Basics
Dero Tokens

DERO Tokens

Tokens

Tokens on DERO are user-created assets deployed through smart contracts. What makes DERO unique is that tokens are stored as encrypted balances in user wallets, not in the smart contract itself - providing privacy and rug-pull resistance.

How DERO Tokens Are Different

AspectERC-20 (Ethereum)DERO Tokens
StorageIn smart contractIn user wallets
Balance Privacy👁️ Public🔒 Encrypted (66 bytes)
TransfersThrough contractWallet-to-wallet (like DERO)
Contract ControlCan freeze/lock❌ Cannot control after issuance
Rug-Pull Risk⚠️ High✅ Resistant
Privacy❌ None✅ Ring sigs + encryption

Token Storage Model

Traditional Tokens (ERC-20)

// ALL balances in contract
mapping(address => uint256) balances;
 
balances[alice] = 1000;  // Public, everyone sees
balances[bob] = 500;     // Public, everyone sees

Problem: Contract controls everything. Owner can freeze, steal, or manipulate.

DERO Tokens

// Tokens sent to WALLETS
Function IssueAsset() Uint64
    10 SEND_ASSET_TO_ADDRESS(SIGNER(), amount, SCID())
    20 RETURN 0
End Function

Result in wallet:

Alice's wallet contains:
  DERO:  E(500)     // Encrypted 500 DERO (66 bytes)
  Token: E(1000)    // Encrypted 1000 tokens (66 bytes)
  
Each encrypted balance stored as ElGamal:
  Left:  33 bytes
  Right: 33 bytes
  Total: 66 bytes per asset

Source: cryptography/crypto/algebra_elgamal.go:91-93, cryptography/crypto/balance_serdes.go:31

Privacy Features

Token transfers use DERO's full privacy stack:

  1. Ring Signatures - Sender hidden among 2-128 members
  2. Homomorphic Encryption - Amounts encrypted
  3. Bulletproofs - Zero-knowledge validation
  4. TLS Network - Encrypted transmission

Verified in source:

  • Balance storage: blockchain/transaction_execute.go:239 - nb.Balance.Add(echanges) (homomorphic)
  • Token sending: dvm/dvm_functions.go:80 - SEND_ASSET_TO_ADDRESS implementation
  • Wallet updates: dvm/simulator.go:378 - nb.Balance.Plus() for tokens

Rug-Pull Resistance

Why DERO Tokens Are Safer

Ethereum ERC-20:

// Contract owner can:
function freeze(address user) onlyOwner {
    balances[user] = 0;  // Steal tokens
}
 
function pause() onlyOwner {
    paused = true;  // Lock all transfers
}

DERO Tokens:

// Once issued to wallet, contract CANNOT:
//  ❌ Freeze tokens
//  ❌ Take them back
//  ❌ See your balance
//  ❌ Control transfers

// Tokens in YOUR wallet = YOU control them

The "Cash Model":

  • Bank (contract) issues cash (tokens)
  • Cash leaves bank → in your wallet (encrypted)
  • Bank can't track or control it anymore
  • You can spend it peer-to-peer

Token Types

Fungible Tokens

Example: Stablecoins, utility tokens, governance tokens

Function InitializePrivate() Uint64
    10 STORE("total_supply", 1000000)
    20 SEND_ASSET_TO_ADDRESS(SIGNER(), 1000000, SCID())
    30 RETURN 0
End Function

Each token is identical and interchangeable

Non-Fungible Tokens (NFTs)

Example: Collectibles, game items, unique assets

Function MintNFT(recipient String, token_id Uint64) Uint64
    10 SEND_ASSET_TO_ADDRESS(ADDRESS_RAW(recipient), 1, token_id)
    20 RETURN 0
End Function

Each token has unique ID, quantity = 1

Using DERO Tokens

Receiving Tokens

Tokens arrive in your wallet automatically via SEND_ASSET_TO_ADDRESS():

Transaction received:
  SCID: 0abc123def... (token identifier)
  Amount: E(100)     (encrypted 100 tokens)
  
Your wallet now contains:
  E(previous_balance) + E(100) = E(new_balance)
  
All done homomorphically - no decryption needed!

Sending Tokens

Transfer like native DERO:

# Using wallet RPC
curl -X POST http://127.0.0.1:10103/json_rpc -d '{
  "method": "transfer",
  "params": {
    "transfers": [{
      "destination": "dero1qy...",
      "amount": 100,
      "scid": "token_scid_here"
    }],
    "ringsize": 16
  }
}'

Privacy features:

  • Ring signature hides sender
  • Amount encrypted
  • Balance stays encrypted

Key Advantages

1. Wallet Storage = True Ownership

  • ✅ You control private keys
  • ✅ Contract cannot take back
  • ✅ No freeze functions possible

2. Privacy = Full Encryption

  • ✅ Balances encrypted (E(amount))
  • ✅ Transfers use ring signatures
  • ✅ Cannot track ownership

3. Peer-to-Peer Transfers

  • ✅ Send without contract involvement
  • ✅ Like sending DERO
  • ✅ Fast and private

4. Multiple Assets Per Wallet

  • ✅ DERO + unlimited tokens
  • ✅ Each encrypted separately
  • ✅ All in one wallet

Learn More

Source Code References:

  • Token implementation: dvm/dvm_functions.go:398 - SEND_ASSET_TO_ADDRESS
  • Wallet storage: cryptography/crypto/balance_serdes.go:31 - Balance *ElGamal
  • Homomorphic updates: blockchain/transaction_execute.go:239 - nb.Balance.Add(echanges)

Related Pages

Understand Token Privacy:

Build with Tokens:

Deploy & Use: