Anish Mohammed: Panther Protocol – Zero-Knowledge Compliant Privacy in DeFi. Ep. 537

Transcript

this episode is brought to you by nosis nosis builds decentralized infrastructure for the ethereum ecosystem with a rich history dating back to 2015 and products like safe cow swap or nosis chain nosis combines needs-driven development with deep technical expertise this year marks the launch of nosis pay the world's first decentralized payment network with agnosis card you can spend self- custody crypto at any Visa accepting Merchant around the world if you're an individual looking to live more onchain or a business looking to wh label the stack visit nosis

pay.com there are lots of ways you can join the nosis journey drop in the nosis Dow governance form become a nosis validator with a single gno token and lowcost Hardware or deploy your product on the evm compatible and highly decentralized nosis chain get get started today at nosis doio cars one is one of the biggest node operators globally and help you stake your tokens on 45 plus networks like ethereum Cosmos cesa and dydx more than 100,000 delegators stake with corus one including institutions like bitgo and Ledger staking with corus one not only gets you the highest years

but also the most robust security practices and infrastructure that usually exclusive for institutions you can stake directly to cors one's public note from your wallet set up a white label note or use the recently launched product Opus to stake up to 8,000 eth in a single transaction you can even offer high yield staking to your own customers using their API your assets always remain in your custody so you can have complete Peace of Mind start sing today at chorus.

one hello everyone uh I am Maher Roy and today I am catching up with Anish Muhammad who is the co-founder and CTO and maybe even the lead researcher of Panther protocol Panther protocol is uh one of the uh one of the main projects that is operating in the prei space which is extending you know the Notions of privacy that we have in the blockchain area right you have a lot of projects in cryp currency where the idea is that a user should be able to transact on a blockchain system they have full privacy as if they know only they should be able

to know what they did um which makes Regulatory Compliance hard and uh Panther protocol is taking the approach that yes full privacy is valuable but also there are many use cases where uh Regulatory Compliance has to be factored in the Privacy equation right from the start and they're building a project where various kinds of disclosures various kinds of kyc processes Etc can be put into D5 workflows so this is a protocol in development and we'll we'll cover um the various objectives and where they are in

their uh life cycle hi Anish welcome to the show yeah thank you uh thank you for having me so Anish we have met I think the last time in 2015 so you you've been involved in the crypto space for a long long while and so tell us uh your journey of how you how you got into crypto in the first place Oh you mean cryptography or crypto crypto yeah crypto crypto crypto like the the meaning that we stole from cryptography okay so uh a full disclosure a friend of mine um there's

two part Story one part story is how I got into cryptography mailing list other part story is uh professionally how I got into payment system so my first degree is in medicine after I did my medicine degree in India I was offered a job by ien in Sweden uh they had a micropayment system called yala yala as they call it and my task was to write a rapper for OPP to sell so we could actually mean I did review and did some work on wrapping it up so for me bman sisters was something was in my head like you know big problem of play double spit right and the second part of the thread Des uh I don't know you're from India so you probably heard about a silk list a friend of mine got with shanka he

runs this list and he had John Berry uh the guy who runs the photography mailing list on the list and he kind of got me into the list so you know two things happen where a I had this previous exposure and you know having gone to grad school to do cryptography and all those things and being exposed to double spend problem you on a a photography mailing list and you see this and go wow interesting and I shall put my hand up and say wow interesting that's where it ended I read the thing and then like in 2010 2011 I think me and Amir Taki among a bunch of people had a workshop in uh our hacker space in London and we were explaining to people how to do Mining

and for the rest of it like in 2013 I became an advisor to ruple and they asked me if I was address it and when ethereum happened again the same thing in London Victor Tron actually met me he asked me if I would help and then you know etherum swam I was one of the reviewers of the or paper I spent a bit of time with the team yeah uh The Story Goes On like you know I've been involved in design design review of half a dozen layer ones probably you know 18 20 Taps ZK for last seven eight years now and do we remember it correctly that you also worked for U UBS or no Lloyds Lloyd's back yeah lyd and justb yeah I was a

retail Banker I Was Made day job this is all things I did for fun right it's like I had well I think I don't know what we met for I thought robotics so I have been involved in a whole bunch of things Cloud Big Data open sour robotics which is drones and crypto crypto crypto so I ran a bunch of meetups everywhere I don't know what what is the reason how we met I I still don't recollect but you know all the things anything I get interested I try put in my effort and you know these are all my spare time activities in the last few years you are building Panther protocol which has um which has a really interesting approach to to privacy and compliance for for or defi why did you start building this

project what were your initial thoughts I will give you it's with me is always a story so I have still SP Spare Time interest in philosophy so my co- his name is Shan we wrote a paper like 2011 just looking at uh the the title of the paper is a new secret it kind of describes the information Arbitrage and structures in power so if you were to think about thing you know if you have any information of mean I typically give the example of when Society was primitive there was a language existing and one smart uh man woman whatever being able to count the number of moonday you know how they

could be the representative of moon on earth like count till 28th 29th day not happening go to the Mount and S so that everybody has oh moon God don't appear today right there you go next day oh moon God come back you know now that the person I said Moon God not to come everybody wants light so they do hunting in the night so they they have an you know an alpha in having the moon be predictable so there there there you go this is an information arbitr instructors in power and when crypto came about I was like look and there is going to be a real inversion happening and I I've been involved as I was describing like all the big data things and all those things it's like all the way from Cloud to Big Data been well

