The Incognito Finance Protocol (IFP) facilitates the sending and receiving of ERC20 tokens with unparalleled levels of privacy. But Incognito Cash was established with the goal of bringing privacy to all of DeFi — not only to the transfer of tokens but, critically, to smart contract interactions too. Key to this functionality is the project’s next major step — the relayer network.
What are these relayers?
The relayer network forwards transactions on behalf of users. Relayers pay the gas costs associated with IFP users’ transactions, thus severing the link with those users’ Ethereum accounts. This means the transactions within the IFP are not directly linked to wallets or public addresses, so anonymity is preserved even when interacting with smart contracts.
In other words, relayers are key to opening the whole world of DeFi to IFP users, ensuring that they can interact with smart contracts without ever having to leave the IFP Privacy system or compromise that advanced level of anonymity.
Can relayers see my private information?
Relayers cannot see the contents of the transaction they are facilitating, nor the identity of the user initiating the transaction. Through a verification key, the IFP smart contract contains all the information needed to assert the transaction is valid, and the key contains no information that can be used to identify users.
How are relayers incentivized?
Relayers receive fees in any token they choose to accept. So if the user wants to interact with a smart contract using Shiba Inu, for example, fees do not necessarily have to be paid in Shiba Inu.
Relayers broadcast three things:
  1. 1.
    Their IFP Address
  2. 2.
    The tokens their willing to accept
  3. 3.
    The respective fee amounts
Users are free to choose their preferred relayer for each transaction by selecting the appropriate IFP address. Wallets can also be set to automatically choose the relayer offering to complete the transaction for the lowest fee.
Can relayers make alterations to my transactions or intercept my funds?
Relayers see only encrypted transactions, with a hash value that is validated by the smart contract at its destination. The IFP Privacy system operates with no no inherent need for trust.
If any change is detected at the point of validation, the smart contract will revert the transaction. This leaves the relayer out of pocket for gas, as they will have paid for the transaction up to validation but will receive no fee for completion.
The process does not require minting any new tokens and does not create any risk of double spending, which is when a token gets fraudulently duplicated at the point of exchange.
Who signs my transactions?
Typically, Ethereum transactions require a signature which is can be easily traced. However, IFP transactions use SNARK Proofs instead of a signature—hiding the token amount and type as well as the sender and recipient. If these SNARK Proofs are verified successfully by the IFP smart contract system, the transaction will be accepted.
What additional functionality comes with relayers?
It is no exaggeration to say that relayers unlock the full potential of the IFP Privacy Smart Contract. The whole universe of DeFi becomes available to IFP users from within the Privacy system. Users can take part in trading, farming, gaming or anything else that they wish to do with their tokens on Ethereum — as well as the other smart contract-enabled blockchains IFP is set to launch on. With gas paid by the relayers, user privacy is also perfected for sending and receiving tokens within the IFP system.