means giving up margin held by them that are staked to the Vouchers are used to provide proof of transac- tokens on Wanchain, greatly increasing the tions between the original account and the opportunity cost of collusion. The nodes will locked account. A Voucher is required to pay a not collude to destroy the entire network for certain security deposit. The higher the cross-chain asset risking their existing inter- deposit, the greater chance the proof if ests and long-term income, thus reducing provides will be adopted. If the proof is found the risk of collusion. to be false, the security deposit will be deducted from the holding account and the Furthermore, the more cross-chain transac- authorization of the Voucher is revoked. tions are involved in the Wanchain, the great- er the value carried by Wanchain. The higher The Storeman, upon receiving a notice, is the risk for verification nodes to collude, the responsible for computing the signature more secure the entire network, which will shares according to its own part of the key and attract more and more cross-chain transac- merging the signatures parts into a complete tions. This is an interactive process, with the signature for the lock account. When this is value transferring to the Wanchain network. done, operations related to the locked Wanchain is bound to become increasingly account are performed (see the specific robust. process in section 4.3). The Validator informs the Storeman of opera- tional actions related to the locked account 4.2/ Incentive Mechanism and complete the record of operations on the Wanchain whenever a transaction proof 4.2.1 Verification Nodes reaches a consensus. The Vouchers receive transaction fees from the corresponding shares as a security depos- The security of the Wanchain network it. If the proof provided is found to be false, depends on its overall value. When the value the security deposit is deducted from the of all cross-chain transactions is far greater holding account and the node authority than the overall value of the Wanchain status will be revoked.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 14 A Validator completes the recording of transac- Such an incentive mechanism ensures that tions on Wanchain to gain a part of the transac- stakeholders in Wanchain can earn stake-re- tion fees. lated benefits while also motivating them to entrust their stakes to trusted verification A Storeman receives a corresponding key nodes. This improves the security and stabili- share according to the stake it holds and calcu- ty of Wanchain. lates the corresponding signature share to be added into the transaction. The Storeman obtains the transaction fee involved in the verification transaction according to the key 4.3/ Locked Account Gen- share proportion. If the key share information eration Scheme is offline or lost, the transaction fee cannot be claimed. Likewise, if the nodes sign the error transaction, the credentials of the Storeman The Locked Account Generation Scheme is will also be taken away. based on secure multi-party computation and threshold key sharing. In summary, the verification node incentive mechanism will motivate the Vouchers to 4.3.1 Introduction provide correct transaction proof, the Valida- Secure multi-party computation is both the tors to complete the recording of Wanchain theoretical basis of distributed cryptography faithfully, and the Storemen to stay online and and a fundamental problem of distributed safely keep their own key shares. computing. The theory arises from “Yao’s Millionaires’Problem”in 1982. Simply speak- 4.2.2 General Nodes ing, secure multi-party computation is about Only those holding a high enough stake in the a group of participants, referred as P1��Pn, Wanchain network can become a verification who work together to compute the function node. Nodes that fail to be verification nodes f(x1,��,xn )=(y1,��,yn) securely. Then inputs are known as general nodes. The general of function f are held, one each, by n partici- nodes cannot participate in the verification pants. Pi holds the secret input xi, and after process of cross-chain transactions, but they computation Pi gets output yi. In this situa- can entrust the stakes they hold to the trusted tion, security requires that even if some verification nodes. The entrusted verification participants cheat in the computing process, nodes distribute the transaction fees they the correctness of the computing result must receive to the general nodes in proportion to be ensured. This means that when computa- the entrusted stakes. If the entrusted verifica- tions are completed, every participant must tion node is punished, general nodes will bear get the correct output yi and all input from a corresponding loss. participants remain privileged. Pi can get no

