DAPPCON 2025: Ultrasound Privacy- How to harden web3 with Aztec - Zac Williamson

Transcript

Okay. Um, awesome. We get to start. Hey everyone. Um, good afternoon. My name is Zach. I am the CEO and co-founder of Aztec. We are a privacy first legacy for Ethereum. Uh, and I'm here to talk about privacy. Um, I'm here to talk about the same thing I've been talking about for seven years, which is how do we make web 3 mainstream with privacy? How do we harden it? How do we make it secure and prevent it from being uh um easily uh manipulated by bad actors? So, here's the thesis. This is this is the uh this is the big brain

rocket science that I've been talking about for seven years, you know. So, let let's I'm going to break it down. You know, I know it's really hard to follow along, so I'm going to do it step by step. Okay, so step one, if we want make mate web 3 to be a big deal, it needs to it needs to interact with real people in their everyday lives um and actually uh enable them to use products and services that they use in the real world. And in order to interact with real world assets and real world quantities, um one needs to be able to link an identity to a cryptocurrency account. And step three, to put identity on chain, we need privacy. Big deal, right? Anyway, um so this is pretty basic, right? This is fairly straightforward. Um I saw this in 2017 when I wanted to build a TRFI app

on Ethereum and we lacked privacy. So I set out to solve that and uh here we are today. Quick 20-minute job really, you know, um privacy or not. Anyway, so um yes, privacy is important. Um for years, privacy has been almost thought of as like an addition to web 3, as in you know, you have all these various different web three ecosystems. then oh you can have a private web 3. That's not how it's going to be in the future. Uh privacy is as important to web 3 as decentralization. It is a core value or at least it ought to be a core value of blockchain. Um and I'm working to make that a reality along with many many other hundreds of people if not thousands. So why does privacy really matter? Um just to take a step back what

do I mean by privacy? It's a nebulous word these days. Uh so at its core it's information asymmetry. It's being able to prove something about information that you have that other people don't have and you don't share that information. So, it could be as simple as saying, I know my password uh and I'm not going to tell you what it is. Or, you know, here is a e passport digital signature from my passport. Um I'm going to disclose to you that a this signature exists and b um uh um it shows I'm over 18, but I could not disclose anything else. At its core, privacy technology is identity technology. um and gives you the ability to make addistations about what happens in the world, what happens in web 2. um uh it allows you to um

create trustless oracles where you can inside a web3 smart contract have some understanding of what's happening outside for example using zkls you can get information from websites using zk email you can get information from your email um and at it really it's trust infrastructure technology it's it's making I don't I don't see it as um trustlessness uh I I find I think blockchain is all about um it's not about removing the need for trust it's about making it possible to rapidly gain trust in one another so that you can interact with each other um seamlessly and this is what this kind of technology does. It's what privacy does. And so to really drill down into it

um uh like the final real reason I think why privacy is required again it goes back to identity it goes back to real real world stuff. Where's the fundamental value in web3 coming from today? Um I think uh hang on do I have another slide here? No. Okay. Um where's it coming from? And and uh what's missing from this equation? Um I would argue that there's only really two fundamental sources of value on blockchain today. There's the value of dollarbacked stable coins. And then there's a value of economic consensus. And by that I mean um the price of consensus tokens like Ethereum or Bitcoin. How much is somebody willing to pay to get a trustless record of events?

Um, the reason I say they're only those two sources is because if the price of Ethereum went to zero, the price of every token on Ethereum except the USDC uh and USDT would also go to zero and perhaps a lot of tokens outside of Ethereum as well. And so in in many so they are in some ways intrinsically fundamentally linked. They're sourcing their value from the same same origin source. And what's missing from here is anything that touches the real world. real world assets, uh, intellectual property, real property, um, certificates from the real world that have have meaningful value. Uh, you know, the the the complicated network of obligation and responsibilities that binds us to real world institutions, real world assets, none of that's presence on chain right now. And while

that's the case, web 3 will never be able to scale beyond um, synthetic tokens and and these quasi casino games. And privacy is essential for solving this problem because privacy allows you to put identities on chain and prove things about yourself to smart contracts forward. So how do we kind of pierce this synthetic web 3 bubble? How do we make web three more mainstream again? Well, in my opinion, it's pretty straightforward. Step one, you need to be able to interface with web two meaningfully. As in, I need to be able to talk to a smart contract and prove that things certain things have happened in web two. Things like um I can't read my own slides. Yeah. So like getting

