AlgoBurner: The latest HEADLINE x Yieldly collab
Burn Baby Burn 🔥! This is the tagline for HEADLINE Crypto’s latest decentralized application AlgoBurner. AlgoBurner answers the age-old question — how can you [prove] that your assets are burned? How can you convey to the average layperson that your NFTs, ASAs, or assortment of fractional and non-fractional tokens are immutably, irrevocably lost forever?
HEADLINE’s Algorand Ecosystem DeFi partner Yieldly is spearheading real-world use of AlgoBurner, committing resources to test and integrate AlgoBurner as an integral part of Yieldly’s revised Tokenomics approach. First via test burn, with a view to using long term.
Very delighted to work with our partners at HDL and cross-pollinate our tech. This is how a community grows and how we build long-term sustainable growth in the Algorand ecosystem. LFG!” - Sebastian Quinn, founder of Yieldly
With AlgoBurner, Algorand DAO managers, NFT creators, and Algorand Standard Asset devs can safely and securely dispose of excess fungible and non-fungible tokens. Token-burning security should always be viewed from the perspective of the consumer. If a token is burned, how can you [prove] to the end-user or community member that the token was burned?
How It Works
In short, burning Dapps “destroy” tokens by sending them (the tokens) to Algorand addresses where the mnemonic password of that address has been rendered unrecoverable. Tokens sent to addresses with no access keys can never be withdrawn or moved by token creators or consumers. Typically, the Algorand addresses used for burning are generated by address creators throwing away the mnemonic password or by on-chain smart contracts called “apps.” However, with both solutions — how can you [prove] to the end-user that the burner address’s mnemonic is really lost forever? Typically, it requires the end-user to have a working knowledge of TEAL, or for the end-user to accept some version of “Trust me, bro.” With AlgoBurner, ASA burning is finally trustless.
Algo Burner Technical Details
Algo Burner is a simple protocol to permanently lock or “burn” tokens.
The simplest method to lock a token would be to generate a new Algorand address, opt the address into the asset, then destroy the secret key. However, with this method, there is no way to ensure that the burner has not in fact saved the secret key only to later recover the asset.
The Headline implementation utilizes a TEAL 5 smart contract in its burner protocol. TEAL 5 supports “inner transactions”, or transactions signed by the smart contract for its unique address (which is derived from its application id).
After deploying the smart contract, the address controlled by the contract can be calculated by:
algosdk.getApplicationAddress(appId)
After deployment, the Algorand address generated by the above code must be sent a small amount of Algo to cover the cost of each “addasset” app call (which opts the application’s address into the asset(s) to be burned.
Currently, there are issues with sending Algos/assets to application addresses directly from within myAlgo wallet. However, no issues are encountered when merely using myAlgo to sign such transactions. After sending the Algos to the application address, the user must then send an app call with the arg “addasset”, the appAddress in the foreign accounts array, and the asset index in the foreign assets array. Using the PIPELINE SDK, this is a single line of code:
let txId = await Pipeline.appCall(appId, [“addasset”], [appAddress], [asset])
Once the assets are sent to the app, they are non-recoverable. The app may then be used for additional “burns” or deleted. (Note: user must ensure that application address has sufficient Algos to cover opt-ins for additional assets).
Future
Moving forward, the HEADLINE team will look to work with other ASA partners, analytics providers, and indexers to integrate AlgoBurner as a core protocol in the Algorand Ecosystem.