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 15 extra information except (xi,yi) through the minimum collection of k key shares are computation. needed to reconstruct the key. Thus, any operation on an account will require at least The threshold key sharing scheme is designed k participants’participation to ensure the to solve the secure key management prob- account is secure and trustworthy. lem. According to design principles of modern cryptography, the security of cryptography 4.3.2 Design Description depends on the security of the keys. Compro- We designed the Locked Account Generation mised secure keys will ruin the security of Scheme based on secure multi-party compu- cryptography. So key management is of great tation and threshold key sharing. Validators importance in security research and design of of Wanchain (Storemen) are in charge of cryptography. In a situation when an account maintenance and management of the keys is managed by multiple parties with different of the Locked Accounts to ensure they are interests, securely managing the distribution secure and trustworthy. In addition, this of the keys can be difficult. To solve this prob- mechanism lowers the risk of losing keys and lem, Israeli cryptographer Adi Shamir has strong adaptability and stability in an proposed the Shamir’s Secret Sharing ad-hoc network, which has no fixed topolo- threshold key sharing scheme. gy. In this scheme, a key is divided into n pieces The Locked Account Generation Scheme is and distributed to n participants. Every partic- as follows: ipant holds one piece of the key share, a Step1:Select a secure random number. There are n validators on Wanchain, named as P₁……Pn. Each validator selects a secure random number di and k-degree polynomial fi (x)=di+ai,1 x+⋯+ai,k-1x . The scheme sends fi (j)to other validators through secure channel and broadcasts di G to every k-1 node of the network, G being the base point of the elliptic curve. Step2:Check the correctness of the messages. After receiving other validators’messages, Pj will check the correctness of the messages: �lag=Check(f₁ (j),……,fn (j)) If flag=true, then Pj accepts and saves it locally.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 16 If flag=false, then Pj rejects it and requires other validators to resend the messages. Step3: Receive key share. When all messages are sent and checked out, then every validator gets their key share: key_sharek=∑(j=1) fj (k) ,k=1,……,n Step4: Compute the address of the Locked Account. Locked_Account_Address=GenerateAddress(d₁ G,……,dn G) After all the operations above, the Locked Account n is generated, and its key is divided into n key shares and then distributed to n validators of Wanchain. Any operation on the Locked Account will require at least k of n validators’participation to complete. Figure 4.1: Generating Locked Account’s Address

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 17 4.3.3 Scheme Generation During the generation process of the Locked Account, the private key is never generated or recon- structed in the entire network. Generating the signature of the Locked Account needs at least k validators’participation. They compute the signature shares separately through the key shares they hold, and then reconstruct the full signature using signature shares. The Locked Account Signature Scheme is as follows: Step1:Compute the Signature Shares A quantity of n Wanchain Validators compute signature shares of the message using key shares they hold: signature_sharej=Generate_Sig(m,key_sharej) Step2:Send out the signatures shares. Each Validator sends its signature share to other Validators. Step3:Reconstruct and broadcast the complete signature. When a Validator receives more than k signature shares, it will reconstruct the full signature and broadcast it to other Validators: signature=Construct_Sig(signature_share₁,……,signature_sharek) Step 4: The full signature of Locked Account is generated Figure 4.1: Generating Locked Account’s signature

