ZKV presents ... Privacy in Cosmos Live!

Transcript

one not yet okay do i need to turn ah there we are hello hello i think you can all hear me now yes any reaction can you hear me yes yeah okay you can hear me i think you can hear me all right so uh welcome to privacy in cosmos live in amsterdam it is very exciting to see you all in person um this event is brought to you by the xero knowledge validator and the media partner on this is the xero knowledge podcast my other entity that i work with uh yeah and i i mean this is very exciting we've done three online this is our fourth and this is the time that we

get to see you in person it's very this is the first time i'm doing public speaking in two years so it's also weird to see faces but very good to see faces so i'm happy to see you all of you so this oh uh hello so this event was originally supported by the cosmos hub we made a proposal about a year ago and this for context was just before the full launch of ibc um and the idea was to get funding for four privacy uh and zero knowledge focused events in the cosmos ecosystem um and to run those three online and then this final one in person is kind of the finale of the entire series um and after each event we've uh summarized the

reports online and you can you can also find um recordings available on the xero knowledge podcast youtube channel of all of this and again everything today will be uh streamed to that channel yeah and i think we're going to share that link on our on our twitter so it's at ck validator if you want to check that out so a little bit more about zkv and what we do um on the right you can see uh all of our team who are here today if you need anything reach out to us we're also actually looking at the moment for a research researcher to join the team as well as a project manager so if that might be you get in contact we support privacy and zero knowledge research and our mission is really

throughout all blockchain ecosystems to support those and champion them privacy is often a topic that isn't spoken about as much as it should be and is kind of under emphasized sometimes beside other things and we want to really be the advocate advocate for that and to push it to the top of the agenda we do that through participating in governance on different chains and we also support emerging teams in all sorts of different ways from funding and also connecting them with researchers other people who may be able to help them to um to launch sooner and we also launch all sorts of initiatives to help them help promote and fund zktech so a few of those initiatives so yeah this year actually starting last year we

did an event called zk hack that was a seven week on the first time in three week on the second time workshop series with puzzle hacking this was a great way to bring new people into the zk space we also have just recently completed but not yet published the open legal working group first report so we basically surveyed a lot of zk teams to find out what are the legal pain points what are maybe opportunities uh you'll be seeing about that you'll be seeing more about that soon and we just recently wrapped up the second zk tech git coin side round where we actually got a chance to get funding directly into the hands of the people building zk especially early stage projects so asides from that we also run validators on cosmos osmosis and very

temporarily evmos to um hopefully um watch this space um and uh we're also uh running a cosmos newsletter that's been going now for uh just over two months but really growing very fast definitely recommend um checking that out to stay up to date with what's going on and we produce some other educational research which you can find on our blog and also several other reports and that newsletter is cosmosnewsbyzkv.substack if i know that's pretty intense but it's a it's a good one so you might want to check it out so um in terms of this event the reason why we really initially um wanted to do this a year ago

is that privacy really is the next frontier for web 3 for adoption and it's something that's needed given especially uh recent events in terms of protecting people's privacy on chain and off chain um but that isn't getting the attention often that it deserves and it was very clear uh from what was going on in cosmos a year ago that it was really on the verge of an explosion of activity all sorts of people looking to launch um privacy focused chain zones and applications but these weren't yet getting the attention we thought they deserved and we really wanted to start to highlight what was going on in a way that allowed people outside of the existing cosmos ecosystem and to really see what was going on and so the idea was to bring together

people working on this stuff inside cosmos ecosystem as well as people working on privacy and zero knowledge outside of it and together into kind of one series of events and start to see what came out of it and it's really clear kind of a year on and that there's a lot more that's very visibly going on in the ecosystem i think this event compared to the very first one we can see how many um teams are now building things and all the exciting stuff that's happened which is just really amazing to see and these are just these are some of the teams who are going to be speaking today and whether you're watching here in person or on the live stream um there's going to be a whole series of amazing panels and talks um about everything that's

going on so a little bit of housekeeping about the theater so we're in the main stage right now there's a side stage where you have we're getting your coffee there's also this networking room with tables we have a lunch room which which is closed right now but will be open obviously for lunch and downstairs we have kind of this chill out spacey thing going on and there will be some bean bags and you can go hang out there i know a lot of people are maybe a little bit tired after the week of a real real world crypto if you were there so uh yeah you can get a little rest also i don't know if everyone is aware of this but there's actually going to be a dinner later tonight right here so you could i think the event ends at five and the dinner starts

at seven you can actually hang out in between if you want but you could also head home come back and we are going to attempt intergalactic karaoke i have not done karaoke in a long time i don't know about you but we'll give it a shot uh this is a something people maybe are curious about this is the wi-fi uh there is a sign just next to the bar in case you don't get this already set up but yeah guest add tobacco all small so to kick us off today um our first talk's gonna be from billy talking about sovereign interoperable privacy right here um we're then going to have zaki talking about navigating the cosmos and then federico talking about evmos

tokenomics we're then going to have a break and afterwards we'll have two stages going there's also going to be one through in the other room next door which is going to be it's a really nice area so stay tuned for all of that and with that i think we're ready to kick off yeah let's invite billy to the stage welcome billy [Applause] thank you very much thank you for having us uh good morning everyone i know it's early so uh try to make the talk very simple friendly lots of emojis um don't be frightened by a very long title sovereign interoperable privacy um let's get started

so quickly about me my name is billy renikamp um from louisville kentucky the home place of hell yeah one place of bluegrass music thoroughbred racehorses and bourbon whiskey so if you'd rather talk about that today instead of cryptography or crypto come find me i'm the cosmos hub lead at uh interchange so i leave the development of the cosmos hub previously i was developer relations at tinderment did a lot of work prior to that in the ethereum space on bonding curves nfts did web development and a background in electronic art so again you know we have a chill out zone come talk to me about any of that independently i have a nft gallery called folia.app and a generative nft project called clover's network but today i want to talk about the cosmos philosophy and why it really

makes sense for building especially privacy suited blockchains but what is the cosmos philosophy oh wow we've got the android emojis this is going to be exciting so cosmos is all about sovereignty and interoperability and i'll go into more detail about exactly what that means and why it really works but before that i thought i'd give a little bit of a tour some of the other philosophies from other blockchains so uh bitcoin you can think of uh as in some ways doing well on the sovereignty front uh you know they do one thing and they do one thing well and so that means that they have sort of uh everybody's sort of on board for the purpose of this blockchain you know it's just meant to be a store of value it's gold um what's missing here was the little uh

emoji with the british guard because as sort of like solely focus on one thing they are quite insular they don't really care about the rest of the world they say this is the only blockchain that matters this is the only thing that matters and so interoperability bridging to other blockchains you know interoperating was never really part of their their goals so they do sort of well on the sovereignty part you know it's their blockchain doing their one thing but they really fail on the interoperability aspect um ethereum you know they do a lot of things they they try to make everything happen at once which is great you know you've got like a stadium where you can all get together and when you're all in the same space it's really easy to interoperate you know you have access to smart contracts from smart contracts atomic transactions between them

but this doesn't really scale i mean you you know the sort of disaster zone when you have a stadium that's filled with too many people how bad it gets and the other problem with that is that unless you're in the stadium you don't really have access to the other people and the services that are happening there and when you try to scale that you get overcrowded block space and the missing emoji here of course is a gas canister that's sort of the the fallout that what happens when you're all trying to do the same thing at the same time whereas cosmos we try to hit the sweet spot of sovereignty and interoperability and quickly i'll talk a bit more about sovereignty so sovereignty means that you have sort of uh an application-specific blockchain it does the one thing that you want it to do and

it does that really well you're not sort of dictated by the other users on your blockchain who want different things from you in ethereum of course back in the berlin hard fork last year all of these aragon smart contracts broke because they changed the hard-coding gas costs for one of the transactions because it was just one user amongst many and they thought yeah this change is going to be better for everybody but if you're a small fish in this pond you kind of get wrecked inoperability of course is when you have an application specific blockchain you don't have shared smart contract zone in which everybody sort of has immediate access to each other and so you need to create protocol which we have is ibc in order to talk to other blockchains so this little diagram you can sort of see bitcoin kind of has sovereignty

lacks interoperability ethereum lacks the sovereignty everybody's trying to do their own thing but they're using the same space they do okay and interoperability as long as you're inside of their walled garden whereas cosmos prevents presents and promotes sovereignty as well as interoperability why this matters for privacy sovereignty is a stand-in for privacy when you have sovereignty you can change your blockchain in any way that it needs to and that's especially relevant when you want to introduce privacy to different levels of the stack so you can think of the cosmos sdk as this modular framework that's separated between the application layer the consensus layer and the networking layer if you want to add privacy to the application layer you're able to do all these sorts of fun things that we see

from different projects talking today like penumbra enoma secret network and nem they're able to sort of design their blockchain to have the features that they need specifically they can customize it you know so it meets the needs of their application it's application specific it does just what they need you can also add privacy to the consensus layer so there's ongoing work at osmosis to add um encrypted mempool so that you can prevent minor extractable value this is where you have the transactions themselves are encrypted until they're included in a block and only then do they get decrypted so you don't know what the other transactions are inside of the mempool this sort of modularity allows you to make changes at each level to these stacks so you can introduce this kind of customization there's also networking where nim and

palumbra have different aspects of cloaking or interacting at the network level adding cryptography and celestia doing uh god i just forgot the word erasure encoding uh not exactly at the networking level but but relevant to that sort of aspect of the stack um so all together cosmos is sovereignty plus interoperability sovereignty being a stand-in for privacy allows you the customization to sort of build your application specific blockchain to your needs and your users needs so how does that look here it's modular all the way down just a bit of an overview how do we achieve this it's it's the cosmos sdk is the application framework where you can see the stand in for the

cosmos hub it has a protocol between that and the networking label called abci and so this is a separation between what your application does and how the consensus is achieved and the networking operates and because all these separations means that you can make changes at one without having to make changes at every single level so it allows you to jump in just where you need to as well as ibc ibc we have a talk later today as well there's sort of a possible future development introducing zero knowledge proofs at that level as well uh so each of these pieces are sort of ripe for for targeting and elaborating extending and adding different privacy capabilities and then so

