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Offshift Ecosystem Whitepaper.md

+# The Offshift Ecosystem Whitepaper
+*An On-Chain Ecosystem For Layer 1 Private DeFi Applications*
+
+*NOTE: The Offshift Ecosystem Whitepaper is a living document whose contents may be modifed by Offshift Core in response to ongoing research.*
+
+## Table of Contents
+
+   **I.** 	[Abstract](#i.-abstract)
+  **II.** 	[Introduction: Market Analysis](#ii.-introduction:-market-analysis)
+ **III.** 	[PriFi (Private Decentralized Finance) and the PriFi Standard](#iii.-prifi-and-the-prifi-standard)
+ **IV.** 	[Ecosystem Features and Dynamics](#iv.-ecosystem-features-and-dynamics)
+				A. [On-Chain Privacy Solutions](#a.-on-chain-privacy-solutions)
+				B. [Chainlink Oracles for On-Chain Asset Diversity](#b.-chainlink-oracles-for-on-chain-asset-diversity)
+				C. [Seamless Shifting to Replace Collateral Management](#c.-seamless-shifting-to-replace-collateral-management)
+				D. [Hardcoded Integrity](#d.-hardcoded-integrity)
+   **V.** 	[Platform Tokenomics: Utility and Incentives](#v.-platform-tokenomics:-utility-and-incentives)
+				A. [Shifting with the Burn-and-Mint Mechanism](#a.-shifting-with-the-burn-and-mint-mechanism)
+				B. [Reward Incentives: Staking Rewards](#b.-reward-incentives:-staking-rewards) 
+  **VI.** 	[Fundraising Model and Token Metrics](#vi.-fundraising-model-&-token-metrics)
+				A. [Capital Raise](#a.-capital-raise)
+				B. [Token Allocations](#b.-token-allocations)
+				C. [High-Integrity Tokenomic Measures](#c.-high-integrity-tokenomic-measures)
+				D. [Token Emission Schedule](#d.-token-emission-schedule)
+ **VII.** 	[Long-Term Vision: A Privacy-Centric DeFi Ecosystem](#vii.-long-term-vision:-a-privacy-centric-defi-ecosystem)
+**VIII.** 	[Resources](#viii.-resources)
+  **IX.** 	[Disclaimer](#ix.-disclaimer) 
+
+
+
+
+
+# I. Abstract
+
+Within the crypto space, the 2020s have quickly proven to be the decade of DeFi (Decentralized Finance). However, growing interest in DeFi has relegated cryptocurrency’s privacy-centric origins to the sidelines. Users now must choose between cutting-edge platforms designed to maximize yields and standalone privacy applications whose infrastructure and assets permit limited integration potential in other protocols, thereby limiting yield generation. Others still incorporate elements of centralization by relying on rollups and other Layer 2s for obfuscation and off-chain computation. In short, protecting privacy now comes at the expense of either putting capital to work, or critical infrastructure components that are needed to support decentralized systems. There exists substantial, untapped demand in Ethereum’s DeFi ecosystem for a technology solution that eliminates the financial tradeoffs between privacy and DeFi while remaining true to cryptocurrency’s founding principle of decentralization.
+
+The Offshift Ecosystem is a fully on-chain, non-custodial platform designed to provide protections for user privacy without compromising yield potential or decentralization. The Offshift Ecosystem is developed by Offshift Core, the ecosystem's core development team, and powered by XFT, a public ERC20 token that confers access to ecosystem applications via Burn-and-Mint Tokenomics. Users interact with applications through a process called Shifting, whereby XFT is burned to mint synthetics in various protocols, and vice versa.
+
+
+
+
+
+# II. Introduction: Market Analysis
+
+Offshift Core developed the Offshift Ecosystem in response to four key market trends.