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 18 4.3.4 Advantages the whole system operates with stability and Almost all cross-chain transaction schemes security even in unforeseen circumstance need a mechanism to lock the assets of the where some part of network paralyzes or lose original chain. Only when the triggering some key shares. At the same time, the key condition is met will the locked assets be share of every validator is updated periodical- unlocked and returned to the original ly or when a triggering condition is met, in account or some other account. order to eliminate the threat caused by key share exposure. Existing mechanisms use the Hashed TimeLock Contract scheme, the Trusted · Easy Integration and Efficient Data Stor- Third-Party Escrow Account scheme and the age Multi Signature Account scheme. Any operation on the Locked Account is done by the original transaction of the original Compared to these mechanisms, the Locked chain. No new transaction type or verification Account scheme has several advantages: mechanism is added. So theoretically, any chain can be integrated with Wanchain, and · Fully Decentralized without Third-Par- the cost is negligible. At the same time, com- ty Participation pared to the multi-signature account scheme The Locked Account is generated through that relies on the logic of smart contracts to secure multi-party computation. In this process, achieve multiparty management, the Locked no participation or endorsement of a trusted Account generation scheme achieves multi- third-party is needed. All we need is information party management through principles of cryp- interaction and computation by Validators tography. The final transaction has only one through secure channels. Compared to the signature, not several signatures. Thus, this trusted third-party escrow account scheme, the mechanism is more efficient on data storage. Locked Account generation scheme has a lower cost and more flexibility. · Secure and stable The key for the Locked Account is distributed 4.4/ Smart Contract Token to validators of Wanchain through Shamir’s Transaction Anonymity Secret Sharing Scheme (a.k.a. Shamir’s (k, n)-threshold secret sharing scheme). Each On Wanchain, ring-signature and one-time Validator holds one piece of the key share. accounts are implemented to achieve ano- Even when some Validators are offline or lose nymity in smart contract token transactions. their key shares, the signature of the Locked Ring-signature mixes the transaction sender Account can still be generated, and the trans- in a set of fake members to make the sender action can be executed with the participation untraceable. A one-time account is generated of at least k validators. Therefore, the Locked for each transaction, so it cannot be linked to Account generation scheme can ensure that the true owner.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 19 4.4.1 One-Time Account System key. To create a one-time main account, she As a foundation for anonymity, the one-time generates a new account (B,b). The main account system is especially important. Each account is ((A,B),(a,b)) with main public key user has only one main account and lots of (A,B), main private key (a,b) and scan key sub-accounts. So, if anyone wants to keep (A,b). Usually a sub-account is generated by a anonymous in a smart contract token trans- transaction sender for the receiver. For exam- action, he needs to generate an associated ple, Bob wants to send some tokens to Alice. account to create a one-time main account He invokes the function OTA_GenerateAc- together with his original one. count( ) with Alice`s main account as a parameter to generate Alice`s sub-account On Wanchain, Alice has an original account (A1,S1): (A,a). A is the public key and a is the private (A₁,S₁ )=OTA_GenerateAccount((A,B)) Alice invokes the function OTA_ScanAccount( ) with her own scan key to scan every sub-account (Ai,Si): �lag=OTA_ScanAccount((Ai,Si ),(A,b)) When it comes to (A₁,S₁), the flag returns true. So (A₁,S₁) belongs to Alice. She invokes the function OTA_GetPrivateKey( ) with her main private key to get the private key of (A₁,S₁): sk=OTA_GetPrivateKey((A₁,S₁ ),(a,b)) In the One-time account system, the scan key helps Alice learn which sub-account belongs to her and the main private key guarantees that she is the only one who can get the private key. No one could change the owner of a sub-account without the associated scan key and get the private key without main private key. Therefore, anonymity and security is guaranteed.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 20 Figure 4.3: One Time Account System 4.4.2 Ring Signature Scheme The Ring Signature scheme was first provided in 2001 by Rivest and others. It is a special kind of Group Signature scheme. A Group Signature scheme needs a trusted center and secure setup, which would mean that the signer can be traced by the trust center. The Ring Signature scheme solves this serious problem by removing the trusted center and secure setup. Since the Ring Signature scheme was introduced, many practical schemes have been designed based on the Elliptic Curve Cryptography (ECC), such as the trapdoor technique. Generally speak- ing, there are four kinds of Ring Signature schemes: Trapdoor Ring Signature, Linkable Ring Signa- ture, Anonymity Revocable Ring Signature, and Deniable Ring Signature. To provide anonymity in Smart Contract Token transactions, the Ring Signature scheme based on ECC is implemented in Wanchain. There are three parts to the Ring Signature scheme. Details are as below, taking the signer (P,x) as an example:

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 21 GEN:Get the public parameters. The signer generates a public key set including n members from the world state through the function GeneratePublicKeySet( ) with the public key as a parameter: publickeyset=GeneratePublicKeySet(P) The signer makes a key image I by invoking GenerateKeyImage( ) with the public key and private key: I=GenerateKeyImage((P,x)) SIG:Generate the ring signature. The signer generates the ring signature of message m through GenerateRingSignature( ) with publickeyset, I and x: ringsig=GenerateRingSignature(m,publickeyset,I,x) VER:Verify the ring signature. The signer verifies the ring signature of message m through VerifyRingSignature( ) which returns true or false with publickeyset, I and ringsig: �lag=VerifyRingSignature(m,publickeyset,I,ringsig) If the flag is true, the ring signature is valid. Otherwise it`s invalid. In the Ring Signature scheme, the key image and ring signature cannot be matched with the signer who is among the publickeyset. Anyone can verify whether the signature is valid or not, but no one is able to identify the signer. Figure 4.4: Ring Signature

