ZKV presents Privacy in Cosmos: DeFi Edition - Stablecoins with Terra

Transcript

hey guys um i'm just uh setting up for the panel actually which is going to be right after me and um the panel is on privacy obviously and on stable coins so i just wanted to give a quick overview of um of terra to the extent anybody on the on the session is unfamiliar and also um how how we think about privacy within tfl so for anybody who's uninitiated terra is a layer one chain that we launched in 2018 we are built on cosmos sdk and we use tendermint consensus and we've seen a lot of growth over the past you know few months even there's more than 12 billion locked in our staked assets as well as

roughly five to six billion on in tdl in our main protocols so we've seen a lot of good growth in in our decentralized stable coins as well as our financial primitives we're backed by some of the biggest names so i'm sure you'll recognize a lot of these names here but whether it be galaxy digital hashed arrington capital polytrain coinbase ventures we're very happy to call these our partners and investors so to give a very brief um you know deep dive into into terra at tara we like to say that our main product is our stable coins and everything we build is

essentially to make our stable coins more useful so you know at the outset it was a bit um contrarian but we felt that building a stable coin and a thriving ecosystem is dependent on having decentralized monies and we didn't see anybody innovate in the space so for the past for the initial couple years we spent a lot of resources to build our suite of algorithmically pegged stable coins as well as a use case for it which was the ewallet and payment gateway called chai that is active in korea so for for those unfamiliar chai currently has more than two million active users in korea

has a run rate revenue of more than two billion dollars and has been a source of inspiration for similar ideas to build out in different regions so we have you know apps like kado and alice and cash catapult and tick all all building in respective regions that they're based in uh off of a similar idea of enabling stable coins for everyday use to hone in on the stable coin themselves we are algorithmically pecked stablecoins so we like to think of terra stablecoins as being very different from the other solutions that are in the market so obviously tether and circle are the leading stablecoins and they are fiat backed and by their design there is risk

of centralization whether it be the fiat that is deposited into traditional institutions or into securities that are traded in traditional finance such as commercial paper or corporate bonds for ust and our suite of stable coins they are all fully decentralized and dependent on really on-chain parameters and what that means is for for instance ust which is our largest stablecoin the mechanism for stability and maintaining the peg is set by game theoretic incentives so on chain you can always redeem a dollar's worth of ust for a dollars worth of luna and what that means is

to the extent ust variates from the peg and let's say ust trades higher than a dollar people can burn luna and mint ust and sell that in the market to capture that arbitrage and to the extent that ust is trading below a dollar people can do the same and mint more luna and capture that market opportunity of buying discounted usd so under underpinning all of this is luna which is our secondary asset that weathers short-term volatility and personally i think there's a lot of elegance in the design of our stable coins and luna and in that luna weathers these volatilities and is enabling these

game theoretical incentives to play out we are very proud of the fact that um we've really never de-pegged by much you know i think the most recent crashing in may we depend similar to other stable coins but have really rebounded since and have maintained a very tight peg to the unit value of each and every one of our currencies that usd trades on and some of what that has been made possible by is our major protocols so for instance we have a protocol called mirror which trays synthetic assets and i'm just flying through these slides here and we also have a protocol called anchor which

is built on on a savings protocol that is a thousand times better than what's available in traditional finance markets and what these two protocols as well as chai have done is essentially build build a mechanism and an ecosystem where whereby there is organic demand for our stable coins i think there has been a lot of different attempts to build algorithmic stable coins that are decentralized which is really good but a lot of these efforts have headed that end as it pertains to shoring up a lot of organic demand for the use of those stable coins whereas for us we've really operated like an app factory over the past couple years

spinning up mirrors spinning up anchor and and have really created a need to hold ust because there are these different ways in which you can utilize ust to either invest in synthetic assets or earn you know 19 and a half or 20 percent yield fixed on your deposits um well what we'd like to really say and you know just to bring it back back to the topic of the session is we are truly decentralized and we believe that you know if d5 truly stands for decentralized finance it has to be built on decentralized monies so ust and our suite of stable coins enables that um i think many of the people who are