very heavily so for me I could actually see what is going to come effectively you know once the data is all in public the thing with you know blockchain is like a bizarre thing right so all the states is visible all the smart contracts are visible all the vulnerabilities are visible and all everything is visible so you know if you had to apply an ML and do something both in terms of attacking and recognizing things which is bit of a challenge right and if you were to look at the traditional and as as you were poting out like you know I've been a retail Banker as well so I've understood Finance quite well so so I've worked in mic micropayments reinsurance and uh you know Finance in a larger sense so for me

and I did some work for hedge funds and things like that so for me I understand trade you know trade F quite well and Retail Finance and banking well and I understand the construct of you know kyc you know kyc kyt and and the value kyc kyt has right it's like you know it could be a limiting factor for anybody and what you describe as a regulatory Arbitrage if you have two countries one has a different kyc regime and other one has a kyc regime there's a regulatory Arbitrage there so I understood all of this and I looked at it I went you know what we have an opportunity to actually you this is like a two part Story one part story is like looking into this uh future and thinking crypto is not going

to be the crypto that we see as a tiny bit it has to go to the space where it's a fraction of the trade five space right because trade five is always a magnitude bigger and crypto is Tiny and for trade five to enter or crypto to enter trade five we need to have this mechanism where that is equivalence equivalence in terms of Regulation equivalence in terms of understanding equence in terms of moving between the two and uh you know for me and like in Mound when we had this chat for us it was like this this the obvious thing which is like okay you have to build uh you know a mechanism by which we could actually have mechanisms that exist in trade fight like dark pools right and mechanisms that exist in trade

five which is kyc kyt build them two together and make it available for D5 so this is like the Journey of path right in my own in my own experience you could think of kind of the conversation around privacy as existing on a on a spectrum so on on the one side you have like Bitcoin and ethereum where all your balances are public all your smart contract interactions are public and the day I share my address with the tax Authority in one country is is the day they are able to follow me through life and it's obviously non ideal I mean even as an at

an individual level but if I were to think of at like a corporate level it's it's definitely it's definitely non ideal massive problem yeah your Alpha is you know like yeah the the problem I would describe Mah as something like this like you and I for us our you know the half life of data for us is much lesser half life for data for Enterprises are much bigger and also the thing is the leverage they have is bigger right they could actually do transactions which are orders of magnitude four five six orders of magnitude bigger than us right so for them they strategy has much higher value for you and me our strategy because of

multiple reasons right the strategy doesn't really have that much of value for them it's very high value so this is the thing that actually happen so the best example I give is Renaissance Technologies right nobody really tells anybody like how they do it but they have no 30 or 40% return on investment even when the market is going down noncorrelated gains right and how is that possible that is possible because there stry is all private and how is that possible in a traditional finance and why isn't that it's available for us given our volatility we should have a lot more returns right if you were able to have institutions that can actually have both to me that's that's a future of you know I I would say crypto the way

I see it mean like you know compliant crypto right and on the other side you have this other part of crypto where it's the zcash the Monero the tornado cache all of these system with dark wallet Amir Taki is probably the perfect example of it where you have a generation of technologists that are building privacy systems on crypto where the end objective is that when I as an individual transact on a crypto nobody should be able to know uh what I've done on a crypto system and and when when I've used those crypto systems my central challenge ends up becoming that

at the end of the year I have to make a tax statement how do I even explain to the tax Authority this is a particular shielded pool that I use that's the input that's the output and like I am fine as a user I'm not doing something illegal I I'm just using a shielded pool because I want to unlink the two and how do I even provide the trace of it to an authority and I'm sure that the problem is bigger for a company and so when when you look when you study kind of like this vision for the dark wallet or dark fi or or these systems you realize it's it's a vision right like

there is value in it but I can't actually utilize these tools because for me in the end I have to Pro I have to provide a a trace of what I did to a tax Authority at the end of the year yeah you are in the US you have IRS IRS has Global visibility of everything and this actually makes it difficult for a bunch of us so I mean Amir as I was saying like I've known Amir now I don't know 14 13 14 years now I told you you can go on hacker space website or some places you can see pictures of me and him I believe um there was a couple of other people there in hacker space like and I last saw him in mon negro right

and he invited me to his place I haven't been there but I really like him I like his IDE his idealities and he's a very enthusiastic and meticulous person who tries to learn everything when you meet him you'll have a bunch of papers printed out in his hat right so you know in credit is where credit is due he definitely is pushing the envelope as you rightly pointed out the challenge is exactly what he pointed out right so if there is ever a tainted wallet in the mix you have a bigger problem because and the problem is the way the law sees this not problem is the way that how we can implement it right so we need to think this in a way that we you know we don't it's harder to provide exclusion

proofs right this is the challenge right so we have to actually then filter things in so when people come in we need to be able to say that okay you know what we won't allow this set of people that oh F actually made a list of so we will have to use a third party which is outside who do services to everybody else so you know same set of services we can actually consume that traditional trade F Investment Banking Finance actually uses right they could do the kyc and they could do this almost the same kyt as well and then the thing is when you want to reveal this things you can actually reveal it in different ways so our initial simple reveal mechanism is like a c c reveal mechanism where you

as a user can actually reveal mean but I should probably say this to you one of the things that everybody should recognize when you do reveal is that you are reducing the Privacy set right if you know imagine there's a pool in which like the 10 participants right let's say 100 participants and like 50 of them are out of the US then IRS would definitely get 50 transcripts right they have one in half you know they have a very good chance of know exactly what's happening everywhere so that is something that everybody needs to understand and in in one sense that is probably not the reason why they're using it right so they're using it to actually you know guard the alpha and if IRS recognizes the strategy they applying assumption

