The Ergo Data Model: Revolutionizing Blockchain Architecture

This document provides a comprehensive and in-depth exploration of Ergo's unique data model, based on the UTXO (Unspent Transaction Output) model, enhanced with powerful smart contract capabilities (eUTXO).

Unlike traditional blockchain architectures, Ergo's model introduces programmable state transitions, stateless verification, and deterministic execution - creating a foundation for truly scalable and secure decentralized applications.

Ergo represents a significant advancement in blockchain computational models, extending the traditional Unspent Transaction Output (UTXO) paradigm through its enhanced eUTXO (Extended UTXO) model. Unlike conventional blockchain architectures, Ergo's model introduces:

• Programmable State Transitions: Enabling complex computational logic within transaction outputs. This contrasts with the account-based model used in other blockchains (like Ethereum), where state is globally mutable. See UTXO vs Account Model Comparison for a comparison of Ergo's model in terms of parallelism, privacy, and scalability.
• Stateless Verification: Allowing efficient validation without maintaining complete blockchain state, facilitated by technologies like NIPoPoWs.
• Deterministic Execution: Ensuring predictable and verifiable transaction outcomes.

1. Computational Completeness: Supporting Turing-complete smart contract execution within strict cryptographic constraints via multi-stage contracts.
2. Cryptographic Composability: Enabling complex cryptographic protocols through Sigma Protocols.
3. Scalable State Management: Designing a model that supports parallel transaction processing and efficient state verification.

A solid understanding of the blockchain structure lays the groundwork for exploring Ergo's data model. Ergo blocks contain critical metadata, transactions, and proofs.

• Block Overview: Comprehensive introduction to block structure in Ergo, detailing how blocks aggregate transactions, references, and proofs.
• Block Header: Detailed examination of block header components, which include references to previous blocks, difficulty, and other crucial metadata.
• Block Transactions: Understanding how transactions are organized within a block to form the ledger state.
• AD Proofs: Authenticated Data Proofs enable efficient stateless client verification by providing cryptographic proofs of state transitions.
• Extension Section: An exploration of Ergo's flexible data storage section that can hold additional metadata and information beyond basic transactions.

At the core of Ergo's data model is the "Box," which is Ergo's implementation and extension of the UTXO (Unspent Transaction Output) concept. While traditional UTXOs simply track unspent coins, Ergo's Boxes enhance this model with additional programmable capabilities.

A Box is essentially a "smart UTXO" - it serves the same role as a UTXO in tracking unspent value, but extends this with sophisticated computational features. Like a UTXO, a Box is created when value is sent in a transaction and is consumed (spent) when that value is transferred elsewhere. However, Boxes add the following capabilities that go beyond basic UTXOs:

• Immutable State: Each box represents an atomic, immutable state unit that cannot be modified after creation.
• Typed Registers: Boxes contain 10 registers (R0-R9) with specific purposes and rich computational potential:
  • R0: Monetary Value (in nanoERGs)
  • R1: Protection Script (Smart Contract)
  • R2: Assets/Tokens
  • R3: Creation Details
  • R4-R9: Flexible, Typed Custom Data Storage
• Programmable Spending Conditions: Each box specifies precise conditions under which it can be spent, enabling complex logic through ErgoScript. See Box Modeling and Box Overview for detailed exploration.

Transactions define how boxes are created, transformed, and consumed, and are central to Ergo's dynamic state evolution.

• Transaction Overview: Fundamental principles of how transactions work in Ergo.
• Transaction Composition: Detailed guide to constructing complex transactions off-chain before submitting them on-chain.
• Transaction Format: Technical specification of transaction structure, ensuring interoperability and standardization.

• Chained Transactions: Explore how sequentially dependent transactions can be composed.
• Merkle Tree in Transactions: Understanding how Merkle trees provide data integrity and facilitate efficient proofs.
• Transaction Signing and Backend Signing: Cryptographic principles and implementations for authenticating transactions.
• Transaction Validation: Comprehensive overview of on-chain verification processes that ensure correctness and adherence to protocol rules.

