Granola

Currently, users of Cashu digital cash systems face challenges in securely exchanging tokens issued by different mints, especially when tokens represent different monetary denominations. For example, a user might hold tokens backed by Bitcoin and wish to exchange them for tokens from another mint backed by dollars. Typically, such transactions require trusted intermediaries or external exchanges, which introduces security vulnerabilities, counterparty risks, and privacy concerns. Granola seeks to address these issues by facilitating secure, trust-minimized, and privacy-enhancing atomic swaps directly between users across different mints and denominations.

Proposed Solution

Granola introduces an atomic swap protocol designed specifically for the Cashu ecosystem. It ensures swaps are atomic, meaning transactions either fully execute or fail without loss or risk of partial completion. By leveraging pay to pubkey and HTLCs in Cashu, Granola guarantees transaction privacy and unlinkability. The solution is mint-agnostic, enabling seamless token exchanges across any Cashu-compatible mint, thus removing the need for external intermediaries. The Nostr protocol is used to facilitate secure and decentralized communication during swaps, enhancing the reliability and resilience of its operations.

The Granola protocol was initially proposed by Breno Brito and Luis Schwab and received 3rd place at the SatsHack 2024 hackathon.

Potential Impact

Granola significantly enhances interoperability within the Cashu ecosystem by enabling atomic cross-mint swaps. Users can seamlessly and privately exchange digital assets such as Bitcoin-backed tokens for dollar-backed tokens without relying on third parties. This reduces counterparty risk and preserves transactional privacy. Ultimately, Granola promotes greater decentralization, financial autonomy, and user confidence in digital cash solutions.

References

Granola Cash

Students

• 2024-2025: Luis Schwab, Computer Engineering Program, University of Brasília.
• 2024-2025: Hugo Szerwinski, Telecommunication Networks Engineering Program, University of Brasília.