+
+#### 1. The Decade of DeFi
+
+The recent emergence of the DeFi has allowed the crypto space to retain capital and drive further innovation. From decentralized lending and borrowing services to synthetic asset minting, DeFi applications offer users an endless stream of opportunities to leverage the liquidity vested in their otherwise dormant crypto-assets, and of course, to earn yields. Simply put, DeFi allows individuals to earn steady income on their assets without transferring their capital back to traditional financial instruments.
+
+#### 2. Emerging Authoritarian Initiatives
+
+As cryptocurrencies have enjoyed newfound popularity in the mainstream, so too have they drawn increased attention from governments and regulatory agencies. Many authorities have expressed clear intentions to integrate cryptocurrency frameworks into existing financial infrastructure where users can be surveilled and identified via mandatory Know-Your-Client (KYC) implementations. Despite significant resistance, authoritarianism is gaining momentum throughout much of the world, and efforts to surveil, limit, and even censor cryptocurrency transactions are only just beginning to surface.
+
+#### 3. Siloed Privacy Technologies
+
+Many projects and cryptography specialists remain dedicated to the prerogative of personal privacy. However, their most robust privacy solutions comprise standalone blockchains whose native assets confer privacy as an exclusive feature.
+
+#### 4. Infrastructural Limitations
+
+In the mission to produce a robust, private DeFi platform, development teams are hardly to blame. At present, Ethereum and EVM-compatible blockchains simply do not have the infrastructural capacity to support the computationally intensive cryptography required to implement on-chain confidential assets. Even with many iterations of optimization, fitting the necessary cryptographic proofs within Ethereum’s single-block gas limit remains an arduous task. It is for this reason that many purported on-chain private DeFi platforms compromise on decentralization, and instead rely on rollups and other Layer 2 solutions to conduct obfuscation and computation. While many scalability solutions likely lie on the horizon, providing comprehensive on-chain privacy in 2022 might well be likened to sending a high-definition video via email in 1999: application potential is limited by infrastructure capability. In addition to existing infrastructure, prominent DeFi applications are less than prepared to integrate confidential assets, and gas fees involved in smart contract integrations impose limitations on composability.
+
+
+
+
+
+# III. PriFi and the PriFi Standard
+
+Since its explosion in 2020, the DeFi umbrella has expanded convincingly over the landscape of cryptocurrency, attracting investors and enthusiasts whose preferences speak for themselves: **the systemic benefits of privacy and decentralization are undeniable, but the immediate, individual benefits of yield generation are irresistable.** In the current of ever-expanding trade-offs that individuals must forfeit in order to retain privacy, DeFi yields have finally tipped the scales in favor of public exposure. Nonetheless, there remains substantial, untapped demand in Ethereum’s DeFi ecosystem for an ecosystem that eliminates the financial trad-eoffs between privacy and DeFi.
+
+In the remainder of this paper, we define the Offshift Ecosystem and its native applications as composing an emergent sector called PriFi (Private Decentralized Finance). To earn the PriFi classification, applications and the synthetic assets they generate must adhere to the PriFi Standard by:
+
+1) Supporting truly decentralized financial tools.
+
+2) Conferring robust privacy, anonymity, and/or confidentiality to users and/or assets.
+
+3) Originating and remaining fully on Layer 1.
+
+
+
+
+
+# IV. Ecosystem Features and Dynamics
+
+Offshift Ecosystem features and dynamics are presented in detail below.