familiar with our ecosystem would know that today is actually the day that we are pushing out our columbus 5 main net upgrade so with that as as well as some some partnerships with cross chain bridges like wormhole we would expect ust to continue to flourish and really proliferate whether it be within the terra ecosystem or in the solana ecosystem on eth on bsc and our ultimate vision is to have a decentralized money that underpins all of d5 there's definitely aspects of which you know defy and being decentralized translates directly to privacy and secrecy and that's why we have a

partnership with secret network we also have had a couple protocols in our ecosystem come up to the fore over the past couple weeks whether it be terra bay or void protocol to build similar solutions for terrace so we're super excited about you know the road map for terra and i personally can't wait for there to be more privacy within within our chain as that would be super beneficial for me personally too so and i know that we're kind of tight on time so i just ran through those slides but i'm happy to take any questions or leave it to the panel yeah so i actually i mean i want to for this panel it's a little different

than the previous one because we're actually going to be inviting three teams up who have built either with tara or ontario in terms of privacy we want it since this is privacy this is like the zkv presents privacy and cosmos but defy edition we definitely needed to touch on this topic of stable coins at the same time i know that terra itself is in no way private do you maybe before we invite everyone up though do you plan on ever being in any way private or is that such a no-no because it like creates way too much like regulatory legal issues no um i think we've been public about this before but and i think this is applicable not just to us but a lot of protocols building on d5 which is

this the future of d5 should be that it is truly decentralized and i think over the next couple years we will see a lot of um developments in endows to truly enable the future of d5 so you know it wouldn't be a surprise to me if if us as an organization follows a similar path to shape-shift or maker in in dissolving and handing over the reins to our community and we're already seeing a lot of that happen because you know i want to say when i first encountered terra there were two protocols right like chai and anchor or chai and mirror and now anchor um but there's hundreds of teams building on terra and we're actively taking

initiatives to continue to decentralize so um in addition to us i would think that you know whether it be secret network or whether it be void portal all these guys are thinking with that very specific goal in mind of only being here to set the foundation and letting the ecosystem do its part that's pretty cool all right i should probably invite the other speakers up uh to this and in the meantime i actually have one other question for you but it might be i mean so this is a question if you had an algorithmic like you mentioned there's some algorithmic stable coins in like that you've created how do how does that possibly work over ibc like does it have to always peg back

to something that's algorithmic in one chain this is what i'm not entirely clear on because like i just can't imagine how the how it works when you move it outside of its network yeah so so if you think about the monetary policy of ust and and it's kind of our other asset luna um it only needs incremental um senior orange if you will to maintain the peg so it's not as if just because there's national export of ust onto different chains or via bridges that having too much of that spread away from our native chain exposes us too much risk because all it takes is let's say incremental amounts

of luna to be burned to bring ust back down to peg or vice versa um so you know i think there's a lot of comfort in us having kind of the depth of liquidity obviously on our chain but also knowing that the variance can be kind of fixed by by activities on chain as well cool all right i've i know we're i'm just waiting for some folks to join okay here's one person joining hello how's it going very well all right we have another person joining let's see if we i think we have one hello hey

how's it going there we go i think we have our last uh participant now hey cory everybody so yes as i mentioned this this kind of panel is a little different what i want to do is understand what each of you are working on in turn and like kind of how that relates to tara and to stable coins and i know that they're all privacy projects here today so i think yeah i'd like to maybe get started let's start with void what is void and and maybe quickly introduce yourself yeah of course so i'm a bit squared working at on on void protocol at the moment uh still very very new uh we sort of noticed that

terror was a little bit lacking in the the privacy space and we're big believers of decentralization and obviously privacy comes kind of side by side with true decentralization so we're really keen to get properly stuck in really the base idea is still building a mixer but we're really really focused on trying to minimize the uh like the opportunity loss or the opportunity cost loss from essentially locking up your funds for six months waiting for them to become anonymous uh so we really want to make sure that people aren't being penalized for choosing to try to