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 22 4.4.3 Privacy Protection Transaction Flow Alice wants to send some tokens to Carl in the smart contract whose address is SCAddress. Alice`s main account is (A,B) with main private key (a,b). Carl`s main account is (C,D) with the main private key (c,d). Alice has a sub-account Onetime_account1 with the private key sk1 in the smart contract. The transaction flow is as follows: Alice sends a transaction: Step1:Alice generates a one-time account for Carl with his main account: Onetime_account2=OTA_GenerateAccount((C,D)) Step2:Alice generates the signature for the transaction data in the smart contract through Gen- erateSignature( ) with sk1 and makes the final data Payload: sig=GenerateSignature(Onetime_account1,Onetime_account2,value,nonce) Payload=(Onetime_account1,Onetime_account2,value,nonce,sig) Step3:Alice generates the public key set: publickeyset=GeneratePublicKeySet(A) Step4:Alice generates the key image and makes the transaction message m: I=GenerateKeyImage((A,a)) m=(publickeyset,SC_Address,Payload) Step5:Alice generates the ring signature and makes the final transaction data: ringsig=GenerateRingSignature(m,publickeyset,I,a) transaction=(publickeyset,SCAddress,Payload,I,ringsig) Step6:Alice broadcasts transaction on the Wanchain. The Validator verifies a transaction: Step1: The Validator receives transaction and makes the transaction data m to verify the ring signature: m=(publickeyset,SC_Address,Payload) �lag=VerifyRingSignature(m,publickeyset,I,ringsig)

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 23 Step2:If flag is true, the Validator goes to step 3. Otherwise the transaction is invalid and thrown out. Step3: The Validator invokes the smart contract with Payload as a parameter. Then the smart contract verifies the signature in Payload and executes the transfer. After step 3, the transaction is committed on Wanchain. Carl scans the sub-accounts with his scan key and recognizes that Onetime_account2 belongs to himself. Then he gets the private key for Onetime_account2 with his main private key. Therefore, he takes the tokens of Value. 5/ Wanchain Applications 5.1/ Borrowing and Lending increase.Take Ethereum (ETH) for example. A service provider uses a smart contract to As digital currency becomes an important create a deposit application and set the inter- medium of value exchange and a value stor- est rate on Wanchain. A user transfers ETH age carrier, using it to create new value and from the Ethereum blockchain to the corre- generate income is an inevitable trend. For sponding Wanchain smart contract address example, Bitcoin is used to invest in block- through a cross-chain transaction. The chain mining businesses and other ICO proj- deposit on Wanchain releases a correspond- ects. With the increasing number of applica- ing voucher (tokens on Wanchain that are tions for digital currency, direct investment similar to deposit bank receipts) to the user’s opportunities for digital currency have account on Wanchain. The smart contract increased. then automatically calculates the interest. When the user needs to withdraw the depos- People who use digital currencies to create it, the voucher will be transferred back to an value need more digital currencies, and intermediary address, and a cross-chain people who hold digital currencies want to transaction is executed. The ETH corre- increase their value, so the demand for sponding to the voucher is unlocked on the borrowing and lending digital currencies will

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 24 original chain and transferred back to the intermediaries can achieve multi-currency original user’s account. The deposit reserves auction trading and one-to-one curb transac- (the locked assets on the original chain corre- tions via smart contracts. The privacy protec- sponding to the intermediary address) are tion transaction mechanism on Wanchain always transparent. provides support for transactions that require privacy protection. Wanchain allows for importing digital currency into Wanchain, launching private transactions on Wanchain and transferring digital currency back to the 5.2/ Payment and Settle- original chain. To some extent, the privacy ment protection of the original chain is achieved by masking the fund tracking paths. More and more businesses accept digital assets, like Bitcoin, as a means of payment. In the future, there will be more applications in which a variety of digital currencies are used for payments. Currently, there are many 5.4/ Investment and payment methods such as VISA, Paypal and Financing Alipay, each with their own payment proce- dures and settlement processes. Wanchain is There is a trend toward traditional institutions a distributed multi-currency platform, inte- to use consortium chains to hold assets such grating different banking ledgers into one as commercial bills, loyalty points, future unified ledger. Any business or user can earning rights, accounts receivable and so on. install the Wanchain wallet to implement In the future, more financial assets will be multi-currency payments and settlements recorded on distributed ledgers based on without having to install multiple digital consortium chains. When these consortium currency wallets. chains are linked to Wanchain, they become financial asset providers, and the investors can use their digital currencies to buy these assets. As in the traditional banking business, 5.3/ Transaction and Ex- it's akin to buying financial products in a change bank. The difference is that more intermediar- ies can participate and that the asset holders At present, the completion of digital currency can carry out financing directly. exchange depends on centralized exchanges and over-the-counter markets. All transac- An ICO has become an important means of tions are based on trust of the exchanges and financing in the blockchain space, and this intermediaries. After multiple currencies are trend is spreading into non-blockchain areas. integrated with Wanchain, the exchanges or More and more projects, especially the ones