+
+
+
+## A. On-Chain Privacy Solutions
+
+PriFi Applications in the Offshift Ecosystem may utilize one or a combination of different privacy-centric technologies in order to confer privacy, anonymity, and/or confidentiality to users and/or assets. Offshift Core will both develop original PriFi Applications and provide relevant research, development resources, and privacy to development teams committed to supplementing the Offshift Ecosystem with additional PriFi Applications. Leading privacy solutions include but are not limited to:
+
+- Zero-knowledge (zk) Proofs
+
+- Differential Privacy
+
+- Anonymizers
+
+- Homomorphic Encryption
+
+- Synthetic Data Generation
+
+- Federated Learning
+
+  
+
+## B. Chainlink Oracles for On-Chain Asset Diversity
+
+In order to support a trustless user experience, Offshift sources accurate price feeds to calculate exchange rates across assets using Chainlink’s industry-leading distributed oracle network. Chainlink oracles provide robust, real time price feeds to support a wide range of synthetics in Offshift Ecosystem PriFi Applications. As such, the Offshift Ecosystem is fully capable of supporting tradeable synthetics that mirror not only cryptocurrencies and fiat currencies, but publicly traded assets, gold, silver, and other commodities as well. In full, the Offshift Ecosystem aims to host the world’s most versatile, privacy-centric, and decentralized financial landscape.
+
+More information on Offshift Core’s collaboration with Chainlink is available in our September 30, 2020 Blog post.[^ref1]
+
+
+
+## C. Seamless Shifting to Replace Collateral Management
+
+Unlike other synthetic asset platforms, PriFi Applications in the Offshift Ecosystem do not impose excessive collateral requirements of any kind. Over-collateralization is an outdated mechanism that is not capital-efficient. In addition, collateral pools require custodial services that present attack vectors, whereas Offshift Ecosystem PriFi applications function without dependency on collateral pools or custodianship of any kind.
+
+With Offshift’s signature **Burn-and-Mint Mechanism** and XFT’s elastic supply model, users are afforded a seamless trading experience void of slippage and related liquidity risks. When users burn XFT to mint synthetics, they never have to worry about margin calls, liquidations, or periodic fees to maintain their positions. In reverse, users may burn their synthetics to mint XFT at any time.
+
+
+
+## D. Hardcoded Integrity
+
+As an organization in a nascent, decentralized industry, Offshift Core acknowledges and respects the challenges users and community members face in vetting projects for dishonest practice, exploitative tokenomic models, and outright deceit. We further acknowledge that, although the choice of some of our team members to remain anonymous aligns with the broader principles of our organization, we owe it to our community and everyone exploring the Offshift Ecosystem to take all necessary measures to ensure the ethical, high-integrity operation of the platform. In our commitment to integrity, we have employed a strategic vesting model, lockboxes for on-chain reserves (see [VI. C 2](#2.-lockboxes-for-on-chain-reserves)), and liquidity locks (see [VI. C 3](#3.-liquidity-locks)).
+
+
+
+
+
+# V. Platform Tokenomics: Utility and Incentives
+
+Offshift Ecosystem Tokenomics and Incentives are described in detail below.
+
+
+
+## A. Shifting with the Burn-and-Mint Mechanism
+
+To mint synthetics in the Offshift Ecosystem, users select and open a PriFi Application, and connect an ERC20 wallet. If a user possesses a positive XFT balance and sufficient ETH to cover gas fees, he/she may conduct a **Shift** and enter the Offshift Ecosystem’s private (anonymous and/or confidential) side via the Burn-and-Mint Mechanism.
+
+The **Burn-and-Mint Mechanism** burns the user’s XFT and mints one or more synthetics of equal value. At any point, a user may **Shift** back from his/her synthetics into XFT, and the process reverses: the **Burn-and-Mint Mechanism** burns the synthetics, and mints new XFT of equal value to the user’s designated ERC20 wallet address. Such a model enables users to mint, store, and exchange synthetics free from collateral requirements and the margin calls and liquidations that come with them, making for a cost-efficient and stress-free trading experience. It should be noted that although such a tokenomic model demands an elastic supply model for XFT, it does not imply or require any propensity toward long-term inflationary or deflationary monetary attributes.
+
+
+
+## B. Reward Incentives: Staking Rewards
+
+In addition to providing technical support and advisory, Offshift Core will support Offshift Ecosystem PriFi Applications with native staking features. Offshift Core has allocated 15% of the Genesis Total Supply (1,500,000 XFT) to its Staking Rewards Wallet (see [VI C 1](#1.-strategic-vesting-model)).