anonymify their money really hmm when you talk about your so you're thinking of doing it's more like a mixer is it in the style of like tornado but only focused on a stable coin so it is in the style of tornado uh we essentially are mainly focusing on usd because uh well initially there's the anchor and on terror already built ready to be utilized such a beautiful like nearly twenty percent uh return uh so we're really hoping uh to be able to actively utilize that on the protocol uh plus other mechanisms which can offer people good yield while obviously anonymifying their funds and protecting themselves as well is there any special

challenges that you've found building this on terror uh there will be challenges in the reward claiming system okay uh we want to be able to obviously keep that completely anonymous and not have the yield just tie up exactly to what uh you already were looking at but i think we actually there's probably more so many more advantages to being on this network uh in terms of the collaboration potential as as as joe was saying like we're essentially building like the tools for the foundation and the way we see it is like especially being like a mixer being quite a basic simple principle really if we can build the foundation

that allows other protocols to interact and use the anonymous features that we can provide through our pools then it's going to be really cool that's that's what we're excited for cool all right so now i want to hear oh somebody has some funny background noise i don't know if it's your chair oh that was the chair but uh i want to hear from you i'm not going to know how to pronounce this manager home uh manga just call me manga manga cool um sorry yeah do you want to introduce you're coming from tara bay right yeah definitely cool so why don't you tell us a little bit about this project all right hold up i'll try to share my screen real quick because i got a

sort of uh world's first uh for the road map we got well it's not actually first we posted a discord before but yeah cool to share screen there's just a screen with a x through it yep i just had to find the screen i got small eyes i'm sorry so there we are um so where the bonus is basically where we are right now uh we're trying to get the white paper ready and just uh you know just put everything together we want to actually do yeah but do you want to tell us what you are what are you absolutely perfect so basically basically where you're uh ever your bitcoin mixer that you already know from

all the other bitcoin mixers but we take advantage of what terra has to offer and make sure users are incentivized for providing a pool of money that we can shuffle around to keep things as private as possible so there's uh incentive yeah there's incentive rewards there's uh we were planning on a burning mechanic for um then mixing lowering mixing fees uh yeah that's very nice i see one of your slides here has this question about like ibc and this is something we haven't really talked about i also didn't just mention that with void like how do you

like what i see here is something that would sit on tara specifically but what does happen in in the case of these when you're trying to get like would you actually be bridging yourself to other networks or would everything happen on the terra network and this actually goes to both the view to bitsquid and manga i don't know if they said that right yeah no you did it's okay cool um so uh we're still looking at this but this is only like we put this as uh up there as vision because we don't want to get the blade and the swap mix done first got it um but after that we'll be looking into the the whole ibc thing because um moving things

into different chains perhaps is definitely adds another layer of privacy we don't have a specific method of implementation yet though and as we learned it might be an added layer of privacy but it might also not be some reveal for the minute you leave what about you uh bit squid from void and then after this i'm going to talk to you carter yes so at this stage 100 planned to just be on the terror blockchain really just focus on that one use case like we have been long time fans and followers of secret network as well and absolutely applaud what's going on over there so

um yeah we're focused on just providing a solution just native to the terror blockchain and yeah just keeping it simple but giving people access to good yield very cool carter i want to hear from you let's hear about secret we have had you speak or not you but assaf from the secret team spoke at the previous zero knowledge validator uh cosmos event but not in the context of tara but why don't we hear a little bit about secret and what you guys are up to yeah i think the opportunity with ibc for cross chain smart contract calls is going to be super super interesting with how terra applications are going to be able to interact with a privacy layer we're already seeing like wrapped privacy for

ust which is amazing right now in d5 it's very clear that institutional investors retail investors in the next like two three four years like we have to have privacy attached to d5 like we have whale trackers more and more people are being pushed to otc so i think one of the biggest visions of secret network is build out an entire application layer that starts private by default public by choice um it's re i think a lot of these talks today they're trying to solve the problem that we have these transparent chains and we're trying to make things private and so trying to go that route i applaud the efforts and there's going to be amazing innovation we see on that front but the best way is starting

