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Week 1

Extended Unspent Transaction Output (EUTXO)

To pay 10 ADA to Bob, Alice will create a new transaction that consumes her unspent transaction output (from a previous transaction) of 100 ADA and creates 10 ADA for Bob and 90 ADA for Alice (which becomes her new UTXO).

graph LR
	A100(Alice: 100 ADA) --> Tx1[Tx 1]
	Tx1 --> A90(Alice: 90 ADA)
	Tx1 --> B10(Bob: 10 ADA)
	A90 --> Tx2[Tx 2]
	B10 --> Tx2
	B50(Bob: 50 ADA) --> Tx2
	Tx2 --> A35(Alice: 35 ADA)
	Tx2 --> B5(Bob: 5 ADA)
	Tx2 --> C110(Charlie: 110 ADA)
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UTXO:

  • Inputs are unspent outputs (UTXOs) from previous transactions
  • Output is specified by an address (a public key or its hash) and a value (ADA and other token amounts)

Extended UTXO:

  • Output addresses are generalized and can contain Plutus script (Validator)
  • Outputs can carry arbitrary data called Datum in addition to addresses and values
  • Redeemer is an arbitrary data provided by the transaction for every input

Plutus script doesn't have access to the whole state of the blockchain (as in Ethereum), but it has access to:

  • Datum (provided by the party who produced the output)
  • Redeemer (provided by the party spending the output)
  • Context (transaction inputs and outputs, and other information)
graph LR
	A(Script: 100 ADA + Datum) --> |Redeemer| Tx1[Tx 1]
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  • Producing transaction has to provide only a hash
  • Spending transaction has to provide a validator (Plutus script)

When a node receives a transaction it validates it before accepting to the mempool ^[A pool of pending transactions], and if any input contains Plutus script, it is executed.

  • If Plutus script (Validator) fails, the transaction also fails.
  • If some inputs (UTXO) are already consumed, the transaction fails without incurring fees.

Plutus

Plutus Core - the language of the Plutus script. The code itself is written in Haskell and compiled to Plutus Core ^[At some point other languages might be supported as well that will compile to Plutus Core].

  • Plutus Core is the on-chain part, which runs on the blockchain and validates the transaction.
  • The Plutus Application Framework (PAF) is the off-chain part running in the user's wallet that builds and submits transactions.