+
+
+
+
+
+# VI. Fundraising Model & Token Metrics
+
+The Offshift Ecosystem’s Fundraising Model and Token Metrics are presented in detail below.
+
+
+
+## A. Capital Raise
+
+Offshift raised capital through one round of seed investment and one round of private investment. In the interests of decentralizing token ownership, individual investment contributions were capped at $5,000 in USD-equivalents in both rounds.
+
+
+
+## B. Token Allocations
+
+From  the Genesis Total Supply of 10,000,000 XFT:
+
+- 1,500,000 XFT were sold between the seed and private investment rounds. 
+
+- 250,000 XFT were deployed in the Uniswap liquidity pool. [^fn1]
+
+- 1,750,000 XFT comprised the Circulating Supply as of our August 3, 2020 Uniswap launch.
+
+- The remaining XFT allocations are illustrated in the graphics below.
+
+  
+
+<img align="left" src="001.png">
+
+
+
+<img align="left" src="002.png">
+
+
+
+## C. High-Integrity Tokenomic Measures
+
+In honor of our commitment to a high-integrity development process, full transparency, and a long-term project vision, we have taken substantial measures to ensure that all token allocations outside of our initial circulating supply will never serve as a source of undue or excessive inflation at any stage in our development lifecycle. Attending to this prerogative, we have taken the following measures:
+
+
+
+#### 1. Strategic Vesting Model
+
+We have established gradual, long-term vesting periods for our Marketing/Ecosystem, Development, and Team wallets, as well as for our designated Staking Rewards wallet. Wallet-specific vesting parameters are available below:[^fn2]
+
+- Marketing/Ecosystem (22.5%): 1.25% every 2 months, beginning Oct. 3, 2020
+
+- Development (22.5%): 1.25% every 2 months, beginning Oct. 3, 2020
+
+- Team (20%): 1% every 2 months, beginning Feb. 3, 2021
+
+- Staking Rewards (15%): 0.25% every month, beginning Feb. 3, 2021
+
+  
+
+#### 2. Lockboxes for On-chain Reserves
+
+To ensure that even our core team cannot modify our token metrics or vesting strategy, we have hardcoded our vesting model using Time Lock smart contracts that unlock tokens in tranches congruent with the vesting model described above. 
+
+Source code for the Development/Ecosystem Time Lock contract[^ref2], Marketing Time Lock contract[^ref3], Team Time Lock contract[^ref4] and Staking Rewards Time Lock contract[^ref5] is verified and viewable on Etherscan, and each contract URL is linked in the references section of this document.
+
+
+
+#### 3. Liquidity Locks
+
+In addition to our Time Lock contracts for on-chain reserves, we also employ a Time Lock contract for the initial Uniswap liquidity provided by Offshift Core. Source code for the Uniswap LP Token Time Lock contract[^ref6] is verified and viewable on Etherscan, and the contract URL is linked in the references section of this document.
+
+
+
+## D. Token Emission Schedule
+
+In accordance with our Vesting Model, the Genesis Total Supply of 10,000,000 XFT will be gradually released into the Circulating Supply over the course of 5 years and 5 months via the following Token Emission Schedule.
+
+
+
+<img align="left"  src="003.png">
+
+
+
+
+
+
+# VII. Long-term Vision: A Privacy-Centric DeFi Ecosystem
+
+At Offshift Core, our ultimate vision encompasses the formation of a scalable, privacy-centric DeFi ecosystem composed of a diverse range of disruptive platforms and applications. We are pioneers playing a decisive visionary role in the development of cryptocurrency’s next major growth catalyst: the #PriFi landscape.
+
+In the years ahead, we envisage the organic formation of a robust ecosystem whose applications enable users to engage in decentralized lending and borrowing, various forms of yield farming, the formation and exchange of insurance products, NFT generation, and much more – all while remaining fully anonymous, exchanging confidential on-chain assets, and protecting their privacy. XFT will anchor and connect PriFi applications, catalyzing public-private capital flows and acting as a low-friction channel for users entering from and exiting to the public side.