here is legal they can look at it okay this is a tax go that's fine that that's that's the way we should be thinking about not the way like you know I don't want anybody to see the transaction the the thing is like the transaction is uh the Privacy is bounded when you walk in you get privacy shield for while you're doing this thing when you walk out you lose it and at that point in time you have to reveal all those things now you have the transcripts in both ends and there are a bunch of other things that are correlating so you when you you know when use map us meaha where to go back to IRS and say I deployed so let's think of an example you're using Panther you know let me walk you through how you come into Panther and you using uh Unis

adapter and you deploying some capital in Unis V3 as a liquidity provider and how you going to submit it to IRS so when you as mea comes in we are currently using a third party service provider called puy p r i fi and what they do is they would do all the normal things which is like you know they have the whole capacity to do everything right now we are just doing minimal things because we've restricted the total amount of money you could actually you know transact in the protocol in we1 because like you know it's a test everything is being tested out so we kind of you know running things at a minimal level so once you've actually been uh going through the kyc process uh you know they would do a ecdsa signature on the thing we have a kind of an

interface that's being agreed between us Panther one side and our kyc provider we can have multiple kyc providers but at this mod di we have one and we have this interface built we using a jbjb a baby jbjb and we have a signature that comes in once you have the signature then we would actually have the first set of circuits that actually map you from your kyc Valor to a new set of addresses in that sense that is your new address from which you're going to use you know your assets to do transactions okay and now you go into M Pool and there's an adapter to unisp right so Panther unisp so in unap you deployed some liquidity but where everybody looks at it it looks

like Panther is actually doing it right so they could be like a you know 10,000,000 10,000 whatever that number of users right so it's the aggregate of everything you see on outside world outside world sees that inaction so you deployed liquidity have V3 like I can't remember optimism whatever the air drop was and somebody made like 3 four mil so imagine that's the case like he you know nobody would actually be able to point that you and say hey me did this no it'll be like somebody using you know whatever and AAS knows for sure you when you submit ayas would say ah yes how did mea get 2 million mea actually provided this from this point to this point these other set of transactions and all of that is clear m is in the good me keeps

his money M keeps his strategy m is good unap is good Panther is good that's how we think we should go forward that's really cool it's like the it's like stradling the the center that is almost absent in crypto it's like not fully public but they're not fully trying to build like dark dark F right it's it's like Panther is ultimately straddling that Center and um it's one of the few projects that Is straddling that Center and getting into Commerce which is is the interesting part of it and and of course like the complexity is in the is in the technology uh that that that

makes it happen so uh we'll we'll kind of uh uh get get into that so you gave give this example of um a Unis swap pool where where uh maybe in the beginning I'm imagining I have something like an ethereum address maybe maybe it's on a different chain yeah I mean Panther is pretty much on Ean compatible we have deployed on polygon so we are going to deploy in flareless world we might deploy another evm compatible chains so it is let's assume an evm compatible chain and an ebm compatible address and there exist unap let's assume those things and then let's get out okay so

it's like I I can imagine Panther as kind of a smart contract multi-asset pool that can that can that can be deployed on pool absolutely on on any of these AVM chains right so there are some caveats to it but you know it's like a support for the curves you know you know effectively it's growth 16 and bl25 so it's like you know the support for liary support for tooling that's kind of things that are because it's you and because it's me I want to be very fair you know and any of the audience that's listening to I I don't want to have people and make thinking he said this that's not the case yes there are some nuances to this when you use ZK ZK needs to be supported you know it has to be

fast and cheap so we can actually like there is no point in providing privacy for things where it doesn't really add value like the key thing is like if you were to go to McDonald's and you were to buy a burger you might get a smoothie it's unlikely you will ever go to mcll just for the SMY very rare but yeah that's the assumtion yeah right so so then I start off with a normal polygon address maybe this is even one that I have given to the tax authorities in the past and then the first thing is I somehow interact with the the panther system on polygon and I ended I end up okay so let me walk you through yeah let me walk you through so you know you come in uh if you want to go to Panther as I

was describing you're going to go to purify purify will do the verification and now you have a derived address from your address you have a derived address so you have a derived polygon address the map between the two or the link between the two is only visible to you in that sense okay and now you have with this address you're going to only visible to me not even to purify my kyc provider it is visible the purify in a sense like purify actually has a transcripts right so if they decrypt and then like what they have there is literally the transcripts of all the transactions right so this map uh this bit of the transcript is not fully visible to them whatever you do with them they have the transcripts and

that's visible to you you and them right now if everything is put together everything will be visible right so on their own they can't actually you know they can only do the F part of it right which is like they can say these are the transcripts this is what has happened and they also have the kyt right you know if they reveal the kyt plus the kyc that's not they can actually reveal but still you know you have to to you know reveal some of the bits to actually give the Fuller picture so this is where the IRS question when you mentioning really makes sense but you know you actually want to describe your trans your transcripts to them so it's like a commit reveal mechanism you have already committed to all the things that need to the reveal they have the whole transcript and as I was describing it

has some implications of doing that just like if you if you and I are the two parties in the transaction and you reveal a m then they also know M as well right so yeah so this is the thing so now your new address the derived address will be in the multi pool right and in the multi pool what you have is a UT or representing assets right and then you know normal things like the normal Bitcoin mechanism right you know the thing to proof is that this hasn't been seen before and then you can actually use this to do swaps And Trades of that sort right so we have two mechanisms in Panther is is like a z trade which is like a one to one map okay so sometimes I confuse the two so forgive me if I do I've been in this for 4 years so I