private by default and then you know moving to transparent chain in many ways so um specifically one really cool project i'm the lead economist and researcher for shade protocol we're actually building an algorithmic stable coin similar to the uh tara luna model so that's super fun we have that in the in the works and also privacy preserving synthetic assets so carter what's what's the relationship between secret and tara today like how would it interact with secret or vice versa i mean we have the we have a bridge in the works so columbus 5 hooray right plus plus ibc and it's going to give people the opportunity to move

ust into a privacy preserving version by default so the dream would be like really two options people start building applications like tied to the real world on seeger network that utilize you know ust right that would be a great option second option is we utilize those cross chain smart contract calls to do something specific with application data like authentication stuff like that just on secret network with a cross chain call but then we still have like like the public version of ust being utilized so i think a lot of people as ibc is emerging are realizing there's a crazy amount of opportunities with cross chain smart contract calls but we don't fully know what it looks like yet and that's part of the fun right like it's it's all going to unfold in the next year or so so you just mentioned though

like secrets privacy by default but when you're interacting with these non-private chains what does what does that do like how does that actually affect secret and is there a way for people to actually trace through it potentially oh for sure i mean the instant you leave like a privacy preserving ecosystem like you're shifting tech stacks you can't just like magically have your token on the other end have privacy so i think like with penumbra and some of these other mixers i think there'll be an opportunity to have a layer of secret network mixer ust i think that'll be we could see an entire ecosystem emerge on that front but you are correct like you can't you can't just magically wrap privacy onto public blockchains yeah there's

solutions for it and we'll we'll see what happens is there any way that like terra bay or void and secret have some sort of interaction is this something that's being should they should reach out to me guys we got some amazing developers on secret network i'd love to love to see what we can make happen yeah and i also i mean kind of going back to the topic we talked about in the previous session with bridges you're building these bridges like are your bridges special or would you say like you kind of go into in secret you go into sort of a transparent format and then bridge over well we have like one of the world's first privacy to privacy bridges so people don't know but there's an xmr to secret network bridge and monero to see your network bridge so some people are

calling it dark phi like some some very interesting stuff uh i know it's an interesting name we've also seen there's a bitcoin bridge coming out called um shinobi protocol and they're trying to do a trustless bridge with like uh contract to contract calls with like hash verification there's some really interesting architecture emerging that utilizes sgx utilizes the fact that we have like the kind of a guarantee albeit there's plenty of privacy maximalists out there that are concerned about sgx totally fair criticisms but we're building we're doing the interesting applications and uh we're seeing a lot emerge on that front and i was actually about to mention that too like you know at the beginning in sunny's talk he was kind of going through a run-through of these different

privacy techniques on the mev front sgx is being used by some teams for that um i guess i have two questions here is like are you doing something with mev does it matter in your context and also are you looking for alternatives to sgx ever mavs just like solved period like when you're private by default like all of our applications front rings just like literally not a thing so that's why it's interesting to watch these transparent chains they're desperately trying to like solve it and then it's just like our application layer we just we just it's just not really a problem okay and then the other question was are you ever gonna not use it i mean the cool part about all this stuff is like you can have smart contracts on secret network that are totally transparent if you want yeah

like you don't have to have it's it's up to the programmers you have granular control over what is and isn't publicly visible so that's that's kind of the beauty of it we give that freedom and that choice to users but everyone collectively likes what we call the snip 20 standard it's like an erc20 token equivalent but like privacy preserving um and yes patrick just linked an article where i talk about sgx and kind of that whole discussion if anyone wants to read that given that this is the zk validator event i do wonder if there's any zk or plans for zk in any of your projects we we talked with some people from zcash foundation at uh mainnet 2021 but this is huge huge fan of huge fans of zcash

so who knows where that could lead no no promises right now but like i think like the privacy narrative is gonna be so strong in the next year or two so collectively every single mixer every single privacy layer one layer two whatever have you like we all should push together to connect because it's it's just it's inevitable it's an unavoidable problem and there's so much value locked up in solving the privacy problem and so many people today privacy and cosmos are doing that so what about void and terra bay it's a good question honestly um not a hundred percent sure yet um we are probably been three weeks since we formulated like the full idea plan and

