The untapped potential of stealth addresses

Transcript

Hello everyone. Thank you very much. Ugu from Portugal. I've uh been at a bunch of crypto projects since 2017 and I'm now at uh Scope Lift doing a bunch of uh cool stuff including Umbra. And so if you need anything from Portugal, do let me know. Happy to welcome you into our country. And I hope this will be quite useful for you over the next year. And I see some of our customers as well such as project 11 or or former customers there. Cool. So yeah, a bunch of people think stealth addresses are not cool or that they are not that relevant. There's a bunch of great privacy research going on. And the goal of this talk is to briefly walk you through why stealth addresses are great

and just uh ask for the people in the backstage. Can you get the timer running please so I don't run um out of time? Thank you. Yeah. So, why are self addresses important and why should we all use stealth addresses? First, anyone here has used stealth addresses besides our great MC? One person. Damn. Like I did a version of this talk at a nontechnical conference uh early in January and I also got like one or two people but it was a nontechnical conference. This is supposed to be Devcon people. Come on. Uh anyway, the goal of this talk is for you to use stealth addresses. I'm not trying to shame you. So yeah, like the privacy

landscape on Ethereum is quite large and stealth addresses are indeed a subset of that. Uh for now, just around uh fund transfers, but hopefully much more in the future. And overall, stealth addresses are all about unlinkability. I'm going to assume people here know roughly what stealth addresses are, but still if you don't, this is rough overview of how stealth addresses work. They are easy, they are convenient, and that's what matters. There's a a bunch of a couple of ERC's that people can use to um quickly adopt stealth addresses, but it's a concept that predates uh Ethereum even. And uh stealth addresses are due to this rather mature privacy tech compared to all the fresh privacy

research that's going on and that's still untested and and and the UX for that is even clunkier than the UX for self addresses. So the the idea is is quite old. Uh of course it's not quantum resistant as a project 11 folks there can attest to um but the current team is is working on that and so it's quite an interesting relatively use uh technology even though only two people here at the stage have used it so far and more importantly they have real adoption. So between Umbra and Fluid Key, two of the most used uh implementations of stealth addresses on Ethereum, more than 1.2 billion, actually more than 1.3 because two months after this, after June, uh Fluid

Key uh updated this figure to over $1 billion have been moved through stealth addresses on chain and that's great. So what's not great about stealth addresses? Well, there's a famous study that many people like to quote that shows that without good privacy, IGN stealth address unlinkability can be broken because people can link what they withdraw from stealth addresses back into their own identities. For example, by withdrawing back into their wallets or by using specific um custom gas prices and a few other uristics that allow an onchain observer to link the stealth address back to you. And that's not good. So poor withdrawal patterns can

reveal you and that's not what you want. But fortunately this seemed to have happened much more at the beginning of stealth addresses back in 2021 when people were just learning and like adoption got uh better with time and needs still to get better and this it needs to be better at the wallet level because even though users are clearly getting more educated about stuff addresses as you can see in this chart still it's not a perfect scenario if you want to be um a privacy solution on on Ethereum and uh the 2DS Yeah, we need to incentivize wallet builders out there.

And someone was talking about the previous speaker was talking about the the the paper wallet or the plane wallet guy. And so there's a bunch of wallets on Ethereum that haven't adopted practically any wallet has adopted um hasn't adopted stealth addresses on Ethereum. And due to this, there's a lot that we should be doing. Um fortunately like the main implementations and clo is a very cool new wallet that just came out. They are all working on these. Umbra due to the uh privacy round that octant the quadratic funding uh project by by the go foundation did a couple of weeks ago. We fortunately won that and and with that funding we are going to continue and finish building umbra v2 and and that is going to improve on the

design a lot with these nudges to help people ensure they they move forward. So this is helping a lot but there's more to be done. Kaku is also helping a lot and it's going to standardize this. Uh stealth addresses are not yet on the SD key but they are uh planned there and so we are going to get that very soon and it's going to be a great step. But meanwhile all the other wallets that are potentially implementing stealth addresses and are a few small ones and we're trying to get bigger ones to do it. they can very clearly and and in a very easy way nudge the users to ensure that they are not unlinkled and that their self-address journey is quite easy and so that's our key message for today and during the octant round for example

we have a very nice interaction with a curvy team um which is also team developing shield pools and they suggested this idea and this is the kind of composibility we want to see from other projects in the space. So if you are building something on the privacy um uh corner of Ethereum or if you are building a wallet or if you're building building an app that can also integrate with self addresses this is like the kind of interactions we love to have. Um but yeah to conclude where does the untapped potential really lie. So the RC's that the scope lift team I've I've co-authored a few years ago with with Vitalik and Tony at at AF really allow for self addresses to go beyond funds transfer to go beyond payments and that's what we're building with Umbra V2

um and that's what we feel other builders can join us on the road to and coak is going to be key in this and this will enable all sorts of nice AI integrations if agents became the like the new UX defi uks new governance uh privacy protections and so forth. So yeah, to conclude, why why are we here today? Um why is Devcon happening? So that everyone can make yeah everyone can make privacy uh the default. That's kind of a key vision for Ethereum and um that's what we hope to to achieve with this talk. So let me let us know if you have any questions and I hope you come to Portugal soon.

>> Amazing. Thank you so much, Hugo. Please give a round of applause for Hugo. First of all, I don't know if you noticed how well thought out, how good these slides were. I was very impressed with especially a little unicorn like going across. That was very cool. Um, anybody have any questions for Hugo? One over here. Okay. >> Can I just ask the backstage to put my last slide so I can have my contacts there in case anyone wants to follow me up? >> Yeah. Wonderful. >> Please. So what is the single biggest thing that is stopping MetaMask like other big wallets from adopting this on by default? That's a question I would love to be answered as well. We also don't know and we would love to work with MetaMask. Tay if you are hearing

this talk please come and chat with us otherwise we can keep bantering on if security. >> Okay we got another one then last question last question here. >> Oh thank you. Um I was my question is about composability. How does composability work if you want like yeah the one address to follow its history? So I will say if I interpreting correctly it's not about composibility but about how can an address if they want reveal their links for some reason right is is that what you asked >> yeah yeah is there like tooling or frameworks >> definitely so like by design self

addresses are unlike uh uh privacy pools and and mixers allow you to selectively reveal your history if you need to. For example, if you need to reveal your history to your accountant, to your goddamn tax authorities, hopefully you are not in France. Um, then you can do that.