+
+
+
+
+
+# VIII. Resources
+
+The Offshift team and community are active and can be reached on the following platforms:
+
+- **[Website](https://offshift.io)**
+- **[Telegram](https://t.me/OffshiftXFT)**
+- **[Twitter](https://twitter.com/OffshiftXFT)**
+- **[YouTube](https://youtube.com/c/OffshiftXFT)**
+- **[GitLab](https://open.offshift.io)**
+- **[Bitcointalk](https://bitcointalk.org/index.php?topic=5262262)**
+
+
+
+
+
+# IX. Disclaimer
+
+The purchase of XFT tokens involves substantial risk and may lead to partial or complete losses. Purchasers should carefully assess and knowingly accept all relevant risks. XFT tokens should only be purchased after developing a full understanding of the nature and functionality of XFT tokens and the Offshift protocol. Offshift intends to operate within the parameters of the law and is not to be used as part of any regulatory or statutory violation. Any purchase of XFT constitutes an agreement that the purchaser accepts full responsibility for the manner and means of use and relieves Offshift of any civil or criminal liability. 
+
+This whitepaper does not constitute investment advice, legal advice, financial advice, trading advice, or any recommendation of any kind, and Offshift makes no representation that purchasers of XFT can or should expect any profit or return on their purchase based on the efforts of Offshift or a third party. XFT is not a security or any other investment device and should not be treated as such. The development, timeline, and roll-out of the initiatives described in this whitepaper are not guaranteed. DYOR.
+
+
+
+
+
+---
+
+##### Footnotes
+
+[^fn1]: A total of 500,000 XFT were initially reserved for liquidity provision, but only 250,000 XFT were deployed in the Uniswap liquidity pool. The remaining liquidity reserves of 250,000 XFT remain locked on-chain, and will be allocated appropriated as follows, pending the discretion of the Offshift community: Distributed to platform users in the future as part of an LP rewards program; Burned in their entirety; Some combination of these options.
+
+[^fn2]: All percentage (%) figures express a nominal amount of XFT tokens relative to the Total Genesis Supply of XFT on a percentage basis.
+
+
+
+---
+
+##### References
+
+[^ref1]: [Offshift Taps Chainlink to Provide Oracle Feeds](https://offshift.io/public/blog/2020-09-30-offshift-taps-chainlink-to-provide-oracle-feeds-for-its-zkasset-private-pegs/)
+
+[^ref2]: [Development/Ecosystem Time Lock Contract](https://etherscan.io/address/0xcff782dbb92f187aa3df6823c8e690c4f128ef41#code)
+
+[^ref3]: [Marketing Time Lock Contract](https://etherscan.io/address/0x7c06d60ba831ab7fbc95b2ded49610843b02e643#code)
+
+[^ref4]: [Team Time Lock Contract](https://etherscan.io/address/0xf7d71d20fa1aa53c07eb8b1b671ea3553c90ff98#code)
+
+[^ref5]: [Staking Rewards Time Lock Contract](https://etherscan.io/address/0xf7d71d20fa1aa53c07eb8b1b671ea3553c90ff98#code)
+
+[^ref6]: [Uniswap LP Token Time Lock Contract](https://etherscan.io/address/0x136d9c2766665129b5a7cddcc10896598c3f41b6#code)

Offshift anon Litepaper.md

+# Offshift anon Litepaper
+
+*An On-Chain Synthetics Platform for Anonymous Yield Generation*
+
+*NOTE: The Offshift anon Litepaper is a living document whose contents may be modifed by Offshift Core in response to ongoing research.*
+
+## Table of Contents
+
+  **I.**	[Abstract](#i.-abstract)
+
+ **II.**	[Value Proposition: Offshift](#ii.-value-proposition:-offshift)
+
+**III.**	[Platform Features and Dynamics](#iii.-protocol-features-and-dynamics)
+
+​			A. [Capital Dynamics](#a.-capital-dynamics)
+
+​			B. [Shifting Circuit](#b.-shifting-circuit)
+
+ **IV.**	[Platform Tokenomics: Utility and Incentives](#iv.-platform-tokenomics:-utility-and-incentives)
+
+​			A. [Shifting with the Burn-and-Mint Mechanism](#a.-shifting-with-the-burn-and-mint-mechanism)