occasionally confuse Stree for the woods so if I use the wrong words for the wrong things don't shoot me it's just that my head is so buled in my head there are so many things and things crosswise every now and then so in a meta level there's this possibility that you and I which is Anish and me we could actually swap two assets assuming we know you know we have we happy with the kyc we have this okay so there's this construct I need to describe the construct is like in Panther there's this construct called a Zone Manager a Zone Manager actually looks after a Zone a zone is the place where you your kyc is valid right and the The Zone Manager kind of has to agree to the kyc provider okay this is a kyc requirement I have

you do the kyc and if this is valid I will allow this participants to get into the zone right and what happens is then between you and me or we somehow figured out like we want to do a swap we can do a swap we can do a private swap right so you know both of us can actually swap things and nobody will be able to figure out what we actually swapped but if you go and then provide irs's transcript IRS knows for sure what was done right so in that sense you have the compliance you have the transcript you can actually prove that you actually did a legitimate transaction which is like a swap between asset a to asset B right so this is one way and when this is extended using an adapter so the adapter is like a think

of it like a bridging mechanism right one side of the bridge sits on PA the protocol so there a multi pool and so all the assets are represented in in the in there and then the adapter then you know does this backwards into say a normal D5 protocol right and when the noal defa protocol looks it's it's it's interacting with the smart contract and the back end of the smart contract is the ases in the pool and for the Unis swap what it looks like is okay this is the address from which is trans action is happening and this transaction is within the multi Associated does that make sense so the imagination I get is um imagine like the entire polygon ecosystem maybe imagine it as a large

large city first right so imagine it as like San Francisco it's it's a it's it's a large city and there are different neighborhoods in there and I okay one of those neighborhoods is like kind of like the panther multi-asset Sheed pool in there and then this Panther multi-asset shielded pool is like further divided into uh smaller School uh school areas let's say like and and and and then you're calling these things the smaller things zones so this polygon is the city yeah oh no no no no no okay so the zone is like uh topmost right you can actually think of a school district as a zone right and you have like a smaller subunits as like

a smaller Mass you can can have multiple map spere right and like you can actually have like u i mean in theory you can have one Mass but you can have as many mass as you want right but the question here is like you know how big a mass to be so it can provide the ineffective uh effective privacy set so there's a tradeoff between I I would say threeway tradeoff now what what is meant by a mp uh multi asset shielded pool multi-asset shielded pool so it's like if polygon is kind of like San Francisco as a whole and then it's like um is like Panther is kind of like a big area of San

Francisco yes yes yes a dark area of San Francisco dark area of San Francisco there are like multiple school districts in that dark area and it's not the case that those multiple school districts are all equ equivalent right so because because I have to choose what kind of school district I will use what kind of multi-asset shielded pool I will use and the better pool is the one that many other users are using cuz like my anonymity set is kind of the set of users using that school district or that MP in that case so the essence of it is kind

of I have an address in like San Francisco the city in the beginning and then like you have the school districts Maps you have a peer boox kind of a map which you get a new peer boox addressed into the school district that will allow you to participate in that school district in that school district and the overall the top person the what I call the Zone Manager which could be the school district whoever that is sets the rules for the games and the thing which is like kyc has to be this you need to meet this and this and this then you allowed to participate uh within that and if you are in there you can have adapter so if the school School District as uh you know what do I call relationships with other school districts in other places you allowed to

meaning I'm just describing a D5 protocol or a school district right so you could actually do that and you can interact with them right so it's like the that school district or that multi-asset shielded pool has some kind of administrator that's that's able to a top level administrator a top level administrator that is able to set rules for uh for that bu pool and that rule can include that if anyone wants an address to be generated in this pool then they have to pass kyc across these four or five either one of these four or five providers and they could be multiple very minimum one right like very minimum one they can have as many

as they want but you know constraints of creating circuits and things like that set aside I mean you're absolutely right so so then I choose kind of of like a I did the district or a mass and I look at okay they accept kycs from like these five providers currently there's only one but that's because the protocol is Young and then I send this kyc information to this provider and then this provider that's a separate transaction and and like Panther or you know in the class of all Panther protocol shouldn't actually care about this and just that we there are no real uh web three service providers that could provide uh you know independently

provide you with the you know a kyc the challenge is to part not just technology but the regulation right because of the you know gdpr and other things the data ownership is a bit of a problem so you actually need to get the user to go to the service provider and that KC right and this is one of the challenges we have we can't actually have the whole thing in general here like we can't run in a normal world if you we a bank you just get you know somebody like on a fire to actually provide you with a service you wrap all those things you do all those things in one house right we have the normal gdpr thing but because we have a D5 protocol which is decentralized and we we have to do all of this we can't do things in a normal

way this is like doing things in somewhat awkward way so you know we can meet all it's dancing around to making sure that you know it's like you know the kids play the game where they hop around so the same thing we have to hop around to make sure that we meet all the requirements that all The Regulators have so I I I submitted my kyc and presumably the kyc provider is providing me some kind of certificate it gives you a signature it's just an ecdsa signature on on a yeah I mean you get a signature back saying is valid right that's literally what it is this this account passed kyc kyc with me that's all none

of the information is revealed like like okay the information lies with the kyc provider in their servers or in their Cloud so the transcript of that thing is in the easiest way of describing it's like encrypted with the public key and you know it's there so at any point in time so for example IRS really gets interested you go that's the kyc provider have a word with them uh you know they they can provide it with all the details well you know the rest of the mechanism is normal like you know if you think about the normal Bank you know typically once you know the the end users's name and everything is available uh you know the regulatory Authority will go directly to U or who are the end

user is because they can send a submit to the user right and they can send it to both places but the user is the easiest let's send it to them we don't have big lawyers banks will have big lawyers so they typically don't go after the banks they go after the people that's easier to you know you know what I'm saying so so then this MP administrator essentially they have set up the rules we shouldn't call them the M administrator right like a protocol Zone administrator because like there could be multiple so you know what I'm saying there there could be multiples m in there but the the top level The Zone Manager what they do is like exactly what you like describe they make this list they make an arbitrary rule like