this is the way the world works right now you can jump in and do any of these sorts of things but what i'm really excited about coming next that offers another sort of interesting configuration is interchange security so interchange security is basically a separation of concerns from the uh validation and block production of your network from the application layer interchange security means that you can take a blockchain like the cosmos hub and use the same validator set there and the way that this works is basically every blockchain looking back to this set uses abci to communicate with the consensus layer abci says hey who's allowed to produce blocks on this network inside of the application state typically you'll see proof of stake module that says oh i've got a bunch of stake representing these different

validators they're the ones who are allowed to produce blocks that's great but if you don't want to build your own validator set you don't want to worry about that part of your application say your application is extremely focused on just one very specific thing you're like okay i don't really need a token for this or hey i don't really need to introduce this whole validation system or recruit all these people to operate it you're able to use the same validator set of the cosmos hub use the staking module of the cosmos hub that says these are the ones who are allowed to produce blocks and instead of using abci to talk to your own state machine that says these are the validators use abci to talk to the cosmos hubs set of validators they're the ones who are given permission to produce blocks on your blockchain so

your blockchain just does what it's supposed to do at the application layer that's interchange security that was kind of fast do we have any questions here please yep exactly um yeah actually so that's

yeah so the question was um restatement of basically entertained security but the question was if i have my own blockchain can i have multiple instances of my own blockchain with the same validator set is that kind of able to have validators work on both instances of the chain yeah so we like to say uh there's two ways to scale a blockchain there's vertical scaling and there's horizontal scaling vertical scaling is where you basically make changes in order to increase the number of transactions per second you know there's all sorts of um tricks bells whistles and band-aids to sort of maximize the number of transactions per second that we've seen across the entire blockchain space there is like a physical limit you know to how many transactions a single state machine

would eventually be able to do even with all these improvements and so at that point we like to think that horizontal scaling is the way to go and horizontal scaling is essentially taking one blockchain and just redeploying it you now have two instances so it can process twice as many uh transactions however traditionally if you launch another blockchain who's producing blocks on that network you know you need to start a whole new staking token you have to raise value for that if you want to have the same security and so instead of having to rebuild that aspect of the blockchain you can replicate the validator set with interchange security and that's basically how we're approaching the cosmos hub right now so a couple of the first projects launching with interchange security later this year are projects which could otherwise be deployed directly to the cosmos hub

now one nice aspect of that is now that you have two instances of these blockchains running you know you sort of double the capacity for the block space but the other really nice thing about that is that it decreases the surface area of complexity and faults on the cosmos hub so if the cosmos hub needs to be this super secure blockchain that's never stopping running you know atoms need to flow all day long how do you add more and more features without introducing more risk of a maybe there was a bug there maybe we're gonna have a chain fault you push it off to a separate blockchain so the cosmos hub all it needs to do is just export the validator set over ibc to this other blockchain and if that blockchain has a bug it stops maybe something bad happens doesn't affect the cosmos hub it's able

to continue producing blocks continuously shipping out you know this is the validator set once this other blockchain comes back online it's able to get all the sort of updates and keep running but it's it's uh sort of created fault tolerance around the sort of application state which is a really nice feature and exactly why we're sort of approaching it because we do think cosmos hub needs sort of the highest integrity of security should not be introducing unreasonable risks and pushing it out to interchange secured zones as a way to sort of be much more adventurous on the features that can go on the cosmos hub without introducing extra risks and this same concept can apply to any other blockchain it's a bit like multi-threading for a blockchain you sort of are able to separate the concerns and maximize the throughput as well as yeah like i said separate the concerns

question from will so one of the main reasons you would expect chains to uh continue to uh like launch with their own validator set as opposed to like inherit whichever one is the largest like the cosmos hub sometimes the validator set does more than producing blocks and um you know i can imagine that offers a level of complexity that they might decide oh my validators need to be much more than just block producers they also need to be x y or z and when those concerns overlap really well then i think it makes a lot of sense sometimes there's aspects of the token economics that really you know demand or or make sense when you have an independent validator set one aspect that i like that i think is

going to become more visible is actually the separation of concerns for what the duty and the job of a validator is so right now on cosmos chains the validators produce blocks yes but they're also governmental representatives when you delegate stake to your validator you sort of give them the ability to vote on your behalf now we have liquid democracy so if you ever disagree with what your validator is voting for you can put in your own vote that goes against it so you always have access to your own tokens to vote in part of the protocol but generally most people just let their validators represent them we've got a lot of feedback from validators that they actually feel conflicted about this you know they're top of their game producing blocks running infrastructure but that doesn't mean that they necessarily have a really well-informed decision or opinion about

like the application that they're running the d5 protocol itself you know they don't know necessarily the parameters for the inflation et cetera you know let them do the one thing that they're really good at running infrastructure and let the other people who are you know informed in the application perhaps be more present and uh active at the at the governance level and when you have a separation of concerns with interchange security you're able to sort of say okay cosmos validators you're you know the longest validator set you've been sort of the oldest the best you've you've made the trail you've made learned all the lessons like do the thing you're really good at produce blocks but let's have a separate governance token on my interchange secured zone and you're able to reproduce basically the same governance system except for instead of being a block producer and a

representative it's just representatives when you enable that you're actually able to expand the set of validators on that consumer chain is what we call the sort of chain that's consuming security in order to have way more than you know 100 200 300 which is sort of the maximum set of validators we see in cosmos chains today because it doesn't have the same implications you know when you have massive massive validator sets you potentially have slower block times there's more network congestion but when their only job is to be governmental representatives you know it can be sets into the thousands or more any person can say hey you know what i'm really active i really understand what this project's trying to do i'm going to register as a as a validator you know it's in quotes because they're no longer asked to produce blocks they're just

asked to produce governance votes and hey delegate to me let me vote on your behalf because you know that i'm spending every single day in the discord i'm spending every single day on crypto twitter and i'm really really excited about doing this work and what's kind of interesting is when you reproduce the governance system that we currently have these purely elected individuals are able to charge a commission on the block rewards you know they actually have a really interesting way of earning money for being active and part of the validator set you know hey let me charge 10 of every block award because i'm going to do a great job making this network valuable i'm going to make sure that we continue to sort of improve it in the right way they can get the delegations they can earn an income for this and all they have to do

is just care about the protocol they don't have to care about producing blocks because i think if you look around there it's actually really hard to produce blocks and you know we see protocols who are launching with thousands of validators or have goals of millions of validators and there is sort of this question like can you expect millions of people to be able to run really high quality infrastructure because it's not uh it's not nothing to produce blocks so um it's another sort of nice nice characteristic that comes out but again there are certainly lots of value in launching the traditional way it's new technology you know i think everybody's always a little bit nervous about trying things out new but um i think we're going to see a nice sort of uh testing ground where those new ideas uh show their value

any other questions that went way faster than i thought i'm really sorry i uh didn't get we're on time look at that amazing cool um well thanks very much uh look forward to the other talks today and all the other projects coming up [Applause] all right next up i want to introduce oh i'm sort of not on the stage next up i want to introduce uh zucky who's going to be talking about navigating cosmos and yeah we found the mic for questions just for future q a's uh yeah it's this little thing just be sure to say the question into that so that we capture it for the live stream cool

hey uh thank you very much okay so this is a talk that is tangentially related to this the topic of this conference which is the question of like how do i actually build something in the cosmos um and i think like one so like 2021 has been an enormous it was like an enormously successful year for cosmos the ibc vision like finally came true and it basically did everything we we said it would for the last five years um which is kind of wild but and now we see lots of lots of people building new zones lots of people employing privacy tech i'd say one of the things that we do the

worst in cosmos is it is extremely hard to figure out like how do you get all the knowledge to build the thing that you want to build um and the people who are so far been most successful at building things in cosmos tend to be people who have been in the ecosystem for a long time who worked at tendermint during the like when we were like sort of building all the uh initial pre-launch things people who are like uh associated with the icf or an existing validator um these are the you know these are the people who've been building in cosmos so what i'm gonna try and do in this talk is kind of explain how does building stuff on cosmos work with some goal of trying to make it more approachable to people who aren't like

already in our social network uh of people who like can like help you navigate um so cosmos is like highly decentralized there is no uh one labs company that like coordinates all the building that does all the all the business development um like there isn't probably there there isn't even a single organization that probably has like the entire top to bottom stack of how everything works like in their institutional knowledge um like everything is highly uh i also think it's like very good that like it's very good for like resilience um this project is also essentially seven

years old um like 2014 is really the origin of tendermint and the cosmos idea and the world of interoperable blockchains and so typically when you're when you're building in cosmos you will encounter situations where you have to like cross from like domain expertise to domain expertise to domain expertise you can't just find like one organization partner with them and expect them to uh sort of help you so we're going to try and figure out like in this world like how would you build something on cosmos um uh uh these are like common questions that i hear um like here are a bunch of like i like i want to build thing like i've

discovered that i am at like some sort of technical impasse i don't know what to do next um this doesn't even get into the question of like how do i get funded though that has like largely become a much easier question because there it's like no longer anti-consensus to fund fun cosmos things um i don't think that these questions are like the only questions or like uh the most important questions but like basically like uh for my little segment of like trying to help people build on top of cosmos this is a lot of i hear this a lot the other thing about these questions is they don't tend to have one answer um there isn't only like part of this whole

thing about sovereignty interoperability is there are like very many answers to all of these questions like i want to write an application that interacts with ibc and like want to do it like relatively quickly like you could write your application as a cosmos sdk module you could write your application as an evmos uh smart contract you could write your application as uh as a negoric smart contract you could write your application uh in rust on top of cosmosome and like these are all answers how would you decide how do you like me decide in this trade-off space um so why um and i think there's a like to go even further down the rabbit hole as to why

before i try and answer this question is the way cosmos achieves decentralization is we decouple research implementation and go to market um at like a sort of very profound level um if you think about for instance um the the the life cycle of ibc right it was um most of the core research was done at like informal and the interchain foundation going back to like uh like extensive research on tendermint like clients then implementation again was like split up among multiple organizations and then go to market was basically done by osmosis