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 25 based on Ethereum, directly use smart In the field of digital currency, banking busi- contracts for ICO, which makes the whole ness, like currency exchange, has been boom- process more transparent and fair. But ICOs ing. Blockchains progress in these fields on that only use Ether cause inconvenience to two parallel tracks, but with the rise of digital investors holding other digital currencies. On assets and their increasing integration into Wanchain, the ICO issuer can issue a smart the real economy, these two tracks will even- contract that supports multi-currency invest- tually intersect. Digital assets will be included ments. More conveniently, investors can in the banks' balance sheets (banks that invest by using Ethereum, Bitcoin or any support the loan and deposit of digital assets) other blockchain tokens integrated with and the banks' balance sheets will be partially Wanchain, and issuers can more easily transferred to blockchains (fiat money is manage their funds. Furthermore, when a represented and accounted by blockchain new blockchain is launched, the conversion tokens). Wanchain’s inter-ledger technolo- between the crowdfunded shares and the gies will support this future integration. native currency can be completed via the Wanchain cross-chain transactions. With Wanchain, we are entering an era of digital right issuance fully based on blockchain. 5.5/ Other Applications The financial applications described above are intended to give readers a better under- standing of the logic and value of Wanchain. From these, we can come up with more examples such as: multi-currency credit cards based on digital currency, asset backed securities that package up a variety of assets, Peer-to-Peer lending businesses based on digital currencies, crowdfunding, and so on. Application of blockchain technology is regarded as an important strategy by major banks, but they are investigating the technol- ogy to transform traditional business.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 26 Conclusion In this paper, we put forth the concept of a the traditional industries. As the proportion of future“bank”.The term“bank”is an analogy digital currency in the economy increases, used to give readers a more intuitive under- new financial industries based digital currency standing of the concept. Abstracting block- will flourish. Of course, given time, traditional chain technology, from the concept of Bitcoin banks will join the digital currency economy in into a neutral technology, greatly improved their own ways and a financial ecosystem inte- the global popularization and application of grating traditional assets with digital assets blockchain, however it still faces huge obsta- will gradually be developed. cles. It’s risky and expensive for traditional banks to solve existing business problems by Wanchain aims to design a new decentralized using blockchains. Decision makers are financial infrastructure, that allows the unlikely and unwilling to take such a big risk exchange of value among different blockchain due to investor return expectations, and for networks. Based on this new model, interme- just one bank to change is not enough. diaries will develop their own financial services and build a distributed super finan- The financial framework based on digital cial market via Wanchain. We believe that a currency is like traditional banking at the busi- flexible, decentralized, value exchange system ness level but is different in its nature and orga- is the future of the financial infrastructure, and nization. This is similar to what occured at the will help to promote financial inclusion and inception of ecommerce, which did not sprout standardize future financial transactions. from traditional industries, but generated new commercial modalities that changed

