The audit has started!

Let’s get the bad news out of the way first. User-submitted transactions are temporarily disabled, but mining and existing yield accrual continues as normal, in preparation for the next phase of the audit. Now the good news. Working with a world-renowned cryptographic consultancy company supporting us, we are taking a different approach to this audit compared to ideas that have been proposed for other Monero-based coins recently. There will be some short-term compromises on privacy, but we believe that the end result will justify the methods. The audit will require everyone to perform a once-per-wallet “STAKE” transaction from the CLI wallet. (GUI wallet support for the audit process will possibly be added if the timescales permit.) This “STAKE” transaction will burn all the coins in the wallet, and record how many coins were found. The coins will then accrue yield (like a normal staking transaction in Salvium) for a period of 10 days (not the normal 30 days). During those 10 days, the contents of the transaction will be analysed by both dedicated cryptographic software and by members of the team to look for anomalies. If nothing is found, then at the end of the 10 days the coins (including the earned yield) will be paid out, and you will be free to perform transactions with the new coins as normal. If any anomalies are detected with the transaction, it will be flagged publicly, and the team will ask individuals to explain the anomaly privately to the team, before the coins are returned. If no individual comes forward to explain the anomaly, the coins will not be returned.

Current status:

• A hard fork v5 has been implemented at block height 136,100
• Wallets should be updated to v0.8.0. CLI Binaries are available here. Desktop wallets will be available soon.
• All TRANSFER, STAKE, BURN, and RETURN_PAYMENT transactions are now disabled
• The chain continues to run and mining continues
• Yield payments on existing stakes will also continue to be processed normally

The Audit Process

To ensure the accuracy of the Salvium Supply figures, we will conduct a second fork as soon as possible that will enforce a comprehensive supply audit. This will be done using a modified version of the existing staking functionality. It will be updated so that:

• All SAL holders are required to participate in a compulsory staking process.
• A reduced 10-day lock period for audit stakes (reduced from 30 days)
• Audit functionality will be enabled – counting and monitoring staked coins.

Blocking suspicious transactions

The steps in the audit process are as follows:

1. Users will submit a “stake” command from the CLI wallet (GUI wallet support will be added if possible during the audit process)
2. The user’s wallet will then construct one or more STAKE transactions that will burn all of their coins using standard “protocol_tx” processes for a period of 10 days. The STAKE transaction(s) will contain special audit data, including:
   • The wallet public keys {Ks,Kv}
   • Linkage data that proves each input being spent has come from the wallet with the specified public keys.
   • Proof that the transaction does not provide any change – i.e. that all coins have been burnt
   • The aggregated value in SAL of all of the inputs
3. The STAKE transaction(s) will be rejected if there is any discrepancy between wallet keys, or if any attempt is made to alter the amount of change being generated.
4. The valid STAKE transaction(s) will be mined, and then are immutable on-chain, and verifiable by ANY OBSERVER – we are hoping that the community will help us be vigilant and spot potentially suspicious transactions (although we already have a dedicated scanning tool that flags everything we currently consider “suspicious”)
5. If any transactions are flagged by the scanning tool, we will notify the community during the first 3 days after they enter the chain (through Discord and Telegram). If the team does not receive adequate proof of ownership for those coins within 4 subsequent days (i.e. within 7 days of submission) the transaction (and potentially also the wallet address) will be blacklisted. Blacklisted transactions will NOT pay out when the STAKE matures after 10 days.
6. STAKE transactions that are not blacklisted will pay out in a new asset type “SAL1” upon maturing. SAL1 outputs will be spendable in all normal transaction types, and will be considered as audited.

After approximately 30 days (21,600 blocks), the audit process will end. At that time, it will no longer be possible to submit SAL coins in any transaction – only SAL1 will be spendable in any way. Mining block rewards from blocks after the start of the audit process will pay out in SAL1, not SAL – those coins will already be audited and will not need to be staked. Coins that have already been staked prior to the start of the audit process will be allowed to mature at the normal time, and will also pay out in SAL1, not SAL.

Exchange Status

All exchanges have been notified and will remain closed until the situation is fully resolved. We are in direct communication with exchange partners about the required steps for re-enabling trading.