getting data from web two servers, piping it into web three or being able to use web two authorization to solve account extraction. Um but most importantly providing data provenence. So being able to uh um yeah like do things like prove I own a Twitter account that has over 100 followers. You can use that for some basic basic civil resistance. Uh prove for example I possess a account to um uh for the um HMRC taxpayer website which proves which proves that I'm a UK taxpayer. Um then once you have those kinds of addestations on chain securely so when I say secure when I say private I mean this stuff is encrypted and you're proving the the unencrypted data to smart contracts but you're not revealing it to the world. Once you have that you

can start to link accounts to identities and you can start to do this in a much more holistic way than um having to like rely on a unique source of truth. So for example, I would say the the alternative scenario with something like worldcoin where um your you have the the world or which is basically a very unique addestation for your proof of humanity. What I'm talking about here is much more holistic where your identity is composed of a very large diverse set of sources that are coming from independent um uh applications, products, services. Um and this unlocks decentralized applications that can interface with the real world.

For example, I want to be able to go to a smart contract and say uh and and not say like I am ox 3 ffq22A or whatever the hell my hex account is. I want to be able to say hello, my name is Zachary Williamson. I am 37 years old. I am a citizen of the United Kingdom and I live in London. And I want the smart contract to know this so that it can act on that information. Um this is this is the fundamentals for how you interact with with the real world from a blockchain. And once you have that, you can start to establish establish meaningful digital sovereignty. And what I mean by that is is is establishing precedent that um uh digital ownership of digital assets implies um a legal

claim to property in the real world. This is the in my opinion hardest part. This is the regulatory part. This is the part that is completely independent of technology. But we need to demonstrate that this kind of um these these kinds of things are useful and necessary and add value first. And that requires steps one and two to be fulfilled. Privacy technology bridges this divide. It bridges the the gap between where we are today where we talk about these these these ideas. We've been talking about them for 10 years and the reality when none of them have really been executed successfully on chain yet. So privacy is decentralization um highly aligned uh because if you um if you build this kind of ecosystem right um like for example the

Aztec network where you have DAPs that touch real the real world they're they need to understand things about who you are um which would normally require um the possession of a lot of sensitive information to remain custodial these these identity standards must use ZK privacy uh because otherwise your your application your service is now well it's custody of of it's taking custody of it sensitive information and to remain composable the data being proven must remain client side what I mean by this is I want to create a universe of applications where the um your data remains client side you have encrypted attestations about that data that is on chain and then you have smart contracts that can interact with this these

attestations in a permissionless composible way that way you can create applications product services wallets that are non-custodial can still do very advanced compliance checks. Um, and but that requires super advanced EK. You can't do this with data custodians, for example. And so, how do we build this missing link? Well, you well, spoiler alert, you Aztec, but I'll break it down. First of all, you really need um a programming language that is adapted to the semantics of zero knowledge. Um, that enables app developers to produce um complicated applications without having advanced cryptography knowledge.

um trying to abstract as much of this complexity, this circuit writing, this privacy as possible. That's what we did with Noah. Um uh it's uh one of the fastest growing ecosystems in web 3. Um uh we have a knock on later this week. So uh um come check it out. Uh yeah. Um and it's a um language um it's a platform agnostic exe programming language. And then once you have that language, you can start you can integrate it into a meaningfully private blockchain. Um and by that I mean uh a blockchain where the actual state model itself is um constructed to to enable strong privacy because it's not just a matter of taking an existing blockchain

architecture and adding ZK into it because that doesn't really work. Um for example, if you take an account based um architecture like Ethereum, let's say everything's encrypted with ZK. Well, if 50 different people send me money, then my account balance is going to update for every transaction. And even if my account balance is encrypted, you will still see a single encrypted variable in that database update for every transaction. And so you will be able to reconstruct the transaction graph. Um you you you need to change the state model um for uh to to to actually add privacy and you need to change the transaction model. You need to have this concept of private functions and public functions. And so um we we figured that it would actually be instead of

retrofitting privacy to an existing blockchain, it would be simpler to do it all from scratch. And so here we are 7 years today with the AIC network. Um and then on top of that all you need a very state-of-the-art um cryptographic engine to enable these advanced zero proofs to be constructed on user devices, client side hardware, things like phones. Um and we have some exciting announcements about that soon. uh because yes client side proving is very much a practical possibility. So I want to talk a bit about Noir um and how you how do you actually um I mean it's DAPCON right? How do you build DAPs today that use privacy? Uh so no has come along leaps and bounds since we created it in 2021. Um it is a feature reach rich uh rustl like programming