started hiring um but yeah much to think about so but what kind of privacy techniques are you looking at like do you have a few options on the table that you're thinking about yeah um really sorry um really just using like the essential idea of like the base chunk deposits um to give the set amounts and then of course after being stored for x amount of time um then yeah what about uh manga for terra bay

yeah you said it right don't worry you can see every time um it's uh the question was if we're gonna implement zcash or no if you're gonna implement zero knowledge tech basically knowledge tech or what kind of privacy tech are you thinking of exploring uh that's also something i'd say for the future right i mean i don't really see how we would implement something like that into like your standard bitcoin mixer with like reward incentives and uh and a swap involved but um it's it's never good to say no i'm gonna just uh do my homework today

on how we could possibly implement this today there's a lot of people in the zero knowledge community which zkv is kind of like my at least the podcast that i'm doing and zero knowledge value that's like a lot of the people in our community are focused on zero knowledge stuff so you have plenty of people in this event and also in any of the other channels if you want to find out more cool so listen i don't know if there's anything else that any of you want to share but i kind of want to like i think we're almost at the end of this session um at the end of this event actually yeah is there any sort of last thoughts you want to share about privacy or

the projects that you're working on ortera or stable coins or ibc i know i know we labeled this as like specifically for stable coins and i think um it's it's one of those things where we cannot like if i went and bought an ice cream cone one day with like a stable coin and suddenly you know my entire balance and my entire trans transaction history since the beginning of time like we just we can't have that like web 2 has more privacy than web 3 does so it's it's we have to have privacy and i hope we keep having privacy and cosmos events because i think uh we're seeing institutional interest head in the privacy direction too so that's that would be my final thing check out secret network and uh

really really interesting talks today thanks so much all right i got i got something similar to that i recently read an article on how uh um i think it was a swiss insurance company it's now letting you uh pay insurance with bitcoin so they figure out how much net worth you actually have and uh it's a little that is it's a little poison pill right there that's interesting yeah definitely definitely so that's why we need privacy understood bit squid last thought yeah on that i think like when it comes to like the real world and privacy i think as soon as you want it uh people automatically assume that you're being nefarious or dodgy

but in the financial world i don't think a lot of people think what it means when you sign up for a bank and they've got 25 years of your entire life just automatically there like your entire financial career um and there's no trend like well it's all transparent for them um which is no good for you know just a little guy then and imagine it was all transparent to everyone and now imagine you're a business i think that's where it's very very uh powerful little guy gets screwed or a hedge or institution that wants to take a massive on-chain d5 position but they can't do that when the whole world knows exactly what they're doing right like it's just you have to have privacy cool all right i want to thank all of you for coming on this panel i want to

say maybe maybe susanna you and i could say a few last words before we wrap up oops i'm just gonna thank you everyone oh you're mew today susanna yeah everyone was like disappearing as i was trying to imitate myself um but yeah thanks everyone so much for joining us and as i like posted in the chat below please fill out the feedback form if you want to support zk validator then you can stake your atom and osmo with us and um yeah we've got our website our twitter our medium and if you have any like questions that you want to ask directly then feel free to send an email

to the email address here um and yeah anna if you have anything else well i think i mean there's been a few questions about how to find out about our next uh sessions basically we do these events every quarter this was all funded through the hub and that was amazing and this is what you know we're basically here to create or like not only create but like push the privacy community in cosmos and that's what these events are really for so i'd love to see you back at the next one i think we're planning it for like january right susannah yeah so yeah it'll be about like quarter one yeah next yeah um and the other thing i wanted to mention is that in the events chat i also put something called the zk jobs

fair which we're actually doing tomorrow so this is a kind of this is separate from the zkv this is done through the podcast but there if you're like looking to dive into zero knowledge tech and work in xero knowledge tech this could be a cool event because we're actually we have a bunch of hiring teams you'd get a chance in a virtual environment to come up and like talk to them maybe as you're applying or you know maybe you've already applied you want to meet them before you actually set up meetings so this is just a cool way to get to know a lot of the projects working in the space and yeah generally follow zk validator steak dress and cosmos steak to us in osmo stake to us on anything else that might be coming in the pipeline and hope to see you next

time cool bye guys bye