so like if that's a very unusual pattern in the technology industry it's a very unusual pattern in the blockchain industry and it like represents like the fundamental decentralization of cosmos and like wall um well well the story of like decoupling research implementation and go to market for ibc or like for ics for like token transfers over ibc is basically done um we are still like there are many ways in which this like is in like in an intermediary state so like uh the auth z functionality for instance which lets you delegate account functionality like the implementation is done and shipped has go to go to market is still like in its early stages and there's like

various validators like figuring out uis and stuff like that and eventually someone is going to nail it i think there are some things like inner chain staking where we're trying to do a very sort of tightly coordinated go to market but that's more the exception than the rule in the way cosmos is like builds so you as a builder should not feel like you have to start at the beginning at the research stage or that the people who are doing research on something like abc i plus plus are going to do the go to market for it because like historically that's not how things worked um so you as a builder should feel comfortable jumping in at any stage of this process and being like hey like i see you have

been researching this stuff i will work on an implementation uh i see you have built something uh we could work on i could do it go to market um this is a is a sort of unique thing that exists within the cosmos ecosystem where you can grab these pieces of open source technology that we all build we are all basically fully committed to building in the open there's very little in cosmos that is like tightly siloed in some private repo that you have to like ask permission you can just you typically like see what it is that we're working on uh and jump in um so yeah this is the okay so the other thing

is cosmos has a lot of documentation like tons of documentation documentation and source code documentation in the tendermint spec repo you know there's like a 20-page ibc spec but i've basically seen very few examples of people succeeding in this ecosystem self-onboarding through our docs um like the docs serve a purpose um but this is not like you can't do this via documentation um so one of the most powerful things to have in cosmos is mentors um there are a lot of people like basically i would describe the like standard way things get built on cosmos

is people find mentors in the who have like domain expertise on the things that are fake are providing like uh who can help them with like architecture help them with the trade-offs of like do i build my thing as a cosmos sdk module a causalism contract an evm smart contract um and this is very much like the nature of cosmos so how do i find a mentor and this i think i'm gonna try like this part of the presentation is an attempt to like sort of like kind of list people who would help with like different mentorships and like sort of different technical verticals uh it cannot be a comprehensive list i probably i almost

certainly forgot someone like i just put this together in the last like two days also i'll probably give this talk again um uh so it'll get better over time um but like there are a lot of people sort of sitting in this area of the room who like know how to build stuff in cosmos and you know you should take advantage if you uh are sort of not in the tent right now to like meet these people build relationships because they'll also be the ones to help you find like uh uh so yeah people who have been building like the sort of core cosmos community have been working on this for something on the order of four to eight years um so there's like a huge amount of context um that like has been built up like they're they're basically like the only things that are the only blockchain projects

that are as old as cosmos are like bitcoin ethereum and cosmos like we've been at this for a very very long time okay so like how does this how does like what is the general process of working in cosmos uh the general process of working in cosmos is um uh we set up a shared slack or a telegram group or a discord we recruit we like try and like you find one person who kind of knows uh the sort of cosmos landscape of people and expertise and then we try to like kind of like uh bully invite invest make do deals like do business

development um um and then we uh uh uh sort of allocate that and then we start to have regular calls about like a given project uh like there's some regular touch point that gets built up everybody hates more calls but like this is seems to be the the best way to like maintain technical momentum over years um so there are like generalist cosmos experts um and it's like um when i say generalist cosmos expert it's people who have some familiarity with like almost all of the pieces of cosmos um again not a comprehensive list but like uh you know

this is like it's very very helpful to like have access to the generalist cosmos experts um and like if you kind of look at like what is going on in cosmos there is a lot of like uh there's a lot of kind of trying to like get access to those people find who to talk to um and um in order to sort of be a generalist cosmos exercise you probably have to know a significant amount of about how tendermint works you have to have like significant cosmos sdk dev experience and you need to have a significant amount of ibc experience at this point um otherwise you're really not going to be able to help um but the generalist cosmos experts are kind of the uh just sort of like the

sharp end of the spear um and frequently like they also are sort of overloaded by like the sheer number of projects that they are like helping involved in advising et cetera so this can't be the entire world um and so you know all of these people are very active in the ecosystems but they also tend to have projects that they are like playing like executive level roles in um and you know people are busy um so yeah i'm like i'm gonna give peoples like some combination of names handles like it's hard to navigate the space um you can definitely find me online uh if you actually want to be like hey like how do i get in touch with this person

um the cosmos sdk is a uh is a little bit different because it is much less dependent on mentorship there are a bunch of sharp edges to the cosmos sdk especially around like how do you upgrade um from like one version of your module to another version of your module but like on the whole it's mostly just like a a process of sort of learning as you go ibc on the other hand has is like a is a extremely complex protocol where there's an enormous amount of domain expertise and people are able to pull off like crazy stuff um like uh you know getting like when like

uh juno was restarted in order to update the ibc channels you had to pull blocks from like the pre-crash version of the like pre-security vulnerability version of juno and the uh post-security vulnerability version of juno uh and like push them over an ibc channel to update all the ibc channels and like revive the osmosis like uh token trading for juno and like the ability to like understand how like all of these pieces fit together is extremely domain specific um i think like building new ibc application protocols interoperating smart contracts with ibc uh doing ibc state machines that are not based on tendermint or the cosmos sdk all of these things hugely domain a huge amount

of domain expertise that is like slowly being built up and slowly being disseminated into the world there's still like a lot of a lot of like missing pieces but like help is available um until recently i would say until basically like maybe the last few months i would basically say that building a non-cosmos sdk sdk tendermint app was basically like not something that was had was like something that was a well-described uh process it's a thing that a lot of people are interested in um because they want to bring code that was written in like other ecosystems they want to write their application in rust um they want to do they want to use advanced cryptography

um it's becoming much more approachable to do this because you have like enoma and penumbra building uh with open source repos and like being able to see like how they are solving all of these problems and it's actually becoming like much more likely that someone someone could succeed um bridging is like another uh sort of huge topic so you want to reach like virtually everybody who builds in cosmos kind of comes to this question of hey uh like ibc is great um the ibc ecosystem has many billions of dollars of assets but it is not everything um i want to be able to talk to ethereum i want to be able to talk to uh avalanche i want to talk to all of this these

other things um there is a huge amount of of like enormously complex stuff going on in the bridging space in cosmos um and that's another sort of very tricky piece to like understand do i use the gravity bridge do i use axillar do i use uh uh uh do i use gravity bridge do i use the axle or do i use a wormhole like how how what is my bridging story going to be and how i'm going to interoperate beyond the ibc world enormously complex topic definitely requires mentorship otherwise you're just going to like stumble over the same problems that like uh many other projects have so you're interested in building cosmos uh

you don't know uh what do you do now so like the best things to do are to like dm people uh uh find people on telegram five people on twitter um tweet about it i think i follow like basically every account that has ever tweeted anything interesting about cosmos um like you can dm me uh we'll help you like i do read cold emails to occlusion uh hello at occlusion.io um probably don't respond to them as much as i should but i definitely read them uh and uh i'm sure there are lots of other ways to like get in touch with other cosmos ecosystem participants so thank you very much [Applause] thank you very much

thank you is there any questions maybe before zaki goes away questions uh i'm just gonna throw it so please catch it nice catch and no sorry but that's what we're gonna do so if anybody has a question you just have to catch the pillow cool um so obviously like that comes off a lot of the more technical building side yeah like do you have any guide for like the more like governancy like marketing bd side of like the internet yeah i could have given like a whole talk on that um

i honestly think so like that is the that isn't like another area that like so okay so there's like a couple of stories here like one is like um like every other part of cosmos works the same way as the technical piece i.e there isn't like a central uh there isn't like any central entity that does anything uh like our most effective marketing channels are like a random swarm of like awesome youtube people um and like twitter and like twitter influencers who have like built organic communities of of sort of like cosmonauts um um you know like strange

love and cryptocedo like do like regular uh uh like youtube live streams in general like getting like into that community is a great way of like commun like communicating to the faithful um you know from a fundraising point of view there's like an like like most crypto funds have like are like fairly positive about investing in things in cosmos uh because ibc worked um and so like it's generally easy to do that and like sort of general uh uh crypto pr there's also like a lot of overlap and like pr firms that a lot of different cosmos projects work so like you know you can get intros and be like sort of in the same network so yeah cool thank you

[Music] i'll do i guess one more question yeah sorry so thanks so if um if the goal is to keep well let's say to scale the ability to support new projects that are building uh do you imagine it is basically keeping this general model of mentorship but adding you know going from like ten to a thousand of these mentors and sort of experts who can help or would you expect that at some point it will need to switch to some other model for like incubating and supporting i'm like i'm kind of fairly bullish that like we're gonna be able to like scale this way of doing things like it like works well like a big part of like what is i think glorious about cosmos is also that there's like we designed a system that

like doesn't have the gatekeepers for making big changes that like other ecosystems have like you can just like build a project connect permissionlessly connect to the ipc network like build your own marketing channels and like do stuff and like bring value and attention um and you can you know if you want to like build a new more advanced version of tendermint you don't have to like even talk you don't have to convince the tendermint team just like build it and like connect it to ibc and like people will be like oh that's awesome and maybe people will upstream what your stuff um i think this like sovereignty plus interoperability model is very amenable to this like kind of like organic expansion and all we have to do is let's

sort of like take like is like make sure that we like are steadily turning every like successful builder into like you know half a dozen more mentors and we can just like like organically scale to like the ends of the earth so thanks will all right okay one more round of applause for zaki and now we're introducing to the stage foreign hello everyone welcome to privacy in cosmos this is not a privacy

related topic but it's more about how the atmos token model works and how it can be used to create incentive alignment across different actors which include also privacy decentralized applications and also privacy oriented validators on users of course so today i'm going to talk about the problem context but this talk should be more about like erp 1559 on incentive alignment across different actors so what is erp 1559 this was this massive effort by the ethereum community to try to solve all the user experience