language visk. Um it's optimized for fast client side proof generation. Um we have no 1.0 released lots of advanced libraries and an extremely um vibrant developer ecosystem. Um uh honestly it's it's it's it's uh grown far beyond my original expectations. Um it enables composable privacy. Um because every hang on this slide's out of I'll go back to that. That slides out of order. So here's just a few examples. Um I just pulled these from mostly from no hack. It was a hackathon that we ran with um many like dozens if not hundreds of submissions. Um so you know things like ZK fog of war games that you can play um ZK drop which is basically a way of

performing air drops um privately so that you you can um hide fundamental information that would could be used by market manipulators. Um you can make it a lot more trusted. ZK passport which is uh available on the app store today. Um we have yes apps on the actual app store that use advance your knowledge allows you to do identity attestations um whilst keeping your data client side. Um things like um whistleblower websites things like being able to um try to like um uh push back against the reproducibility crisis in scientific research. As a former scientist, this is something which is very meaningful to me. Um uh and that's just like that's just the the tip literal tip of the iceberg. I could spend an hour talking

about um all the interesting no projects that have been built today. Um uh but I'll spend a bit more time talking about it, you know. So we have um on top of all these hackathon ideas, we have a lot more like serious ideas. Things like trustless peer-to-peer on and off boarding with the with Europe's open banking API. So you can genuinely trustly exchange fiat for crypto. Um uh bank grade private security tokens. Um, I've already mentioned in Zika Passport, passport grade onchain credentials, anonymous social media posts with an oncast. You have trust as piece of email with Zika email. And it's a very old screenshot this one.

Obsidian, we have privacy preserving wallets which um on the asset network I I'm very hopeful but are going to be the seeds of real meaningful DB banks um where you can provide banking services to people all over the world particularly in the third world that um uh don't just mimic regular banking tech but with synthetic tokens but actually provide you with the real real world services that you want from a bank account. So, this is an old slide from our road map. We're we're we're we're past that now. We're auditing. We are we are audits underway now. Um and uh is going relatively well. Um so, yeah, we're on track for um our road map, which is rare, but we're on we're we're on

target. It's nice. Um and yeah, get involved with Noah. Uh I don't know how many people scan QR codes uh in conferences. I don't even know if this code is valid anymore. So uh yeah, some feedback on that would be very helpful. And what where's Aztec in 2025? So now it's just a programming language. It's just the programming language. Aztec is the actual network. And um happy to say I've got some real updates uh this time because because since I last gave a talk about Aztec, our test net is live, public test net, a real test net, not some marketing thing like this thing is fully decentralized. Um we've coordinated network upgrades um through it through our sequences. Um we have you know um fully decentralized block

production, sequencer selection, validator selection. Um it enables genuine feature rich endto-end encrypted web three transactions. Um and uh yeah you can you can do it all with uh all with client side proving. We're focusing very hard on improving the uh the timings of this. Like at the moment with our very rough cut public test net, you can do uh proofs of private transfers in less than 20 seconds. I think I saw on Twitter somebody did it in 12 seconds the other day. Um and yeah, you can use it on most phones and laptops. Um you know, this is our playground which just shows some of the basic examples of what you can do. Account abstraction, we had that built in from the from day one. Um so you can use any kind of author you want. It can be an Ethereum public private key pair. You could use um uh

you could use the hardware security model on your phone. Um you could even use OOTH if you want. Um as well as examples like private voting and private tokens. So this is a reality today. Um and we are yeah triggering our audits and ambitiously pushing to mainet again. This is uh this is our what is this block height? Yes, look we make blocks and and continue to make blocks. Um there was a little bit of a network outage the other um but anyway yes uh this is all awfully decentralized. We're working on some of the stability king that's why it's test net um and you know to get to mainet our road map is fiercely complicated. we have to um build a lot of novel solutions across the entire technology stack for the

first time because no one's really done what we're trying to do here where you have a featurerich smart contract ecosystem like Ethereum but you have private state and it's fully decentralized um and it just works out of the box uh it's um a gargantuan amount of complexity but it's been seven years we're almost there now we're almost there um and so I just want to leave with um the note that Um, I think not just Aztec, but privacy technology in general, it's going to make Ethereum cyber punk again. Um, I was at a at a party the other day, uh, and speaking to a venture capitalist, um, who was not in the crypto scene. And she was she said to me, "Oh, oh, crypto. I I haven't heard from crypto in in two years. You

