Introduce UTXO enhanced smart contract capabilities on L1 using ErgoScript

[kranebitt]

Description

IOTA Smart Contract Protocol (ISCP) is the ideal solution to creating account based smart contracts anchored to the tangle. The solution is fast, scalable and flexible and doesn't compromise the security of the Tangle.

To enrich this approach, I would like to propose to adopt/develop ErgoScript in GoShimmer in order to enhance the UTXO-based L1 with smart contract features. This would essentially achieve five things:

1. Unlock the full potential of UTXO implemented through the Chrysalis Upgrade
2. Combine the feelessness, speed and sustainability of IOTAs base layer with the robustness of one of the most thought-trough smart contract scripts in cryptospace.
3. Proof that a DAG can run the same scripting machine in a secure manner as other projects.
4. Offer a technical bridge to the Cardano/Ergo with its extended UTXO model and smart contract architecture and hence benefit directly from developments.
5. Offer a robust interface to external oracle-pools for which ErgoScript ist optimized and currenty successfully running on the Ergo blockchain.

Motivation

It is widely acknowledged, that ErgoScript is one of the most robust, advanced and future-proof approaches to UTXO-based smart contract scripts.

According to its developers, ErgoScript is "a powerful and protocol-friendly scripting language for cryptocurrencies. Programs in ErgoScript are used to specify the conditions under which currency can be spent. The language supports a type of non-interactive zero-knowledge proofs called Σ-protocols and is flexible enough to allow for ring-signatures, multisignatures, multiplecurrencies, atomic swaps, self-replicating scripts, and long-term computation"
Source: ErgoScript Whitepaper: https://ergoplatform.org/docs/ErgoScript.pdf

All fo the abovementioned features are useful for machine economy use cases.

Why UTXO and smart contracts? This is explained well in this abstract by Robert Kornacki, titled "Unlocking The Potential Of The UTXO Model": https://github.com/Emurgo/Emurgo-Research/blob/master/smart-contracts/Unlocking%20The%20Potential%20Of%20The%20UTXO%20Model.md

Requirements

Write a list of what you want this feature to do.

1. Allow for SmartContracts on the DAG/Tangle directly
2. Integrate and enhance the ISCP with a UTXO-based script
3. Allow for ErgoScript programmes to run natively on the Tangle

Open questions (optional)

How to create a hierarch of smart contract approaches. When to use a L1 script and when to use a L2 solution.
How to test ErgoScript on Layer 1 during the Nectar Test Phase.

Are you planning to do it yourself in a pull request?

No.