what you just described they could have at least a list of one kyc provider or they can have as many as they want to and they describe what their requirement is right and they could say you know if you were able to prove this and this and this we will allow you to and this would be the list of assets that will be listed in this zone right they might say they might not list the cash or mono whatever up to them not to us then I kind of like get a shielded address of some kind in that uh in that zone yeah and then I might be able to do two things a if I'm wanting to do things that are in the zone itself so another user has a shielded asset in that same Zone then then I could do like a

shielded swap with that user so Anish is in this like a between you and me like imagine that we were describing like Anish and meaha both F kyc we are both in the same Zone R by Z Soul manager imagine Sebastian to be the soul manager okay so we both are here we can trade between ourselves like that is definitely one yes and and on the other side if I want to interact with a different system now that different system is New York that's kind of I don't know Unis swop running on polygon then to to that different system I just appear as a normal polygon address of some kind and I can commit money or I can remove money I can do whatever I could do in New York because

I am appearing as a normal address okay so just just to be very clear so there's couple of nuances we need to be very sure of okay so as a Zone Manager you might or might not allow uh Indo Zone interactions right so because the risk uh is more for Z manager there might be agreements between indm so imagine SE was one Adrian was one Z manager so they have an agreement they allow and they have equivalency in compliance then they could allow us to like I could be in Sebastian's Zone and you and Adrian Zone we can actually have this transfer and we could be fine and the thing that I think you are kind of refering to is an external one right the external one is like uh we don't have a lot of control

over it we are assuming that you know these other things and we can only prove our innocence right the proof of innocence is our side we can't prove innocence on their side because we don't know mean assumption here is like they look at oh the regulator looks at the other side the regulator has a view of the other side I mean the question here is being asked is what is it that you have been doing and we can definitely answer what we have been doing the fullest required legal requirement in that sense does it make sense kind of so on a on a high level um on a high level it's like if there's a Zone a user can come uh they can comply with the rules

for entering the zone and they entered the Zone they got some assets on a shielded address and they could use that shielded address to do some kind of more public transaction on the unisa running on polygon your strategy absolutely absolutely but the zone of course cannot provide any kind of guarantee that that thing happening on the public transaction met certain rules of the of the land it might break certain rules of the r and and of course the Zone cannot provide that guarantee yeah absolutely if if the Zone if the transaction happens between two addresses inside the Zone itself for those The Zone Manager can provide probably greater

guarantees yeah so the the the guarantee is cryptographic guarantee right like all of this is cryptographic guarantees there are no other guarantees of any kind there's like no trust me bro no this is all cryptographic guarantees everything that's happening you have cryptographic security margin and all the cryptographic security right like you know privacy set is cryptographically bounded your security margin is cryptographically mounted you know all of those things so it's like there is no such thing as like we are doing magic trust me bro no everything we are doing clearly articulated cryptographically provided the proof is visible to you you as a user can actually validate it and you be happy with it right right so so in this whole

journey where I started with a normal polygon address I moved into a a multi-asset uh Zone sh Shield Zone and then I I got an address and and then I did something on the Unis swap I got a different asset that was ALS that also is now part of the shielded Zone and then at some point I unshielded and I went back to my to my normal address and in this whole flow there is UN unlinkability the transaction that happened on unisoft on polygon and my original um original uh address that transaction cannot be l

um those two those two things cannot be linked by anyone that is not the kyc provider and not the Zone administrator yeah uh yeah and they can't do anything in that sense so it's like if everybody colludes right then things could be possible the person who could actually reveal everything is you you can actually reveal things right if you as me want to reveal things you can but you know otherwise because of the way we do kyt if kyt you know provider has some transactional detail you can correlate all those things but that's like uh you know you need to go around the world collect all the data put all those things together yes mean in the world there is no such thing as perfect

privacy transaction traffic analysis implies people can people can actually put things in the window cryptographically speaking we try our Lev best it's like a classic example I give if there's a room and there's a door and you can have a zero proof that I have the ability to leave the room right if it's just me that's no privacy right there's a thousand people you have 1,000 chance that you can guess who it is the same applies to you know Panther if the Privacy set is a th000 or privacy set is 10,000 again this a tradeoff right and I always describe to people this tradeoff so you know if you were to think about a circle and a square uh a circle Bas of this and a square that fits in the area

of the square is always bigger than the circle right so when you have a curve and you straighten it down out in the area will become become so effectively what happens is like when you do transactions you will be forced to do batching because you have to do batching to provide privacy uh that implies you know imagine an amm you have X into Y is a constant you have a Dy by DX right is that curve of the thing it gets straightened out a bit right that means that's a you know that there's a small loss that's happening because the instantaneous price is not being available to everybody right so this is the price we have to pay for in privacy so in a perfect world unless your strategy has better Alpha than this difference in curves a plus the gas

charges or charges of doing whatever it is but that's the challenge we will always have you know there is definitely that thing that that's why we actually have all the you know dark pools and the way they're willing to spend so much money to get uh data centers right next to wherever the exchanges and everybody gets the cabling up you know I mean literally one should read the book on dark pools and that that will give you the narrative so there's a lot of money being made right and so you know my expectation again I haven't really tested this thesis out because I don't have like there is no Panther that exist right now as you rightly pointed out which you could actually do exactly what Panther does like we have provided all the tooling that one requires to do