problems that users were facing regarding transaction fees and gas costs and there's also like economic benefits and security implications of this functionality but basically it was trying to create a fee market so that the um that the transaction fee was more predictable for users and so you don't have to wait for additional confirmations or like multiple times multiple blocks when suddenly there was a sudden increase increase in the block space demand i'm not going to dive deep into the eap 1559 because that's like another topic but i'm going to explain now

how it works at a higher level so before eip 1559 the fees um on the block rewards were going straight to miners so the total of the gas price times the gas limit was going to the miner itself but after eip 1559 was um introduced the fees itself was split between the base fee on the priority tip that on only the ladder went to the validers and they were still receiving the block rewards but the base fee was burned as part of these economic benefit that was creating like a

deflationary deflationary model and of course the miners were not happy and they went all against the developers and so there was this massive massive drama over early 2021 when miners trying to like create different threats against the developer community and the whole ethereum community to do a 51 percent octagon effectively um like hard forking um ethereum and yeah like even vitalik created a blog post but in the end they were more or less right in the sense that a lot of

the ethereum was effectively burned and if if it wasn't for efp 1559 then those ether would go straight to their bugs and of course when you're messing with someone's bug they're of course going to get a little bit anxious about this functionality on on the other side um there was like a huge push for from the ethereum core development teams to how to improve eip1515 to like adopt widely adopt erp 1559 because of all the um ux benefit that it brought for the different users um there was even like core development teams uh on dops that

were pushing for these like i support ef15159 uh which was a result of like this situation between like the different uh miners and also the developers um so going back to the original model like one of the main main problems here is was that miners saw the the core um like developers had most of their powers um as you can see here like the um how miners saw ethereum but ethereum is actually a big community of not only developers but you also have like

application um decentralized application developers defy users holders and in the future there will be stakers also miners and on core development teams so in reality developers are only a small part of the entire ethereum community an entire community as we can see in different projects nowadays um so there weren't really incentive aligned with the project because like other than the foundation there's no sustainable long-term uh model for how to create alignment for the different teams developing on the protocol

so the question is like can this do something to create this incentive alignment between all these different actors that i showed before and that's why on atmos we're introducing the novel dab store mechanism so the dopp store is basically a decentralized marketplace where you have dab developers and users that meet together and instead of burning the base fee as traditionally is in erp 1559 you're basically splitting that between the developers that are building building constantly on um on the protocol and also the

validators in this case for atmos and the priority tip is still going to the validators um same as the block rewards so this sorry this effectively solves the incentive alignment on like ins yeah like creating alignment between different actors that were previously in conflict in other ecosystem on how to create alignment with the entire protocol so in this case up for atmos core developer car development teams decentralized obligation development teams and miners or in this case validators will be incentive aligned to the long-term success of the protocol through these uh

fee split mechanism in the dob store um yeah so going back to the other part of the community of users that we have how do we incentivize now all the users that are interacting with the protocol and there has been this running joke on twitter when you basically have a sudden spike in the gas price so like the easiest way to deal with this is just create another evm fork and uh you create a new evm for it you start developing new applications you you basically fork some of the blue chip applications in other ecosystems you create a dex you create an a bridge you create some lending platform whatever and then you maybe have a dow to fund

some of the development teams etc but in reality there's no sustainable long-term incentive program that is not one-off um that can create a like alignment between like the users developers um validators and that is sustainable sustainable in the long run that ensures the success of the project and there have been multiple attempts to do this uh so we can find avalon rush polygon d5 for all on different on d5 summer and bsc also had like an incentive program that is basically trying to attract new users to provide liquidity for all the d5

applications but it has certain limitations under certainly the limitations of this d5 incentive programs is that they're not sustainable it's only a one-off so one-off program that basically allocates 100 million dollars for incentives but it's usually also not community owned so they're like only the foundations are choosing which of the decentralized applications are eligible for these uh incentive programs so sometimes um are not transparent like how do you know what are the requirements for your application to be in this incentive program and usually

the biggest problems is that it doesn't really reflect the traction of these decentralized application projects and the adoptions of them in the in the uh layer one protocol and also tvl as we know doesn't reflect there's a growth of users so that's why on atmos we created these novel usage incentive programs where it's directly proportional to the um to the utilization of each protocol where in every every epoch that creates new tokens those tokens are split between the staking rewards the team besting uh the community pool but they are also 25

allocated to user incentives these user incentives are creating incentives for the users that are interacting with the smart contracts and i'm going to explain that now how it works so the workflow here is that we have developers or users or any participat or any user of the of the atmos um ecosystem that can create an incent uh on register an incentive through governance say for example i want to incentivize this little contract i'm going to use diffusion as a and as an example i'm going to incentivize the fusion um for to get like a five percent of all the newly minted tokens from this 25 that i mentioned before

um for a period that is allocated every week for a duration of six months after the proposal gets approved and voted on every transaction that interacts with the diffusion protocol on the diffusion application will start collecting gas and these guys will be accumulated in these gospels where at the end of each week you will basically calculate each of the uh parata shares of the total gas that you spend in these in these contracts compared to the total amount of gas that was spent during this period and then you're going to distribute the atmos rewards

so basically just trying to summarize here how the atmos token worked is basically creating like a positive reinforcement cycles where developers and users propose usage incentives to more more growth to their decentralized applications these incentives drive users and rewards with um with atmos tokens then the users take these rewards and spend these atmos tokens in this in the decentralized applications and services provided in the fms platform and then through the dobster mechanism and the fleece big mechanism that i explained before developers earn half

their transaction fees for each of the transactions that are targeting their contracts further incentivizing the development and the growth that allows them to create a sustainable long-term funding mechanism and then you create more proposals etc and then the positive reinforcement cycle continues so atmos and going back to the original like community and like how the atmos ecosystem works atmos is trying to create incentive alignment for all the different um users on validators and

decentralized uh obligation on default users in the entire ecosystem so for example the atmos holders or evmo stakers will be able to stake their tokens or rp them like the d5 users will have the user incentives the decentralized application developers will have the dot stores in addition to the grants and community pool which can also apply for core development and also the miners or in this case the evidence balancers who have the transaction fees the transactions fees from the dopp store mechanism and the block rewards so atmos is trying to create an incentive alignment between

all the different actors in the entire ecosystem to ensure a long sustainable growth and in the ecosystem so developers violators and users are going to make it thank you very much do we have any questions okay so thank you hey hey sam um are you worried that this is going to be

a disincentive for gas optimization can you elaborate well if developers are getting a cut of gas revenue then you could basically you know launch an ave fork or something that's just like gas disoptimized basically in order to get more revenue um that could be the case but usually um so half of the fees are also going to the validers and there's also like um

the the base fee can also uh be changed through parameters so instead of being a global as an ethereum that is not changing via governance we're also introducing the base fee that is instead of being set in this in in the blockchain state is uh can be configurable so if the base fee is already high uh throughout governance proposal it can be decreased so that that also decreases the um the sort of like the fees that are being burned that before were being burned and now are split between the violators on the developers so if someone tries to i guess like if the entire community of atmos decentralized

applications tries to try to not be uh gas up optimized like the community could just like lower the base fee okay thank you very much thank you very much [Applause] and now we invite you for 20 minutes break so enjoy uh our cookies our coffee and see you here in 20 minutes for anoma's presentation hi there we're going to start very very

shortly there's one change so the talk that was supposed to be in a side stage we moved it here at 12 30. so no worries everything is on schedule you're not going to miss anything so we're going to start in two minutes so welcome back after the break and now

welcome to the stage fatima chirazzi from anoma [Applause] okay um i'm going to talk about privacy today but i chose i hope the title will convey the message that i want you all to to take home it was inspired by no man is an island i guess you you guessed that and i wanted to explain that privacy is complicated and that we should collaborate more together for better privacy the talk is going to be about um i'm

going to have some introduction on what privacy is why i think it's complicated i have a bit of a review of existing privacy enhancing solutions in the blockchain space i'm going to talk about what type of privacy they provide and how they could be improved it is not the talk is not about saying that any solution is bad but just to explain to you how it's complicated and it's important to understand that complexity in the end of the talk i'll explain what the problems are from my point of view

and what we can do so why should we care about privacy i assume you all care about privacy that's why you're here it allows people to choose what type of information is revealed about themselves and it's important because knowledge about personal information allows abuse it allows discrimination it prevents people from participating in the society freely in a democratic way so it's important um why is it complicated i i had to add a picture of a bicycle here in amsterdam and the point here is to show

that even if that lock is the best lock that humankind can make this is not secure i hope you all agree i even i could lift this bicycle and run away with it and the the lock is amazing the let's assume the lock was done by i don't know nasa whatever the best people on earth but this is just security is more complicated than just having a solution as a very secure solution generally security deals with confidentiality it deals with integrity and authentication while privacy deals more with our social interactions our activities because it's hiding in personal information so it's a bit more

complicated than some security properties and it's important to look at solutions from a multi-dimensional weight in this picture you see that that one dimension is the lock the other dimension is what is the bicycle lock two and that part is completely ignored so if you just look at solutions from one dimension a lot of them seem amazing but the reality is they are not really secure it's just an illusion of security and to add also why i think privacy is quite complex is it is connected very much to our daily lives it cannot be achieved very in isolated way like security can

a lot of privacy is about hiding your activities among activities of other users or even fake activities that you could make up but this is very expensive and it's very difficult it's very cumbersome for example we are all awake at certain times of the day waking up at you know 3am and sending a message just to have a fake message sent this is cumbersome and what is to be added to privacy uh is also is connected to our family and friends and they might not want to they might not care about privacy that much as we do and they they might find this too expensive or cumbersome so that makes for from my

point of view privacy even a bit more complicated and difficult to achieve than security in blockchain normally in blockchain at least traditionally in the past blockchains were supposed to be or people thought of them as private but what they really were like bitcoin or ethereum is they have pseudonymity so you have accounts that are not associated to your personal identity but it is a single account and everything is transparent the problem with that is if you if you use it carefully or no one is looking it could be okay we don't know who satoshi nakamoto is and it's pseudonymous it's not great