+
+​			B. [Marketing Making via LP Rewards](#b.-marketing-making-via-lp-rewards)
+
+​			C. [Price Parity via Flex Fee](#c.-price-parity-via-flex-fee)
+
+  **V.**	[Disclaimer](#v.-disclaimer)
+
+
+
+
+
+
+# I. Abstract
+
+DeFi protocols provide users opportunities to generate yields on their assets in exchange for providing liquidity. DeFi platforms operate predominantly on the Ethereum public blockchain, and provide little to no considerations for user privacy. As such, there exists substantial, untapped demand in the Ethereum DeFi ecosystem for a platform that eliminates the financial trade-offs between privacy and DeFi.
+
+Offshift anon is a fully on-chain, non-custodial platform designed to provide protections for user privacy without compromising yield potential. On Offshift anon, users burn XFT to mint on-chain synthetics called anonAssets via a tokenomic process called Shifting. Shifting dissociates users from their XFT, and thereby renders users anonymous with respect to their freshly minted anonAssets. As standard, public ERC20 tokens, anonAssets introduce no novel barriers to feature implementation or platform integration in the Ethereum ecosystem, and therefore eliminate yield-related tradeoffs associated with privacy.
+
+
+
+
+
+# II. Value Proposition: Offshift anon
+
+**Offshift anon dissolves the existing tradeoffs between privacy and yield generation by dissociating users from their assets via the Mint-and-Burn Tokenomics native to the Offshift Ecosystem.** On Offshift anon, users burn XFT in order to become anonymous owners of the anonAssets they mint. Users may subsequently begin exploring opportunities to engage DeFi applications with their anonAssets while remaining fully anonymous. Essentially, Offshift enables individuals to anonymize their crypto positions, so they can both invest in the technologies they support and generate yields without the drawbacks related to exposure and public profiling.
+
+
+
+
+
+# III. Protocol Features and Dynamics
+
+
+
+## A. Capital Dynamics
+
+On Offshift anon, users may perform three different capital transfers.
+
+|1. From XFT to anonAssets|
+| :- |
+|**2. From anonAssets to anonAssets**|
+|**3. From anonAssets to XFT**|
+
+Offshift also facilitates two different Shifting types.
+
+#### 1. Anonymizing Shift (anonShift)
+
+An Anonymizing Shift, (herein referred to as an anonShift) both (a) dissociates sender of funds from receiver of funds, and (b) may change the form in which the Shifted value is stored. An anonShift with input XFT will always output one of several anonAssets. An anonShift with input anonAsset will always output one of several anonAssets, whether the same as or different to corresponding input.
+
+#### 2. Simple Shift
+
+A Simple Shift is transparent and confers no anonymity; it simply shifts value from one asset type to another. A Simple Shift with input (a) anonAsset or (b) XFT will always output XFT. A Simple Shift is less computationally intensive than an anonShift, and thus cheaper and more conducive to arbitrage operations that support price parity for anonAssets in public markets.
+
+
+
+---
+
+
+||**Anonymizing Shift**|**Simple Shift**|
+| :-- | :-: | :-: |
+|**XFT to anonAssets**|**X**|**\***|
+|**anonAssets to anonAssets**|**X**|**–**|
+|**anonAssets to XFT**|**–**|**X**|
+
+**Simple Shifts are only activated in response to conditions whereupon one or more anonAssets exceed price parity due to incremental buy-side pressure. Under these circumstances, Offshift anon's Simple Shifts allow arbitrageurs to restore price parity efficiently by Shifting from XFT to anonAssets at the lowest cost possible. When price parity is restored, the Offshift anon protocol deactivates Simple Shifts.*
+
+---
+
+
+
+
+## B. Shifting Circuit
+
+In executing an anonShift, Offshift’s Shifting Circuit functions as follows.