know, what's happened? Has everyone gone away?" And on reflection about this, I I my answer to her was, "Well, you've heard about me because I am effectively a fossil. no more relic from that optimistic time from 2017 when people thought that crypto could change the world. Um that's when I started building. That's when Aztec started building and um we haven't given up. Uh I know that a lot of uh you know um crypto has had it ups and downs lately and I think I agree very much with Vitalic when he once said that the greatest challenge we have in this industry is nihilism. the idea that this is just a casino and we should just make do with what the casino can provide. Uh I've never believed that. Nobody at Aztec has ever believed that. Um we

think that the original idea of self-s sovereign money of being able to provide advanced financial primitives to be able to coordinate human beings um through things like decentralized autonomous organizations. These are these are valuable um outcomes to pursue and and we can make them real. The problem from 2017 was we lacked the full technology stack to do it. We didn't realize at the time that you really need strong privacy technology to make this happen. But that technology now exists and and we're using it to build these much these very these humanentric networks where you know that you're interacting with human beings that where you're you're enabling people individuals to better coordinate the allocation and distribution of their assets where that where you people can be their own agents where you don't have

to trust third parties whose incentives you have no idea about and are likely not aligned to yours where your data is your own and you choose to how how it gets used and you don't just willingly hand it over to God knows who what who and for for for whatever purpose and and that we can like genuinely meaningfully add autonomy and agency into people's lives through this technology. Uh I still believe that and and um one day one day we will make make our make our voice heard collectively and and people will see that that this this this future can still come about. Anyway, that is me.

Thank you very much for listening. Thank you, Zach. Thank you. Uh, we have time for a few questions. We have one question down here or right there. Yeah. Hey, Zach. Great presentation. Um, you touched briefly on wanting to, I guess, deploy the test net completely decentralized. My understanding is you plan on doing the same thing for for mainet, something which I don't think really any layer 2s have attempted to do. Can you speak more to why you think it's so important for the Aztec network

to do that? Yeah, happy to. So, just to repeat the question, it's um we're planning on launching our mainet decentralized. No other L2 really does this. And why do we think it's important? Um, as much as I'd like to claim that I have, you know, like stronger values than than other L2s or, you know, like, oh, we care so much about decentralization. Well, we do care, but it's because the incentives are aligned. Um, we are a private L2. Um and um, a network like ours very much acts like the internet where um, you know, we want to make sure that uh, application developers have the tools and technologies to um, make make sure that within their apps um, good and act bad actors can be distinguished from each other. We want to make sure that users of the network know that they're not

helping bad actors. Um, but this is very much a respon a task and responsibility for the application developer uh and not the network. And for that the the network needs to genuinely remain neutral and um not have centralized nodes of control. Uh if we launch centralized then the asset network itself is an application uh and then that that that has many many downstream problems. If you're launching a scaling L2 that doesn't have privacy, you don't have this issue. And so it's much easier to launch centralized. And to be honest, if we could launch centralized, maybe we would. It's a lot easier. We we've had a lot of sleepless nights at Aztec because of our our um focus on decentralization.

But for me simply, it's because we're aligned. Like we need decentralization. Um and that's why we're doing it. Uh we had another question over here. Yeah, I had a question regarding private state discovery. Uh how should it be managed um on Aztec since when building a a wallet for uh pro programmable privacy lay layer one u or or or layer two. Uh a main concern is do users uh have to do their own private state discovery? Can they outsource it? Uh is it privacy preserving if they do it? Uh

yeah, good question. So how do how should wallets handle private state discovery? Um it's a thorning issue. So when we launched Aztec connect back in 2021, um we did have the system. It was very much like Zcash where users had to effectively download the entire chain state and trial decrypt every single transaction to see if it if if it if the if people were sending them money. that doesn't scale uh at all. And so um particularly with the transaction throughputs we're targeting, that's not practical. And so the question is what trade-offs can you make? The holy grail is that you use private information retrieval and fully homorphic encryption to do state syncing um by third parties offchain um where the idea is you have

some big chunky server that downloads Google state for you sends it to you but they're using fully homorphic encryption so they don't actually know what state you possess that's not really practical with today's technology so what we're doing is uh we call that handshaking effectively what it is is that we expect the sender and the recipients to communicate a bit of information to each each other through side channels. Effectively, the sender sends a me a message to the recipient going, "Hey, expect something. Here's here's some encrypted tag and then the the recipient can use that tag to basically drive a bunch of identities that um identification numbers that they can very quickly and rapidly scan the blockchain for. So, um it does leak a little bit of information particularly if that side channel gets leaked. Um,

effectively it means that if a side channel gets leaked, observers will know that um, a specific individual will be expecting to receive notes of some description from somebody. But we feel like that's a relatively reasonable trade-off. Please, a round of applause for Zach Williamson from Aztec Lab.