privacy but we still don't know because it was early days no one was really looking there was not that much activity but as you know as soon as you start to have activity with the pseudonymous account this is going to become sooner or later broken an example of that is you can have an account in bitcoin uh ethereum as soon as you send something to kraken and you have kyc and your passport picture or something a game over um you send it to someone that the fbi can get to or or some government again game over so there is a lot of ways where maybe if you do one transaction pseudonymity is okay

if you want to do it on a daily basis a lot it's almost impossible to be enough so what we have uh in traditional blockchains if we cannot really count on the privacy you can get lucky maybe no one is looking but the chances are if you use it a lot you're not going to to to stay private so i hope that i have convinced you that sodomity is not a great idea for privacy before i start to look into existing solutions i wanted to explain to you what uh the attacker model or the adversary is because there is no from my point of view there is no absolute private like it's not a zero or one you're always secure or private against

a certain definition of what the adversary or the attacker is and the example of this is like at the door the door here is secure you know if you lock it against some sort of adversary is it against secure against um a tanker no it's not going to be secured against every type of threat and depending on how good the door is it will you know keep out different types of adversaries so it's important to understand that complexity one thing to take into account is who your adversary is in terms of how widespread they are is it someone who just locally has access to a transaction is it someone who can have access to everything is it the nsa so the the reach of the

adversary is is different the other question is whether adversary is poor or resourceful how how much are they willing to spend how much money are they going to spend to attack you or how much money are they going to spend to analyze information to find you and something that is very relevant here in blockchain is memory this is often not talked about in security and privacy circles but i think it's very relevant for blockchain because a lot of the privacy solutions here are about short-term memory and long-term memory people consider things that are not on the blockchain to be private but the reality is you're just not having it stare for someone who has a very short-term memory so someone who

cannot you know remember that what happened yesterday of course if it's not on the blockchain then fine but if someone can remember anything that has happened then just the fact that it's not on the blockchain um is not going to be enough so whether they are going to whether your your privacy definition is not being on the blockchain or not or your privacy's definition this never been anywhere on the internet that's a different uh it's a distinction and the last one is being a passive adversary or active so you see there's a lot of nuances in what the threat model is so let's go to the first solution that i found i have never used many of these and again i don't want to

i want to emphasize that this is not critique on any single solution but rather really showing to you the complexity so mixers the idea of a mixer is that you instead of sending a transaction directly from a sender to a receiver you're sending it around you send it to fake accounts that you created and they're they're sending these transactions around until it goes to the receiver and hopefully no one knows that all of these fake accounts in between were yours your own they will think that you know these were other people and it will somehow disconnect the direct connection between the sender and the receiver of a transaction um it is private for a very very weak

adversary so your adversary has to be really really weak for you to consider this pretty private because maybe one time you can do this but if you do it a couple of times with chain analysis this is not so difficult to break um but it's it's one solution another solution are off chain um option transactions these are the idea is that you have some sort of um settlement on the main chain all the micro transactions happen off chain on a different network so here i have examples like lightning network um on on bitcoin you can have settlement between two users they lock 200 worth

of bitcoin then they go off bitcoin they do a lot of transactions back and forth which is not recorded on bitcoin and in the end they come back and settle the rest what is what is left over so what you achieve here is that on the blockchain on the bitcoin blockchain there is really not much information about all of the activities between these two people um but that's really what it is um you're not really private against a strong adversary you're private against the adversary that only can see bitcoin and that's it like their computer only sees what happens on bitcoin um so and here i don't think the problems that a local adversary that sees what is happening between these two

sender and receiver can easily find out um what the connection between the sender and the receiver and another point is and i didn't bring this up in the previous slide but it's time incorrelation this is quite big in the privacy community you identify people based on timing it's metadata there's a famous quote from a guy in nsa who was saying we kill people based on metadata we don't need to know just the fact on when someone is sending what if you do it long enough you can identify based on who is awake when when you have activity you can identify who is having a relationship with someone else so timing correlation in this case is

still still possible another solution is monero which is a very elegant solution the idea is instead of having one signature that is identifying the identity of the sender you have group signatures so you have eight people who sign something um so each one of these eight people could be the signer the signature does not identify which one of the eight people has signed this is okay if you do it once and if the competition of these eight people also makes sense but i can give you an example maybe there's eight people seven of them are from vietnam and one of them is from switzerland the receiver is also from

switzerland it's not so difficult to guess that probably the guy who sent from the one swiss person in the eight people um is the one that signed the the transaction so is it a bad solution no but is it perfect the group size is too small uh depending on the diversity of the signers um depending on how often this has been used this can reveal um information the other point about this uh different than the lightning network the off chain transactions here every the whole history is on the blockchain on the monero blockchain so you can look really into this look at the signers of each one of these group signatures and at

some point it should be possible to identify some people they do also in monero also you do not hide any timing signatures so again based on activities based on when you're awake when the receiver is awake there is a lot of like conclusions that one can make the next solution is mimblewimble that has been deployed in green sorry green beam and light coin recently also the idea with mimblewimble is that you aggregate transactions it's very similar like going to a restaurant and when you pay you put all of your monies together and then pay the waiter at once the baiter doesn't know which

money came from who you're aggregating transactions from different people and then just give the collected transaction to to the blockchain which is cool in the sense that it's also reduced amount of transactions that are recorded on the blockchain so it's a scalability also solution the problem that mimblewimble has though is that collecting these transactions or collecting these bills has to be done in a way that the waiter is not seeing them if the waiter sees who is putting money on the pile then really you're not achieving much and the same is with member wemble the network layer where these transactions are collected

has to be designed well and if these transactions are you know just broadcasted which they are in some cases then you're secure against someone who has a very short memory and does not remember what was broadcasted and only sees what is on the blockchain but you're not secure against someone who can remember oh i have seen these transactions before and then later on they were added up and put on the blockchain um the last solution i have to review is ecash it is a also very elegant very nice solution zcash uses um zero knowledge proofs and the idea is that the sender receiver and the amount of the transaction are not visible it has a transparent and a shielded mode

basically in the transparent mode you're very similar like other blockchains in the shielded mode these the sender receiver address and an amount of transaction are hidden which is very cool so i really like z cache though there is still some problems that also z cache has one is network layer when a sender is that the timing that the sender is sending something and the receiver is having any connection to zcash this is not hidden you what zika suggests is using tor but it is not integrated in in the protocol itself and the other problem is that there is no hiding of timing signatures

one can have transparent funds transparent and then put them in the shielded pool and then remove them again and there is no delaying between these so based if i have two users alice and bob they both shield then they do the the transactions they unshield every time they do that same time at some point it's very clear that these two people are exchanging a transaction with each other and this is again not so difficult to such conclusions are not so difficult to make so what are the problems the main problem i see is that often in the blockchain world people equate using a tool as

we have solved privacy and it's just not that easy if you use tomato you don't have bolognese there's more complex complexity there is more details that you have to to have to take to account um if you just use draining signatures or just zero knowledge proofs this is not solving the solution only you have to look into the whole dimensions on other details that you're that you're adding the other problem that exists is that there is not really a standard for tread models or solutions all of the solutions that are presented to you they were really designed for different types of adversaries for different types of needs but

these are not really standardized so for the user like let's just my mother or my dad who are not privacy experts um if they would wanna they would use any of these without really understanding uh what the difference between these solutions are so i think we need more standards for both threat model and for solutions because otherwise for the user it will be very very difficult to know what what solution to use and the last part is that solutions are not compatible or complementary a lot of solutions are solving very nicely sometimes one part of the problem but then when new people come on board they do not build upon that but create something new and i understand that it's cool to you know create new

things it's not so cool to go fix other things or um you know complement other things but we have to remember as an adversary you attack the weakest link always if you want to get into some you know into a room you don't go and try to to crack open the most difficult door that the room has you will go through the window which is open so ignoring the dimensions and solving something is just giving an illusion of privacy but for an adversary you're not really doing much this is more of an illusion of of having solved the problem so what do i think we should do

first of all we should identify complexity we should acknowledge all the problems that are um the needs that the the users have the whole stack whether it's wallets and i haven't even i wanted to add information about wallets but i thought that's a whole new like presentation it would be too much for 20 minutes to talk about so wallets the blockchain like so many parts of the whole stack have to be taken into consideration the second part that i think is important is to have privacy as a goal and not have using a tool as the goal so the and the same is again when we talked about um you know tomato and bolognese the

question is do you want to make bolognese or do you just want to use the tomato and this is something that you have to have in have in mind so privacy should be the the real goal um the other point that i think is important to improve the privacy of the whole space is simplicity and understandability so we need to make um solutions as simple as possible we also make to make need to make them as understandable as possible for um for users the next point is privacy loves company privacy is often about hiding in the crowd hiding among other transactions of other users

hiding um your identity in the you know in the forest of of all other uh users and that's why it should be easy for users to participate in uh in these tools because the more users you have the more privacy the whole the rest of the users are going to have and the last part which i hope is one of the big messages that you're going to take home is collaboration i would really really really wish for more collaboration between blockchain i mean projects in general but definitely privacy blockchains that care about blockchain projects that care about privacy it's important to have compatibility with each other

to to work on standards to to improve things and the last slide is about the project that i'm working in the moment how is anoma trying to improve sorry for the red i hope it's not too much of a contrast compared to so what are this trying to do um we are trying to work on a multi or we are working on a multi-asset pool the idea here is to have to allow users to use similar technology like zcash does but with multi multiple assets so uh allow users to to also enjoy interoperability uh the next point that we are working on is design of incentives that also take

into account um privacy so normally incentive design focuses many more on economics on incentivization in terms of security but for us privacy is a big factor there too we are working also on end-to-end privacy and this is looking into privacy for the whole stack and this is something that also came up in a presentation before we are using the ibc standard and are working on privacy bridges and mainly to allow users from different types of chains like penumbra namada anoma and ethereum all to be in the anonymity set which basically makes the