compliance right to best of AV abilities other than just this committee right committee is hard thing to implement because in a decentralized product call is almost impossible to agree to a committee get the committee to you know do all the crow right but everything else has been done now the thing is like you could easily do all the things and the Assumption on the other side is that there's a value that trade 5c is in dark pool that they will actually see in doing transaction and deploying strategies into defi right I mean it I think of it as like a multi-legged strategies right I'm sure you have seen a whole bunch of them right and here is like there is a good amount of alpha to be made in multile strategies right and

you know imagine B that they deployed in multiple EVN comat ones you can actually go across as simp going back to your Zone Manager question the Zone managers agree that this transactions are allowed and you get kyc in all the different ones whichever you decide and then you can do all of this across all the zones and make your money I mean there's nothing stopping you I mean yes there is a small chance that you have to pay the gas fees for doing all these things plus any protocol fees that is incurred you have to pay but otherwise whatever you the thing I I normally say to every Alum you know founder is like look what Panda provides you is the ability for you to do whatever you want to do in a private

sense and you keep 90 99 plus X off all the value that you create what Panther or similar protocols will do is like they charge you because you can't do it for free somebody has to pay for having to run all the things right so that need be fee need to be paid but otherwise all the alpha everybody creates is ACR on the L1 and l1's and l2s are the biggest winners and the users are the biggest winners and we as a protocol provider we we just are you know I should probably say to a large extent this has been a very much a passion project so I conceptually understand the kind of

party that that will be a kyc provider this is a party that has probably some kind of automated systems where you upload a driving license and they're able to verify that it's genuine or not they they are specializing in technology like that they they make good kyc providers I I don't understand what kind of party in the real world is going to be this Zone administrator is it like a tradire institution we are looking at it could be somebody who has a you know virtual asset service provider license right so you know day one we are probably going to use a DA as a initial Zone manager but in a in a world where we have a protocol being

successful anybody who actually wants to do something stuttle between the two worlds who has a license to do this so the reason I say this is like it's a regulatory issue right we could just have this thing running on its own headl in that sense but because of the way you actually want to have this ability for The Regulators to talk to everybody they need to be somebody responsible right so you need to have to have somebody who they could go to and ask okay who are all the people who could actually provide kyc and why what was your criteria and then you have to provide them with okay so when they have a interaction of The Regulators Regulators

say okay if you want to do this these are the kyc providers they go yep so you the regulator ask me to do this and here is you know the certificate that you know uh or this letter of inter whatever that is that the interaction between the two parties so the the parties are very clear as to what the regulatory requirement was and how it was agreed and how things were done so you know otherwise what will happen is because we have to deal with the so-call traditional Finance world we need to have some sort of inequivalence so you know this is like a possible equivalence mechanism still there's a bit of lack of clarity in terms of who exactly would be that because we don't know like we are talking to like a bunch of people there

have been different levels of interest you know in an ideal world as somebody who really understands this if they come back come come up to us that'll be pretty awesome because like you know we build everything right as I was saying he like my expertise is very much research and building right I'm good at thinking about protocols I'm getting at putting together a team designing a protocol getting it to a place where you can run I am not a marketing guy I am not a BD guy that's my cound right so you know W the two of us that's how it is so I can only say to you that you know you will definitely take the host to the water whe the horse is going to drink or not is enely up to the horse cool so so how does it work so

when I when I go from a normal address to a shielded address um what's the underlying technological engine that's that's making it very simple it's a very simple mechanism you know it's a fist of the five circuits there's a a you know a map that exists from your address to a new address right so you could actually prove that this is the address that you you have and that's it that's that's how you get mapped to the new address so when you come back from the kyc provider then there's this a knowledge mechanism that actually Maps you from your fa addresses to the new address right and that's the first set CC that are there and there are like a few trees that we

have like a there's a static tree then a bus a taxi and I car over the name of the tree there are four trees that are there so essentially uh you know all the data for a zone is like in the static tree plus the Zone Manager contains all the things so effectively any any data that need to be there is all updated there and all the rest of it get updated into trees and that's so essentially all of this are kind of Merle trees and loen because it's a utxo thing these are all Merle trees right so you have an address that's been created so that will map to uh a u in a Merle Tre that says and there's a map between the two that's kind of you know shielded by the normal Zer knowledge mechanism right so you can

actually if you so decide you want you want to re can but you know nobody else can actually do that right uh that's cool that's cool so so Anish you have a version one um main net launch coming in the next couple of months right yeah yeah I mean like I would say it's more 6 to8 weeks okay so I I'll give you a full disclosure uh we have our um audit started with Paradise I think it's two weeks now a week or two I mean I'm traveling so I'm pretty bad don't hold me responsible for the sleeping days so when that's complete assuming there are no major box we are

very close to you know there are two three more phases at best that need to be released so we can actually release it to the main net and and what will be part of this first main net okay so let me look at my notes so I'm going to look at my notes and tell you what's there so you know stage one is the Z account registration so this is the first set that to use you were describing right then there's this okay there is some I should probably describe that there is the Privacy staking mechanism which I kind of mentioned in passing but uh it's a mechanism by which you actually uh reward people for providing privacy right and they have this construct which is like a zzp just like an internal

thing to provide privacy otherwise there's this linking that is possible so that is also in V1 so I'm I'm just imagining it as accounts that are creating transactional activity on a own uh just so that genuine economic activity can be masked inside that kind of fake transactional activity happening in that zone yeah I mean it could be you are doing transactions which are real transaction but you need to have transactions right it doesn't have to be fake in that sense there is no need to do fakes right you just need to do transactions if you do real transactions even better right so the overall privacy set increases so imagine there's a th people people and thousand people are deploying various things on Unis swap