+
+
+
+#### 1. Fetch Price Feed
+
+As a prerequisite to beginning an anonShift, a user must hold and approve an amount of the input asset (XFT or anonAsset) that is greater than or equal to the output amount specified in the deposit contract. Since the input and output are different assets, a price feed is fetched to ensure a depositor has a sufficient balance. If so, the user must then grant the spender (the deposit contract) an allowance of the input asset greater than or equal to the required input amount.
+
+
+
+#### 2. Generate Secret
+
+On the client-side, two 31-byte integers are generated pseudorandomly. One integer is the secret value that will be committed, and the other is a nullifier value that prevents attackers from using the committed secret value to generate fraudulent proofs, as well as double spends on deposits. Together, these concatenated integers (nullifier + secret) create what is called the "preimage" of the commitment.[^1]
+
+
+
+#### 3. Commit Secret and Nullifier
+
+Once the secret and nullifier values are generated and the commitment preimage is formed, it is converted from a 62-byte integer value into a Pedersen hash. In other words, the commitment preimage is mapped to a point (X, Y) on the Baby Jubjub elliptic curve.[^2] This point (X, Y) is subsequently encoded as a 32-byte big-endian integer.
+
+
+
+#### 4. Insert Deposit into Merkle Tree
+
+Now that the secret and nullifier have been Pedersen-hashed into a point on the Baby Jubjub elliptic curve and encoded into a 32-byte big-endian integer, the integer is MiMC[^3]-hashed and inserted into a Merkle tree[^4] of height 20 (a tree with 2^20 leaves) for efficient storage and lookup. For the purposes of our zero-knowledge proof, this storage structure provides an efficient method for proving the existence of a valid deposit without revealing its corresponding Pedersen hash.
+
+In addition to inserting the MiMC hash into the deposit Merkle tree, a price feed is fetched for the output asset, and a corresponding amount of the input asset is burned by calling the burn function in the input asset contract. For example, 100 USD worth of XFT is burned for a 100 anonUSD anonymity set. 
+
+Note: While the output amount of the deposit contract is fixed, the amount of XFT needed to enter the anonymity set is variable, and is determined by the price feed.
+
+Note: As the deposit count increases for a given anonAsset denomination, it becomes increasingly difficult for an adversary to determine which deposit corresponds to a given withdrawal. In other words, the longer a specific deposit remains in the anonymity set, the less likely it is to be linked to a specific commitment redemption.
+
+
+
+#### 5. Withdraw and Mint anonAsset
+
+To redeem a committed deposit and mint the denominated anonAsset, a user must provide a valid zero-knowledge proof to the on-chain verifier contract, and verify that a given nullifier has not been previously spent. To do so, the withdrawing party must provide the following inputs:
+
+- **Public Inputs:** A recent root of the Merkle deposit tree, and a Pedersen hash of the nullifier component computed before deposit.
+- **Private Inputs:** The nullifier integer (generated in step 1), secret integer (generated in step 1), and node labels and path to the root provided in the public input.
+
+The zero-knowledge[^5] proof generation is carried out as follows.[^6]
+
+The "witness" for the SNARK is computed by running the preimage of the commitment (nullifier + secret) through a circuit component that computes the Pedersen hash of the preimage, as well as the Pedersen hash of the nullifier. The circuit then asserts the equality of the hashed nullifier against the one provided as a public input.