the forest bigger and makes the crowd bigger and hides users more so that's it i hope um that i that you all take a take home that yeah we should collaborate more and we should get into the complexity of privacy thank you thank you very much before we release you from this stage do you have any questions was everything too difficult or too easy uh yes could you uh maybe uh highlight some of the end-to-end privacy things that you're doing the privacy yeah within the end-to-end

layer like networking and mempool and stuff like that the auntie i don't know here you mentioned that you're also addressing privacy end to end end to end yes so what we are looking into is integrating network looking into the network layer privacy and integrating it in in our technology we are also looking at privacy at wallets which is basically where the users are are interfacing the most uh with the blockchain um [Music] and something that we are also looking into is delays um which is the timing signature that i was talking about um so yeah we're trying to

really look into from the starting from the user on the blockchain anything on the way very very there are places where information can be leaked thanks i'm i i guess i'm just interested in um how does the private bridge design work and like oh that's a good question um i have not been involved with the pride do we have chris here maybe you want to because i have a private bridge in mind but it's not the one the other design that you do you want to yeah i can give a quick answer here so

the tricky part in private bridges in the ibc context is balancing these competing goals of providing fault isolation which ibc has in ics 20 by metering supply transferred across the bridge so it's like basically one blockchain has an account on the other blockchain and you can stop the other blockchain from sending back more assets or other kinds of state transitions that you didn't originally send to it or didn't originally authorize it to do but as soon if you you know have say zcash style sapling circuits on multiple chains and just do a zero knowledge proofs for your like ibc cross chain transactions that's fine except that now you no longer have a way to meter supplies you don't have this fault isolation

uh so in order to preserve this fault isolation we need some kind of encrypted computation that allows us to keep this like counter say of how much supply of a particular asset has gone from chain a to chain b while not revealing it because if we revealed it each transaction that would of course break privacy so we're specifically looking into a solution that uses basically limited additive homomorphic encryption so when you perform a cross-chain shielded transfer you can add to this encrypted counter and test this encrypted counter when you perform a transfer in the other direction never goes negative meaning that more assets are never sent back than you originally sent but without revealing anything about the value of this counter or the value of individual individual transactions so it's mostly a

cryptography problem to try and get these two constraints that we want to satisfy thank you i think we all said thank you very much once again a round of applause for tampa fatima [Music] [Applause] now on the stage one of our hosts will uh next up we've got the first panel of the day so i'm going to ask a lovely panelist to come up this is going to be a validator roundtable panel discussion um and so we've got

four validators on stage but actually i know there's other values in the in the audience um and so um the the topic really here is about uh what validators are and what their role is to play in the cosmos ecosystem and i think two years ago there were major questions about whether it would even be economically sustainable to be a validator and what it would end up looking like and some of those answers we've had over the last two years but we know there are major changes continuing to come for proof of stake in validation particularly here with earlier we had the talk from billy um about interchange security and what that might mean for the way that um zones and and security um is done on in cosmos

and we also have the evolution of liquid staking in many different ways and so those are some of the topics we might touch on um but before we do i think we can introduce everyone on the panel um and so first of all just quickly to introduce myself i'm will i'm one of the founders of zero knowledge validator we run around 10 different validators on different chains and particularly you're focusing on privacy and how that can grow the value of different blockchain networks and trying to advocate for it at every level um one of the sort of really exciting things is that at the moment we're on the cusp of quite a few privacy focused um zones or chains launching and so we're really getting ready to support those at their

launch but elizabeth maybe you want to start with introducing yourself sure um so my name is elizabeth barnes i work with figment as a senior protocol analyst i've been doing it for about a year and a half um and figment runs over 60 different validator or 60 validators on 60 different networks but we've been participating in cosmos for a very long time particularly with governance and also um with the infrastructure so yeah and uh i'm zave xavier megan from chorus one i'm the head of research and ventures at chorus so chorus we've been pretty sort of i guess contributing back to cosmos for many years now one of the

first i guess playing in the you know very sort of early days of the incentivized test net back in 2018 i believe i've been at chorus for a year now and yeah very involved with like new networks that are launching cosmos and analyzing these networks cool yeah my name is also will and i also run validators uh under the the name of like binary holdings um we're a bit newer to the space but uh we run things on a bunch of different chains and uh yeah producing blocks and stuff fantastic so um elizabeth maybe uh it would be really useful i think everyone has a different view on what role a validator might play in on chain different chains but from your point of view in figment what do you see is kind of the most essential role that validators

play other than providing security this is a really good question a lot of people are asking this these days actually um so other than providing that security providing our infrastructure um like the other role that we see validators playing is participation in the community um being a being a good steward and owning the network is important um as we're seeing i think different types of validators come about so you've got you know staking as a service um you know what correspondent and figment and among others do but then you also have smaller validators um who aren't as focused so much about the the service part of it i'm thinking here of strange love

inquisition these sorts of things um and then you know with this interchange security model and new types of governance you have validators that aren't providing security but they're still providing that governance aspect of it and so as we get different types of validators i think the role that validators currently play in terms of providing security participating in governance and then just being good representatives and having that having the calling of decentralization and this um this forward thinking look will now kind of separate into different roles into different ways that way uh will would there be anything you'd add there in terms of different roles

you think are important or would you echo most of that yeah i definitely think like echoing a lot of that to me like validators are just like very like hyper-engaged community members um a lot of the what the roles of validators are is just kind of like finding ways to actually like contribute and give back to like the communities of like all these different projects and whatnot um to me it's like the actual process of like running a validator like the infrastructure and whatnot um a lot of that i think is very like commoditized and like fungible um it shouldn't matter like on the the protocol level like who produces blocks like one block produced by one validator is the same it should be the same as like a block produced by another validator and so a lot like the differentiating factors are just like

how do people actually kind of contribute outside of that and kind of like what sort of value do they add in the kind of broader scope of things and so um in a lot of ways uh what a lot of validators have kind of um differentiated into and kind of like specialized in and a lot of like finding their niches in are things like um okay people are going to make like block stores people are going to make like um like hosts like public rpc nodes uh hosts like database snapshots uh make like dashboards like staking interfaces um do some of the like authors stuff of like auto compounding and whatnot and so uh i think it's like a lot of just kind of like being able to find a niche for things and um being able to kind of like contribute back to the

communities for a lot of these things so i think both of you mentioned governance uh zav in terms of uh chorus one's approach to representing um let's say like stakeholders and people who are sticking to different course one nodes how do you make sure that uh the opinions of delegators are being listened to as opposed to or you know or do you think that's an important sort of aspect of it yeah i think i've got a sort of classic response here which is of course we use the telegram we have a community channel where if there's ever a controversial vote uh we'll sort of send that out to the community but i think what's interesting is that you know many people think about the community which is of course very

important but then the people who aren't voting in the community you know you take their vote in cosmos especially and so what happens is like internally at chorus one is that if there's a controversial vote we'll actually vote ourselves like inside the company what we think the vote should be so you have the people the delegates which of course matter a lot to you know what they want and you have to listen to them otherwise and one of the powerful things in cosmos is that if you don't listen to your delegators they're going to let you know about it and they're going to send their stake elsewhere so you have to be really responsive to the delegators and then if they're not responsive to themselves then you have to make sure there's internal consensus for what you're voting on so on the kind of more recent a

controversial like juno proposal for example um how did each of you and this kind of open question how did each of you handle that internally and externally in terms of how you voted and how you communicated it personally like i just love the fact that like this proposal was made probably just because um it really just gets the community like engaged in things like the actual thing itself um i think it's kind of kind of wacky but like just the fact that uh this kind of proposal kind of like uh you see this kind of like in all the different kind of community channels of things on like reddit and telegram and discord and whatnot like people just kind of losing their minds over it and so um to me like i would love to see people propose more things like this um

just in the sense of like things that might be controversial um stuff like that just because uh i i think kind of like as a community kind of like working through some of the issues for that kind of like makes it stronger afterwards and so um yeah i definitely would love to see kind of more things like this um in terms of like the actual thing itself uh i i don't know i think it's a bit of a slippery slope to be able to kind of like uh take like tokens away from people i think it probably should have been uh figured out in the airdrop stage of like what when like where things should go to um but yeah so we had

we had a a whole bunch of different slack conversations um we try to keep things in like one thread so you can follow the conversation but what happened is this proposal came out and everybody saw it at different times and so we had all different sorts of conversations happening um and we ended up having two really long threads about it where um the majority of the folks from our protocol team participated and other members from marketing chimed in and we had we had a very robust conversation about judo 16 which is really awesome to see um for us and we had so not we had the discussion

about what the proposal actually was doing and the long-term effects of it you know of immutability and these sorts of things and then we also had an internal discussion of how we were going to vote on it so it was really cool to have the justification of like both what it actually means for the protocol what it means for the future and kind of what we as an organization were going to do about it um eventually we we did submit our vote and we posted up online we said hey this is how we're gonna vote on this and here's why um and so that was for our delegators and we also have a telegram channel where they chime in with with their opinions as well um and then we also um share that with our clients as well so

they understand and we provide avenues for them if they disagree with our vote they can always go in and change it yeah and i think uh figment did a really good job with how they communicated their response for that proposal um for us it was again an internal conversation and i think the majority said no uh but just sort of thinking of this proposal so i'm quite good friends with uh d5 times who of course have the friends val that are uh in cosmos and they're very community oriented so chorus one we voted no uh because we didn't believe that the you know we just thought it was again sort of what crypto's about and then d5 times guys they're very community oriented and they really listen to the delegators and they're a bit more maybe retail as well

i mean you never know but um and they voted yes and then now they're sort of somewhat scared of the legal ramifications and so i think i was also speaking last week with jk from steak fish in a podcast and he mentioned that he he could see like much more controversials coming to cosmos like i think this will be the first of many uh so for better or worse like one of the beautiful things about cosmos is the governance and the democracy so yeah expect to see more like this in the future very interesting so um i think the kind of next topic really related to how bad this is sort of linked currently with governance is uh interchange staking

uh and um security and the ability uh to kind of share in different ways security uh first of all like between with existing validator sets almost exporting um their security to new chains that might want to launch but also sort of links to liquid staking and how that might also impact um the way that chains can share or interact when with validators for example um liquid staking from osmosis being used um to potentially provide security on multiple other chains um using amm pool um tokens how uh do you expect this to impact first of all like your your business models um and also uh the way