you have a privacy set of a thousand straight up right that's what it is and all of you will get your rewards uh from doing all these things and then there's a map between this so this is part of the view one functionality then a shielding so essentially what we were describing uh then transvers between uh internal to MP so between you know you and I in that sense uh uh then there is like a z accounts directory service so you can actually get some idea of where things are uh then inra Mass transfers and messages okay so you could transfer between two Mass remember we were

talking about New York and San Francisco going as part of one of these zones with one administrator and Anish being another Zone another administrator being able to exchange assets across zones provided the rules of the two zones match in some way absolutely yes and then uh it's like a we call it a bundler so you know when the transaction happen somebody needs to put all these things together that's uh you know we could call it a miner or a bundler so that's one of the things that need to be have built and I told you about like uh you know different kind of um trees that are there for trees so there's a tree called taxi tree so that uh then the bus tree and then a car

uh a fairy tree okay and then there's a last tree I got by the name of the tree then uh withdrawals basic disclosures and Z account renewal right so withdrawals is like you want to withdraw something uh you know basic disclosure is you do the transaction you want to reveal and zard renewal is like kyc you remember our conversation about kyc we have kyc is are epimeral they are not permanent right so you have to renew Okay so so then we have a D5 swap essentially there an adapter to your you know a protocol that's a D5 protocol so we can do that so there's something we call Advanced disclosures so um it's like it's kind of

hard to describe it in simple terms but essentially you have uh Ways by which you can reveal bits of things right so disclosure is like a com Ral mechanism Advan explosure is like you want to reveal some bits of it right and increasing the number number of assets that need to be there so the number of assets that are there is kind of limited so we are kind of you know adding more and more assets uh so last of the bits is uh what we call an involuntary disclosure so this is where if it's required that you know authorities come in and all the parties you know agree to do what they need to do then they can actually construct certain pieces and uh then this Z trade which is what I was

describing between the two of us and then m ation from .5 to one that is yeah I think that's pretty much I think I described all of it actually there's a huge there's a huge list of features there's a huge list of features yeah youve been working very hard uh it's still working very hard so I should give my team the credit right like uh I talk nonsense to them get bybs uh draw things they actually go come back you know look at it and come back to me and yeah I'm very lucky to have a very good team yeah of course like the flip side of it is because it's a huge list of features there would be like unexpected behaviors where people will end up leaking

information that they thought was safe and things like that it is possible we will have to yeah it is very possible we might find things yeah oh yeah we didn't think this people could do this wow yeah that's very possible but you know we optimistic yeah so it's like important to start small important for users to to start with small amounts and test test on the system yeah absolutely mean the overall the protocol is kind of limited to 1,000 bucks so you know that that's a whole idea the idea is like you know minimal kyc minimal amount of transactions so you could actually get used and people can get used to Panther and then when Panther is much more known to people and people are used to the

behavior they can then they can the world is the oyster they can build their strategies and deploy it and go to whatever they want I am actually curious um there's an element to such a protocol which is there's a massive element which is okay how do you even conceive of and like build this thing which you have solved but the other problematic part is distribution getting people to actually use it which is a very different problem so are there any um breakthroughs or successes in that Dimension like XO y parties committing to use Panther in a certain way so yeah I mean I I have to admit like

you know I've been mostly the person responsible for the fbot right I'm the co-founder CTU and the chief scientist has been thinking about the problem and I've actually delegated the BD me we work together but in the largest sense you know the conversations I had uh either one of us and uh my co-founder so there have been a bunch of conversations that's been there uh we have lots of interest from various parties we are in conversation with coinbase and other people so I don't know like you know it's between you know talking and signing the contract right so you so definitely there are multiple parties that we be talk into uh you know I I

can't name names but definitely there is three at least more than five people that we have been talking to like who have a possible you know kind of institutional kind of is somewhere in the Spectrum right so that's the that's the thinking the thinking is like what are these people who are in you what I wouldn't call it institutional because institutional would require a lot more than banther could actually do right now right so the idea here is like get panther panther has been aimed at this uh space in the market where you know retail users all the way up to say you know minimal family offices who have minimal regulator requirements can actually go use that's where we are

aiming at but if you want to go beyond where we go to like traditional you know hardcore set of people that require a lot more heavy lifting right like you know all the Integrations and everything which I think it will take a while but you know the idea here is getting people who are from started retail investors to people who run family offices with minimal regulator requirement a kyc kyt tax returns that's the kind of thing that you are required to in know fulfill that's the idea getting them on boarded I mean we are also giving people incentives right like to you know play with the protocol so the initial plan is to you know pretty much the largest chunk of the protocol uh you know tokens

were allocated out to give everybody incentives right so the idea here is like if the protocol succeed everybody who participates succeeds so that you know assumption here is like a there is some need for users the average Jo in the street who understands what privacy is and has some strategies that they want to deploy would like to use a protocol like Panther and B given the regulatory you know landscape that the utility function of Regulation is quite high and people want to have you know things in the right manner right and that's B and C is that given there is you know some slight

expenses effectively you have to pay for this gas fees and all the things right there'll be a fee and the Assumption here is like the alpha that people have is bigger than the fee so it really makes economic sense for them to actually do this and the friction is within acceptable bounds these are all assumptions that's been making so Anish is it correct to understand that the fee is there because okay the underneath polygon is charging something but in a sense because in order to provide uh um privacy you have to incentivize people to do transactions that might sometimes be fake somebody needs to pay for those transactions to happen which reflects as a fee on the genuine users of the