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 27 References [1] NAKAMOTO.S, Bitcoin: A Peer-to-Peer electronic cash system [2] Ethereum: https://github.com/ethereum/wiki/wiki/White-Paper [3] Stefan.Thomas, Evan.Schwartz, A Protocol for Interledger Payments [4] Jae.Kwon,Ethan.Buchman, A Network of Distributed Ledgers [5] Shamir A. How to share a secret. Communications of the ACM, 1979, 24(11): 612~613 [6] Blakley G.R. Safeguarding cryptographic keys. Proceedings of the National Computer Conference, 1979, American Federation of Information Processing Societies, V.48, 1979:313~317 [7] B. Chor, S. Goldwasser, S. Micali, and B. Awerbuch. Verifiable Secret Sharing and Achieving Simultaneity inthe Presence of Faults. In Proceeding 26th Annual Symposium on the Foundations of Computer Science, IEEE,1985:383~395 [8] Desmedt Y. Society and group oriented cryptography: a new concept Advances in Cryptology-Cryp to’87, 1987:120~127 [9] Ronald L. Rivest, Adi Shamir, and Yael Tauman, How to Leak a Secret: Theory and Applications of Ring Signatures, Springer Berlin Heidelberg, 2006,22(11):164-186 [10]Man Ho Au, Sherman S.M. Chow, Willy Susilo, and Patrick P. Tsang, Short Linkable Ring Signatures Revisited, EuroPKI 2006: Public Key Infrastructure pp101-115 [11]MONERO: Nicolas.van.Saberhagen, CryptoNote v 2.0 [12]Melanie Swan,Blockchain: Blueprint for a New Economy [13]Adam Back, Matt Corallo, Luke Dashjr,Mark Friedenbach, Gregory Maxwell, Andrew Miller, Andrew Poelstra, Jorge Timón, and Pieter Wuille:Enabling Blockchain Innovations with Pegged Sidechains [14]Stefan Thomas & Evan Schwartz: A Protocol for Interledger Payments [15]Paul Vigna & Michael J. Casey: Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 28 Appendix: Glossary of Terms Chain ID: The chain identifier in Wanchain’s registry. OriChainID is used to mark the original chain in transactions. Cross-Chain Transaction: An asset transfer between two different blockchains (which means transfer-in or -out of the original chain.) When an asset on one chain is transferred to another chain, the total amount of the assets in the two ledgers stays unchanged, which will not cause any inflation or deflation. Homogeneous Chain: Either a public or private chain developed based on Wanchain, which contains the same cross-chain protocol and asset cross-chain mapping methods, and can be inte- grated with Wanchain seamlessly for two-way asset transfers. Inclusive Finance: Providing affordable financial services to disadvantaged and low-income segments of society. ICO(Initial Coin Offering): An initial coin offering (ICO) is a means of crowdfunding the release of a new cryptocurrency. Generally, tokens for the new cryptocurrency are sold to raise money for technical development before the cryptocurrency is released. Unlike an initial public offering (IPO), acquisition of the tokens does not grant ownership in the company developing the new cryptocurrency. Locked Account: The account to lock the assets transferred out of the chain. Mapping Token (MT): The tokens on Wanchain corresponding to the original assets. OriAccount: The account for the original chain that initiated the cross-chain transactions. For example, the OriAccount of Alice is written as OriAccount(Alice). Private Chain: A blockchain network with limited openness and decentralization compared with a public chain, where authorization under specific rules is required for a new node to join the network. Public Chain: A blockchain network fully open and decentralized, where any participants can join the network if they follow the protocol of the public chain.

WANCHAIN WHITEPAPER >> WANCHAIN FOUNDATION LTD 29 Storeman: A Wanchain node that holds the key shares of locked accounts, uses the key shares to generate signature shares and combine them into complete signatures, and carries out other oper- ations on locked accounts. Token Locked Flag (TLF): During the process of asset locking, Wanchain nodes verify the transac- tion OriTx on the original chain and broadcasts the TLF consensus results to other nodes. Token Unlocked Flag (TUF): During the process of asset unlocking, Wanchain nodes verify the transaction OriTx on the original chain and broadcasts the TUF consensus results to other nodes. Validator: The blockchain node used in packaging and verifying the transactions. Wanchain’ s verifica- tion nodes are divided into three categories: the general verification nodes (Validators), the cross-chain transaction proof nodes (Vouchers), and the locked account management nodes (Storemen). Voucher: A Wanchain verification node that is responsible for verifying whether the assets on the original chain are locked or unlocked for cross-chain transactions. WAN Account: An account maintained by Wanchain’s Validators to initiate transactions on Wan- chain and deploy or call smart contracts. Wanchain: A public blockchain referred to in this white paper, including distributed ledger, smart contract, cross-chain protocol and other contents, which can achieve the cross-chain transactions, privacy protection for token transactions and other functions. Wanchain Cross-Chain Protocol: The communication specifications for Wanchain cross-chain transactions (WIP for short), which includes Wanchain Cross-Chain Transaction Requests (WITx- Req), Token Locked Flag (TLF), Token Unlocked Flag (TUF) and Mapping Token (MT): Wanchain Cross-Chain Transaction Request (WITxReq): A package of information, which includes two parts - the Cross-Chain Transaction Request (InterTxReq) and the Origin Chain Trans- action (OriTx). If the original chain is“BTC”, then it will be written as OriTx(BTC). If the original chain is the Wanchain, then it will be written as OriTx(WAN). For the public chain, OriTx is struc- tured as the public chain transaction data format, and the wallet uses OriTx to initiate the asset transfer to Wanchain’s locked account on the original chain. Wanchain and the homogeneous chain can construct a transaction UnlockedOriTx in accordance with the original chain transaction data format. An OriTx is used to lock the original chain assets. An UnlockedOriTx is used to unlock the original chain assets.

Contributors:Jack Lu, Boris Yang, Zane Liang , Ying Zhang, Demmon, Shi, Eric Swartz, Lizzie Lu Reviewers:Dustin Byington, David A. Johnston, Michael Y., James Shen , Feng Han、,Albert Ching wanchain.org [email protected] © WANCHAIN FOUNDATION LTD 2017 all rights reserved