that you interact with new chains um over the next few years uh personally like i think a lot of uh what is interesting is just a lot of these new chains uh when launching and whatnot um the the valerie sack kind of like when those kind of come out is um kind of like an experience sort of it's like the process of actually just like launching and whatnot is just like this whole kind of thing especially it's interesting opportunities for new people to come in and kind of being able to participate and whatnot and uh it's kind of something where it's like people that might be kind of like a fan of whatever specific project but maybe they're not kind of like as in tuned with the broader like cosmos ecosystem for example this can be like an opportunity for them to actually kind

of like participate and so um i do think kind of like there is a place for for these things and kind of like uh i don't know like interchange staking and whatnot uh is is is great for a lot of things but it can kind of like take away that opportunity from some people for some things um and so to me like i i do really appreciate kind of this whole kind of like process of like a new chain launching and kind of this whole process just like coordinating a bunch of validators to kind of like do things and whatnot but but i also see kind of like the flip side of this of like um new projects launching uh people wanting to maybe not necessarily have to to cultivate their own like validator set for things um this can be a lot more easier to actually just launch and

just because that that launch process kind of sucks and is very hard to actually kind of do and coordinate a bunch of people and whatnot and so i think there's like pros and cons to it and it's definitely uh something it gives more options to people like launching to be able to uh choose kind of what what they actually kind of want to do there um so yeah i think it's an interesting new kind of primitive for for people to use for for building yeah i think uh for us maybe more focusing on the liquid staking so of course chorus one we've been researching this for many years now and we were a genesis validator of leader for ethereum we then built steak soul which is leader for solana we then were ideating a lot in the last year about liquid staking in cosmos

we now have fish and roya who are here and the quick silver team who are building out you know this liquid staking zone in cosmos so i think it's really exciting i think you know there's massive potential for cosmos a lot of what quicksilver is building uh sort of attacks many of the flaws of light itself just using the model of cosmos with you know the proxy by governance and everything else and all the other features like the ux i'm sure will be a lot smoother and that's like injury part due to kepler for example so that's just one side of course which is liquid staking i think you'll see in the next year or two liquid staking in cosmos there's of course terra already exists which course one is involved in as well with uh you know b luna uh which is massive on anchor for

those that use it but i think you know be uh q adam and quicksilver assets in the next year or two will really take off and that will surprise many people and then in the interchange and sort of security side i think that's going to really improve i guess like you don't have to bootstrap your own data set anymore so what i can also sort of foresee in cosmos in the next year or two the last few years in cosmos has been like executing ibc chains bootstrapping for our data sets it's taken a bit longer to go to market and cosmos but like some of the networks i'm seeing now cosmos also the core developers and cosmos what they're building i think the next eurotone cosmo is going to be much more about scaling and in a secure way and that's i think that's really exciting

yeah um i'm really excited for interchange security um because of this way that validators will no longer have to run the infrastructure if they just do the governance when we talk about what community is it's it's not just people like sitting behind a screen in a forum the community is much stronger and it has a much stronger coming together i think um so if that's the case and then we'll have this entertain staking what this allows is individuals like genuine community members genuine token holders that may not have you know there may not be whales they make all these things um they'll have a much they can have a much larger say in governance

and specifically with governance votes um we're not really sure what the long-term effects of having these infrastructure providers govern a protocol kind of the way that it's been going traditionally when we think about who makes decisions on a protocol it's usually infrastructure providers validators miners these sorts of things because they either have the capital or the technological expertise to make those decisions right either through voting or through implementing a binary so once we have this interchange staking now the core decisions can be made by a delegate um and and so that kind of flips the tables and it's a new it's a new model for

token-based governance um so i'm really looking forward to seeing that i think that's a really interesting differentiation compared to now but i mean of course there are other ecosystems actually polkadot being kind of one of them where you do have a bit of a separation between validators and governance um and you know we may then see some of that come into the cosmos ecosystem and it's unclear at this point whether that's a better model i mean obviously validators are big stakeholders some of the biggest stakeholders and you know have a lot of involvement but separating it in some ways may it definitely was going to change the environment um so i think we've got one more question before we open it up to questions from the audience so have your questions ready um

but uh specifically actually i think for chorus and figment um how do you see your kind of responsibility in not becoming too large obviously you're also running staking as a service so um how do you balance that with trying not to have to have two large stakes of validator um and therefore compromise decentralization of the network yeah i think of course this is an important issue and one that we care about deeply you know i guess for a network to be decentralized it can't just be a few core validators in a cartel i think one of the things with liquid staking we're seeing right now actually especially with lido for example and ethereum if you've been keeping up with twitter there's some

backlash with like the lido validators which is about 20 of them because you know the state details you know going above almost 50 percent now so it's really on us as the validators with higher mark you know voting power um to make sure that the the validators with less like we can maybe translate skills to them we can sort of guide like mentorships like you mentioned it before like i think a lot of the small validators that i talk to the infrastructure is sound like i'm sure the infrastructure is the same as chorus one sometimes it can be a timing thing so course one has of course been around for a while so you would expect these newer people to come in and it would take them a longer time to get the delegations but then it's about like helping them to receive delegations through connections or through telling

them what worked for us so it's like sharing what worked for us um to help them with their communities build their own brand like you know you have binary and these newer guys friends of our data cryptocedo i mean they're all fantastic and we want to see them all thrive and support them in the best way possible so i think one of the nice things about cosmos is that it's like really cooperation not competition and so like you know you have figment and chorus and we've been around for a while and of course we're on many networks like solana and ethereum as well but in terms of cosmos and also there's other networks it's not in our best interest to keep it centralized so i mean we can't say please delegate i mean you could say maybe like delegate away for us if we have too much voting power but normally

we don't go about three percent on average and so if you think of 100 that's that's not very much so you know there's way below the threshold where it'd be a problem yeah i generally agree with that i think the the new kind of coordination that we're seeing between validators is really cool and having this shared knowledge between like we're not really competitors we're collaborators um and so seeing those relationships evolve is really beneficial for the protocol and also just for the for the fields of validators as we see more and more individuals who who pick up the skill because it's a way to make revenue it's a business model um the more competition the better because it's not competition

it's just more people to collaborate with fantastic so uh okay it's time now for any questions um here so yeah starting over from billy here we go um thanks for the panel so far uh i have a question so i like to think of validators as sort of sharing the responsibility for operating the network uh but i'd be curious to hear url's thoughts on the responsibility of the validator for sharing the liability of operating the network especially in the context of privacy where there's you know probably more potential to butt up against the law or be liable for operating networks that might have anti-money laundering violations uh

similar in the idea of operating networks as a security like ethereum launch and the sec said it was not a decentralized network it was security but it's now sufficiently decentralized and like how committed you all are to standing in the way of the law to protect the operation of a network like is that part of your core business model do you do research on that do you do like advice from lawyers like how much of that is in your mind space maybe i'll start off on that um that's actually something which is a topic uh the zero knowledge values actually did an open legal report on um earlier this year it's one of the key focuses because there are obviously a

lot of people who are worried about that it's not a unique problem to validators either um in ethereum roll-up operators may have some very similar concerns and the kind of potential implication of money laundering uh if you are the essentially kind of facilitator of transactions on especially a private network are pretty major um i think a lot of people are sort of betting or sort of hoping for this scenario where we can say these networks are provably decentralized enough that uh it doesn't matter who's running like you know there are enough people running these nodes that you can't necessarily say that any single one of them is sort of operating it and running it

that's still to be tested of course and i think there are certain jurisdictions where actually some clarity has been given as to the fact that by running a piece of software that's open source um as one of many you are not yourself providing this network but that is something which i think most validators should be worried about and i i would be interested to hear if the other panelists have done any sort of research or taking any advice on that question i was going to say um definitely it's an interesting thing just because right now i think we're still come just early in the global kind of like legal regulatory kind of kind of clarification on a lot of these things but i'm excited for like things

to kind of settle down a little bit more just because right now i think a lot of like there was a framework by which people can launch projects and people could actually run things infrastructure in like a compliant way more or less and um right now it's like some things are clear some things are not and i think uh as we kind of move towards more more clear down things it's good but like at this current point in time people just kind of bear a little bit more risk in terms of the liability that they have and whatnot and uh i think like a lot of um for a lot of people it's like the the risks of this uh the rewards actually like participating in these things actually like helping projects launch and being a part of a lot of these things uh the

rewards from that like outweigh the risk of uh potential kind of like legal legal viability and that's kind of like uh where i think a lot of people sit there but um i'm excited for things to maybe be a little more clear so chorus one we're a little bit more institutional so of course we do work with lawyers sometimes not all the time um but if we were if the risk is significant enough for us to be like is this something that you know for us as a company is worth us participating we would consult with them so if we think of cosmos networks like anoma and nim normally when we look at these networks there's like in very small text like small risk there might be regulatory problem here but i would say like us as a company we tend to not think about like what the

regulator might do we tend to just operate these privacy networks because we believe in the privacy networks and then if something happens we would like then look into it i would say though like research in this area we're of course partnered with zero knowledge of our data as well and we really love the work that they do in privacy and so we're lucky to be around people that are doing you know great research in this plus in course one itself we have some like great cryptographers that sort of you know aren't working necessarily on cryptography right now but if anything was to happen in terms of like regulation or anything like that you know to be more redundant i guess we would put these guys and girls onto like a project like this to make sure that we continue to operate nodes it's not at least i don't believe we have any

intention if any regulation came to stop running nodes like we will work with lawyers we'll you know we'll console we'll also work with cryptographers to make sure that we're still supporting these private networks i don't know if i can speak directly for the figment in this instance um but i can say that it's some like regulation is one thing that we're been paying attention to and we're looking forward to like clarity and the law and working within that thanks for the panel um a little bit feedback so i i believe all three of your validators white label and