+
+The circuit then asserts that the provided commitment hash is in fact under the provided Merkle root. To begin, the circuit takes as input the following values: the MiMC hash of the committed value, the MiMC hash of the value adjacent to the commitment, and a direction selector for the user's value (0 for left, 1 for right). The circuit computes the hash of the two inputs, and then iterates the process for each level of the tree with the provided path elements and direction selectors. If the computed Merkle root matches the one provided as public input, the process is completed and the deposit is validated.
+
+To complete the withdrawal, the verifier contract asserts that the provided Merkle root is within the 100-root historical record and the result of the verifier, and that the provided nullifier hash has not previously been spent. If these three conditions are met, then the denominated anonAsset is minted to the provided recipient address, thus completing the deposit/withdrawal process.
+
+
+
+
+
+# IV. Platform Tokenomics: Utility and Incentives
+
+Offshift anon’s platform tokenomics incorporate various tools and incentives to ensure both robust price parity and adequate public market liquidity for anonAssets.
+
+
+
+## A. Shifting with the Burn-and-Mint Mechanism
+
+Like all PriFi Applications in the Offshift Ecosystem, Offshift anon employs Burn-and-Mint Tokenomics to facilitate seamless capital flows between XFT and anonAssets.
+
+The **Burn-and-Mint Mechanism** burns a user’s XFT and mints an anonAsset of equal value. At any point, a user may also **Shift** from an anonAsset back into XFT, and the process reverses: the **Burn-and-Mint Mechanism** burns the anonAsset, and mints new XFT of equal value to the user’s designated ERC20 wallet address. Via the Burn-and-Mint Mechanism, users may also Shift between different anonAssets, or Shift into the same anonAsset for the purposes of achieving anonymity. Such a model enables users to mint, store, and exchange anonAssets free from collateral requirements and the margin calls and liquidations that come with them, making for a simplified and cost-efficient trading experience. It should be noted that although such a tokenomic model demands an elastic supply model for XFT, it does not imply or require any propensity toward long-term inflationary or deflationary monetary attributes.
+
+
+
+## B. Marketing Making via LP Rewards
+
+As fully composable, standard ERC20 tokens, anonAssets can be Shifted through Offshift’s Shifting Circuit, and may be integrated into various Ethereum DeFi applications as well. To support demand for anonAssets in public markets, Offshift Core will deploy XFT from the Offshift Ecosystem's Staking Rewards Wallet to incentivize LPs and ensure adequate liquidity levels. Quantitative metrics will be announced at the proper juncture.
+
+
+
+## C. Price Parity via Flex Fee
+
+In order to support price parity, Offshift anon employs simple mechanics to stabilize anonAssets. 
+
+In the event anonAssets exceed price parity due to incremental buy-side pressure, Offshift anon’s Simple Shifts allow arbitrageurs to restore price parity efficiently by Shifting from XFT to anonAssets at the lowest cost possible.
+
+In the event a designated anonAsset falls to 2.5% below price parity due to incremental sell-side pressure, Offshift’s protocol triggers a variable Flex Fee on Shifts from the anonAsset to XFT. The Flex Fee varies in direct proportion to the anonAsset’s discount to par value, and remains in effect until the anonAsset returns to less than 2.5% below price parity.
+
+
+
+
+
+# V. Disclaimer
+
+XFT tokens should only be purchased after developing a full understanding of the nature and functionality of the tokens, the risk of potential loss, and the protocol on which XFT operates. Offshift intends to operate within the law and is not to be used as part of any regulatory or statutory violation. Consult a professional for legal or financial advice.
+
+
+
+
+
+---
+
+##### References
+
+[^1]: https://en.wikipedia.org/wiki/Image_(mathematics)
+
+[^2]: https://eips.ethereum.org/EIPS/eip-2494 
+
+[^3]: https://byt3bit.github.io/primesym/
+
+[^4]: https://patents.google.com/patent/US4309569
+
+[^5]: http://www.zeroknowledgeblog.com/index.php/groth16
+
+[^6]: https://eprint.iacr.org/2016/260.pdf