What is Mixin?
From its humble beginnings as an obscure digital currency, Bitcoin has grown to become a financial behemoth worth billions of dollars. However, the currency's exponential rise in popularity has not come without its challenges, particularly related to scalability.
As more and more users flock to the network, Bitcoin's ability to process transactions has become severely constrained, resulting in slow confirmation times and exorbitant transaction fees. These limitations have motivated developers and entrepreneurs to explore alternative ways to scale blockchains and improve their performance.
One of the earliest projects to tackle the issue of blockchain scalability was the Mixin Network. Launched in 2017, Mixin Network was among the first cohort of projects to address Bitcoin's scaling limitations by creating a fast, secure, and decentralized platform for transferring crypto assets. Mixin Network's unique directed acyclic graph (DAG) consensus mechanism enables fast and secure transactions and supports multiple cryptos, making it an attractive option for the average user.
Mixin believes they have figured out scaling using the DAG consensus. Unlike traditional blockchain networks that use a linear, chronological structure to record transactions, DAG-based networks use a more complex graph structure, or a “gossip protocol.” This structure allows multiple transactions to be confirmed simultaneously, enabling faster transaction times and improving the overall scalability of the network.
The protocol relies on external nodes to process transactions, making it resilient against malicious actors. As extra layer of security, the network has tens of thousands of light nodes to prevent full nodes from going rogue.
Mixin is a sovereign blockchain that has the same functionalities as Ethereum – it even has its own Mixin Virtual Machine. At a closer look, the architecture of Mixin brings it closer to Polkadot. The protocol supports dapps from different chains i.e Bitcoin, Monero, Litecoin, that become secured by the Mixin Network. In a nutshell, Mixin Network can connect to any blockchain and enable interoperability between dapps.
Just like Ethereum, Mixin Network has its own gas token, called XIN. Its main utility is to secure the network and act as an incentive to run nodes. Different APIs in Mixin’s network, utilize XIN as a resource and consume it according to their tasks. Moreover, when you will create a Dapp on Mixin’s network, it will require some XIN. The value of XIN is tightly correlated to the protocol usage.
To this day, Mixin Network has never been hacked. Unlike DeFi protocols, Mixin Network isn’t governed by a DAO. The protocol is upgraded by the core team upon consulting with the wider community. Another factor is the ability to run light nodes by pledging as little as 0.1 XIN. Despite its limited number of full nodes (50), Mixin Network is able to stay secure with the supervision of tens of thousands of light nodes. Anyone can participate in Mixin Network without having to go through KYC.
How does Mixin work?
Mixin network can best be described as a combination of multiple scaling techniques into one cohesive protocol. Mixin started from solving the scalability issues around Bitcoin and then evolved into a protocol that blends sharding with graph architecture.
The simplest way to explain Mixin Network is by envisioning the protocol as an onion with three layers: Kernel, Domain, and Domain Extension.
Mixin Kernel
First off, what is a kernel? In computing, a kernel is the central component of an operating system. It acts as a bridge between applications and the hardware of a computer system. Similarly, the Mixin Kernel is is a simple distributed ledger which handles only basic UTXO transactions, not even smart or stupid contracts.
Mixin Kernel is designed to be highly scalable, meaning it can handle large transaction volumes without slowing down or congesting the network. This is achieved through the use of sharding, which enables the network to divide transactions into smaller, more manageable chunks that can be processed simultaneously by different nodes.
Mixin Domain
The Mixin network consists of many supporting ledgers called “domains” and “domain extensions.” You can think of them as parachains that connect and derive their security from the Mixin Kernel.
Domains act as a gateway for assets like Bitcoin, Ethereum, other networks. As the amount of assets increases, there will be multiple domains to decentralize the management of assets. The existing Domain is managed by the Mixin team with 50,000 XIN pledged.
It is important to mention that the Domain does not have the complete private key of an on-chain asset (such as the Bitcoin private key). The private key is kept by nodes and the Domain through key sharding technology. Key shards have multiple backups, so the key will not be lost even some of the backups are lost or leaked.
Domain extensions are the smart contracts of Mixin Network. They provide much flexibility and they run on the Mixin Virtual Machine (MVM). So far, Mixin has developed some interesting use cases on top of the MVM. Let’s expore the most popular Mixin-based dapps.
Mixin Messenger
Mixin Messenger is a decentralized messaging app built on the Mixin Network. It is designed to provide secure and fast messaging services to users in a Web2-like experience.
The Mixin Messenger application allows users to send text messages, images, and other media files to other users on the platform. It also enables users to transact crypto in a trustless manner.
Mixin Messenger does not work on the traditional client-server model. Instead, it is solely based on a client model. In this model, the server only serves as an agent to transfer the messages. The messages send through Mixin’s platform are highly secure and cannot be checked by any node on Mixin’s network.
Users can do a lot more on top of the Messenger. For example, they can develop their own bot with functions such as transactions, paid content, and e-commerce. The bot works similarly to messaging apps like Telegram. Furthermore, users can customize their bots to buy cryptos OTC (over the counter), or post external links on their behalf.
Mixin Network is mostly known for its Messenger app. The reason why Mixin is less heard of its that the project is based in China and Japan. In the recent years, Mixin Messenger has gained the attention of users outside of Asia, which means it has plenty more to grow.
How to make money on Mixin?
The ways of making money on Mixn are currently limited. One of the reasons is that Mixin is rather useful as a discovery tool for new projects. If you are interested in using Mixin-based DeFi apps, you can check out Bwatch, Pando, and Ocean ONE.
If you are looking to run your own node on Mixin Network better call Trump for “a small 2 million dollar loan.” It takes 10,000 XIN to run a full node. As of 2023, the average price would be $2.8M.
Price Prediction for Mixin — Can it hit $1000?
Buying and hodling XIN — the native token of Mixin — is one way of potentially making money on Mixin.
By looking at its current price, it’s natural to think about the chance of XIN hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.
Let’s examine the potential growth of the XIN token by analyzing its tokenomics. XIN’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} XIN tokens being in circulation today, that means a price of {PRICE} per XIN.
How did we come to that calculation? It’s quite easy, the price of a XIN token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each XIN coin.
By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of XIN at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for XIN to hit that price.
At a price of $1000 per token, that means the current market cap of XIN would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.
Now let’s shift our attention to the fully diluted market cap.
Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.
The fully diluted market cap represents the total value of a coin if all tokens were in circulation. XIN’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} XIN which means that no more coins above that number will ever be created.
These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.
How does this impact the price of XIN? Taking into account the current price of a XIN token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. XIN coins that have been burned are not taken into consideration because they have been permanently removed from circulation.
Whether it seems gigantic or not, the number we came to above only takes into account the current price of a XIN token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the XIN protocol fully diluted market cap.
These are all crucial details to know when calculating if XIN can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.
The future of XIN depends solely on its growth as a network used by tens and hundreds of millions of users.
If you’re looking to add some XIN to your portfolio, the most trusted places to get some are Binance and Coinbase.