• Data Inputs (Read-Only Inputs): Access additional data in transactions without spending boxes.
• Transaction Fees: Understanding fee structures, ensuring that miners are incentivized.
• Babel Fees and Babel Fees Plugin: Innovative mechanisms allowing fees to be paid in alternative tokens.

Ergo supports a rich ecosystem of assets, from fungible tokens to NFTs, enabling complex economic models.

• Token Basics: Introduction to tokens within the Ergo ecosystem and their fundamental characteristics.
• Asset Standard (EIP-4): Standard for creating and managing tokens in Ergo.
• Token Verification (EIP-21): Ensuring token authenticity and integrity.

• NFT Overview: Comprehensive introduction to NFTs on Ergo.
• NFT Creation: Guide to minting NFTs using Ergo's flexible token system.
• NFT Versions (V1 vs V2): Comparison of different NFT implementation standards.
• On-Chain NFTs: Storing NFT data directly on the blockchain.
• NFT Royalties: Mechanisms for continuous compensation to creators.

• Perpetual Tokens: Tokens designed to exist indefinitely.
• Token Burning: Permanently removing tokens from circulation.
• Singletons: Unique tokens with special properties.
• Auction Contract (EIP-22): Standard auction contract implementation details.
• Artwork Contract (EIP-24): Specialized standard for managing digital artwork tokens.

Ergo uses an address system that ensures security, privacy, and flexibility.

• Address Basics: Fundamental concepts of Ergo addresses, including encoding, format, and usage.
• Address Types: Detailed overview of Pay-to-Public-Key (P2PK), Pay-to-Script-Hash (P2SH), and Pay-to-Script (P2S) address types.
• Address Validation: Methods and best practices for validating Ergo addresses, including checksum verification and format validation.

Ergo defines protocols to streamline user interactions with wallets and applications.

• ErgoPay Protocol (EIP-20): Interaction protocol for mobile wallets and dApps.
• Payment Request URI (EIP-25): Standard format for payment requests.
• Proxy Contracts (EIP-17): Mechanisms to manage funds and logic via intermediary contracts.

Ergo's cryptographic design ensures robust security, privacy, and flexibility.

• Non-interactive Zero-Knowledge Proofs: Private transaction verification without revealing sensitive data.
• Flexible Signature Schemes: Supporting multiple signature types via Sigma Protocols.
• Privacy-Preserving Mechanisms: Advanced features to protect user privacy.

• Discrete Logarithm Proofs: Foundational to signature verification (Schnorr).
• Ring Signatures: Enhanced privacy through signer ambiguity.
• Threshold Signatures: Enabling multi-party computational scenarios.

Ergo employs a robust, stateless transaction validation approach:

• Transaction Construction & Signing: See Transaction Composition, Transaction Format, and Signing.
• On-Chain Verification: Transaction Validation and Merkle Proofs.
• Script Validation: Detailed in ErgoTree Script Validation and the ErgoScript Language Specification.
• Execution Environment: Access blockchain state via Context Variables, ensure deterministic evaluation, and apply cost constraints.

• Difficulty Adjustment: A dynamic mechanism that adjusts mining difficulty every epoch to maintain a target block time of approximately 2 minutes, ensuring network stability and predictable block creation despite fluctuations in mining power.
• Storage Rent Mechanism: A novel approach that prevents blockchain bloat and ensures long-term sustainability by requiring users to pay rent for storing data on-chain. See the linked page for implementation, fees, and economic incentives.

• General Data Structures
• Proof of Proof-of-Work (PoPow): Consensus mechanism enhancement for light clients, related to NIPoPoWs.

• Merkle Trees for efficient state commitment.
  • Merkle Batch Proof
  • Merkle Extension
  • Merkle Light Proof
• AVL+ Trees for authenticated key-value storage.
• Interlink Vectors: Lightweight blockchain verification.
• AD Proofs: Supporting stateless clients.

• Parallel transaction validation inherent in the eUTXO model.
• Stateless validation reduces computational and storage overhead.
• Just-in-time costing ensures resource use is always checked.

For more information see the scaling section.

• Multi-Stage Transactions: Understanding how to design and implement complex, multi-step transaction flows using the eUTXO model.