panther protocol right yes absolutely you're absolutely right yes yes spot on thank you like fee for cover traffic in a sense you you you yes absolutely that's that's yeah that's that's one way to think about it like you know there has to be a fee that allows the ecosystem to have a poity some game right so otherwise it'll be like a you know NE you know it's a try of comments so we have a problem with try of comment that so that's why we have a fe structure the fee structure would allow you know a fee to be you know leved on the users and given out to everybody who helps the ecosystem to to flourish because you know it's in the best interest of everybody in the ecosystem to provide uh you know privacy and you know it'll be a loose loose if everybody

starts revealing the set right so that's the whole idea I mean it's okay if you reveal it to your you know regulators and you know the the construct here is like you did your transactions end of the year you all reveal everything to your truth Regulators not a problem because like you know your strategy you can have it for a whole year right you run your strategy you made your money you subit your tax returns everything is fine now you can't go ahead and use the same strategy tomorrow because now you know IRS has access to all of this and you know who knows what happens right so you have the panther um token and tell us about how these were distributed and um and you know what is the

tokenomics how many tokens and oh gosh that's a tricky bit I can't have it to my head but I will describe it to you it's been a while since I last worked on it as I was saying like you know uh as the person who you know puts a lot of this in one's head a lot of the things Skip by mind right so you have buckets of problems as there go it's like a bucket of problems where you need to talk to The Regulators to make sure what you're doing meets whatever it is a bucket of problems where you look at ZK and the progress in CK a bucket of problems in D5 where you look at D5 and solve that and then there's other things that you did in the past right so in terms of toomics what has happened is like an early model was produced in 2020

20121 so we had like a bunch of Private Sales so you know both me and my cound putting out on money a bunch of our friends put in money and then we had a public sale in 2021 and then you know the tokens uh there's this a fraction between 10 to 15% of it was allocated to the team uh 10 to 15% was allocated to the foundation so there's a foundation that actually is supposed to you know look after this so the foundation is based in jalta uh then this a whole bunch of tokens has been allocated to you know providing uh Rewards for you know the thing that you were describing which is essentially providing privacy set then a small bit of tokens were allocated to

actually help build the co system so this is kind of how it was overall made out and it was a very long curve it's like a a mission curve for for like 144 months if I'm not mistaken 12 years so we kind of thought about it for like you know in my mind if a protocol would take that long uh it's not the optimal place to be right my expectation that's you know maybe a year maybe two years before that it should reach the equilibrium equilibrium means there's enough of fees that's coming into the protocol that the protocol is still sustaining so once that happens then the emission doesn't really matter right like emission is just an emission it doesn't really make any difference because uh you know fees in this thing makes it sustainable so

that's that's the thingy perfect and I'm actually curious on um what is the fee Mak model of Panther so I I'll Define my question better so in your protocol you have like different parties so the kyc provider The Zone administrator the user that's shielding probably in the future the regulator might itself have some kind of powers Etc if they decide if they decide right yes so and and of course it is pretty obvious that the user will pay for uh pay for privacy like they so if if I'm on polygon and I interact with Unis swap without Panther my cost is X

but if I interact via Panther it is x + y and that y you can imagine that why is PID for this cover traffic or this extra economic activity that Panther protocol a whole bunch of things right is to pay for the gas fees for running the ZK is also to provide like uh you know things that are required uh also to provide Co traffic or everything right like you need to think of it like you know in one sense there need to be in my head sometimes I think of it like you need to build upgrades so if you are very successful what you need to happen is that you should go to the Dow you you know users of the Dow should be able to put a proposal just like okay we need to

actually improve this from whatever this is to that so you know that this is all list of all things that you want to do the cost of all of that needs to be underwritten over time by fees right otherwise it's kind of impossible like you can't have a LW making mechanism to be able to deliver services to everybody that that that's the whole idea right so do you intend to charge the user like you intend to charge the user but do you also intend to charge the Zone administrator as well because in a sense that zone as Zone administrator is a financial service provider and is there a business model to be made on their

side too we haven't really thought that through in that sense because like it is very possible that if you were to create uh a particular Zone which is like very internal to yourself and nothing to do with like external protocols maybe right the Assumption here is like you know this is public good right in my head it is public good privacy for protocols is public good right and we need to support it and we need to we as as like users of the the ecosystem right and that's the way we are thinking but if it's like separate and completely segregated and the Zone Manager runs this you know in a very different world you know the value

of public good to you and me as an average user the the ecosystem is diminishing maybe there's a case to be had right we haven't come across anybody who said this to us we want to do something that you would never be able to interact with it is very possible they might do that right they might have uh some sort of a what call a hybrid kind of chain that they use for something and they want to deploy Panther and they want to you know be his own manager well yes they can be in that instance yes that's a different instance right so you know we are not you and me as an average you know L1 L2 user is not getting anything out of it cool um so we coming to the end of the conversation arish um would you like

to tell our listeners where they could find more about the p the protocol and what are interesting resources oh okay so the thing would be uh you know if you go to panther protocol. satps panther protocol. we have a bunch of things there then there's dogs. Panther protocol that's there as well then there are a bunch of blocks there as well so and there explain a bunch of talks that's been given mostly by me and members of our team so we've you know I should have said we've actually done a bit more work in the ZK space as such we've been uh you know active in the Z prize uh we've actually published uh a z snack scheme of our own we have an IBC scheme of her

own like we've done a bunch of things so you know there are a couple of preprints that's available so you know feel free to you know uh look around if you have any difficulty uh there's our community manager his name is yuris and if you want to get old of him it's uh Z 780 on Telegram and he would definitely respond to any of those things if everything fails then uh drop me an email I'm Anish banpro oh I am zero knowledge on telegram cool thanks Anish for the for the interview and I look forward to try Panther most welcome thank you