it's a little bit of a kind of murky area i i kind of only know what associations and you know which projects you're white labeling for through conversations um what responsibility do you feel uh your validators have to indicate the degree to which you're white labeling you know the percent of percentage of the network that you have under your control and how do you how do you see this evolving um are there going to be you know standards set where you're at least kind of indicating

which which validators you are white labeling for yeah so um this is something i was just talking about on wednesday um so with i think this white labeling is another type of validator and you've got you know sticking as a service you know you've got public validators that way you've got um you know smaller ones and then you have these these white labeling ones and i i this is just something i just started thinking about so um so i'm i'm imagining

there has to be or there might be some sort of of potentially a kyc by by the protocol in the future we kind of see this now with some of the top validators so our tara does this once you submit your identity you get a little blue check right next to your right next to your name and so some black explorers record that and do that um but the question is if you're supposed to remain self-sovereign how how do you why would you kyc validators in this way um so i think there it's going to come down to self-regulation i think um because you want these things to remain open and permissionless so if you kyc a

validator you don't want to say that you can't be a part of our set or anything um so yeah this is an ongoing conversation uh that we've been having and and i'm really interested in hearing other people's thoughts on it yeah i think it's a fantastic question actually i think even for us and for many people it is definitely murky in terms of like how much you should disclose or not and yeah i think like i guess of course where we think about it i think sometimes we think many years in the future we think that there will be significant competition between validated white labels in mev and so i guess of course if there's one validator that takes much more med than another i think that could be a problem

in the future because you'll get much more yield as a white label um if you go to this validator or if you get that maybe you get delegations in some way so i think in a sense for us and in general perhaps mev and like centralization around that is even more of a problem than white labels um so at the moment you know we we do disclose some of our white labels maybe not all of them but sometimes it's like yeah i think something with white labels is like the agreements so like maybe the stakers themselves don't know the sticking with some white label node because it's hard to tell and maybe there could be some more transparency on it for notice white level or not i think the community eventually will start talking more about that but i think people will be surprised to find that

even those that do want to run wide levels like figment or chorus like even then the market share isn't outrageous like without giving many things away if i look at cosmos versus ethereum i would say the stake and delegations in cosmos across all networks is much more decentralized than something like ethereum for example yeah and also i think uh just this like white lighting process and whatnot um this kind of goes to what i was saying earlier kind of um the actual infrastructure part of validators is it should be like pretty commoditized and like pretty pretty fungible and to me that's kind of like what the like white labeling part is mostly is kind of like being able to just um outsource the actual running of infrastructure to somebody else um it should still be kind of like up to the

responsibility of the people that are actually like using the white label service to either like disclose it or not or use that as a part of kind of like their communications for how they want to be represented in the community and how they want to maybe like attract delegators and whatnot um so i guess that's kind of like two parts to this question one is on the general theme of as validators get more delegates and get into the top ten how should they be responsible for ensuring the decentralized decentralization of the network

and one example that comes to mind when i was thinking about this question is that there was a recent proposal on osmosis which was trying to redistribute um staking rewards across all validators to try and incentivize people um delegating with um lower ranked validators and actually if you look at the votes you can see that the delegators with a higher share are obviously saying no because it goes against them and actually the um the highest ranking validator to vote yes was binary holdings um so here is like a clear example of where kind of validators have directly used their power to vote against something which would benefit

lower ranking validators so how can this be reconciled in the networks that you operate on personally like i would love to see uh kind of like a framework for where um like staking rewards are just kind of like rewards in general are kind of like done in proportion to the amount of uh like value add that like a validator gives to things and right now at least kind of like i don't think the current way of like voting power in like delegations or whatnot are like definitively representative of like how much actual kind of like contributions like someone gives to a bunch of these networks um there's a lot of things where it's kind of just like for even kind of like for maybe like smaller smaller networks and whatnot um a lot of the value that people give are just like being in chat rooms like

answering questions participating in discussions like making things uh kind of like giving things back to the community and whatnot and i would love to see kind of like a framework where we can like reward people kind of like based on uh some of those things and this is like a very subjective and like not very quantifiable thing but i would love to see kind of like a framework where we can actually kind of like uh support people based on uh like contributions and whatnot um i think like partly proposals kind of like this uh are like in a good direction towards that um right now at least i think kind of the the way that kind of things are represented in terms of like building power and whatnot is um partly just like branding and marketing and a lot of things like that and so i would love to see just like

better ways to support like smaller values better ways to make things kind of like more sustainable and kind of redistribute a lot of kind of the uh the wealth that people are getting just to have like a more sustainable community like as a whole i think yeah i think uh if we think about the polka dot staking uh mechanism i guess like nominated private state they they do try and do this a little bit where it's like they want everyone to have a similar sort of reward and different stake and i think if you make the system too complex sometimes it gets very confusing for the validators themselves and i think that's one of the core negatives of polkadot is that it has this system actually and so you know when it comes to i guess trying to distribute some of the rewards to the lower validators so they might

get more and they might move up the ranks so it becomes more fair and also the voting system i guess comes down to governance as well so one of the great things about cosmos is that you might have validators like you know corresponding or figment saying no we don't want this because if we want free market for example however if the it's how much the i think you should leave it to the market and the market is the community so the community really thinks that the small validators should be giving given more of a chance and chorus one for example they can change their vote and say like you know screw you guys or they can redistribute their stake to the lower validators so i think like i suppose that is like maybe it's in our best interest i'm sure to vote against this proposal because you know

we have our business and our own operations and cash flows um but the community is up to decide anything in the market and i think you know that's one of the great things about cosmos so yeah who knows in the future what what that will hold so historically in the past figment has actually when we we've gotten a majority stake on our network we've actually redelegated some of those tokens similarly to like a foundation delegation program uh we did that with the graph about a year ago now um so one thing you said is that it's within validator's best interest like vote against these proposals that would read delegates stake like this um and it is if you're coming from like that free market standpoint of of get money um

but it's if it's not within the best interest of the protocol then it's not within the best interest of validators and then and if we want to move towards a if we want to move from distributed models to decentralized models um personally i would really love to see validators continue to have a redelegation program where they redelegate their tokens to other smaller validators who um either contribute significantly to the protocol somehow or you know apply for these sorts of programs i would love to see that continued decentralized state happen one more question at the back um this is a good question for a course

one because i'm really interested in liquid staking and the game theory behind how liquid staking derivatives can start to proliferate on the dapp ecosystems of all these like general purpose blockchains have you thought through what the long-term effects of stake derivatives might be on the security of proof-of-stake networks especially if stake derivative tokens start really efficiently tracking like the rewards and the value of the underlying base asset if their proliferation as like a token of exchange starts to to increase and potentially unseat like the base asset like what

kind of weird attack vectors would you kind of see in a proof of stake network where staked eath staked like other tokens on cosmos start to to get more popular yeah so i think like our vision has always and i think many people in crypto's vision has always been to have the state asset to be you know have more tbr or whatever being across all d5 apps as opposed to just the asset itself because if you think about the state asset that's of course being secured by validators in the back end plus earning yield so it's like good for both parties the the user and also the the value that is in the back end and so like i guess i sort of mentioned earlier but when you talk about lido for example i think there's like 20 to 25

valve that is there so going back to that point i guess they're like it's not a problem because these are great validators and the thing with figment and binary and chorus as well was like you know we have a reputation ourselves and that's one of the great things about proof of stake is that the security of it itself so lido's different because there's a smart contract and you hope that they can merge properly but right now they're getting a significant amount of stake you know maybe 50 60 percent and so steak ether is of course in ave now and and d5 applications like that and i think it's everyone wants this to be like the base asset and so of course you know shouting out quicksilver again here one of the great things about liquid staking on cosmos that's going to come apart or come out in the next few months

which is really exciting is you can basically you get rewarded for choosing validators that are securing the network in a better way which is really unique to any liquor staking that's ever come out before and like they call it permissionless valve data sets and quicksilver so like recommended research um so the security in cosmos i have no doubt it'll it'll impact in any way i know there are some people in cosmos like sunny that think a bit differently about it um and also with super fluids taking of course is another great thing in cosmos you can't really do it in in other ecosystems which has its own sort of trade-offs i guess but i do think in general what what we hope at chorus at least um i believe is you know we hope that many new networks launching and also networks that already exist will try and move to

this liquid staking asset because it's integrating into different sort of applications etc because that on the back end is staked you know you're not like you get liquidity of course with quicksilver for example but it's also staked so it just makes the whole user experience much better and in our opinion of course at least it also secures the network in a way because like people aren't going to take it in and out withdraw it like redelegate it's just secure with a valid data set that has been you know i guess chosen in a way by the delegators themselves and community of quicksilver so yeah i think it's going to be really interesting i can't personally forecast exactly what it'll look like but what i am sure of in cosmos is that like quicksilver is a really elegant solution to the security of liquid staking and it'll be in my

opinion more enhanced than lido is right now i just want to add to that that i think i mean what we've seen from ethereum and other examples of liquid staking now is that it's an inevitability the market is putting a push for it because it's more efficient because it has all sorts of other benefits and so um in any chain now including the cosmos ecosystem i think we have to kind of accept the inevitability of it and therefore design ways to make it as secure as possible and combat any negative effects it might have for example making sure that governance rights and other things can still be attached to it and that you have a decentralized set but there's no i don't think there's any future anymore where you can imagine trying to like stop it happening because um it's gonna happen through whatever mechanism because it's just so much

there are so many benefits attached um i think that's probably what we've got time for um it's now lunch which is going to be served downstairs and when we come back there'll be another some more talks here uh one of the talks which was going to be on the side stage earlier is going to be here now which isn't in the original schedule and so we'll probably resume slightly earlier than we would have done um after lunch at uh maybe time to be confirmed uh 12 45 or 1 1 o'clock back here [Applause] that on

just quickly the lunch is actually in this room not downstairs oh yeah and there's a lot of merch around i'm actually rocking the zkv socks which are pretty cool there are two styles so check them out thanks a lot hello

good afternoon um we hope you enjoyed your lunch and we are about to start the next round of talks uh the first one is uh from fraser edwards from czech so that's coming in hi um so yeah i'm fraser from checked and we created the trusted data economy and title of this is zero personal knowledge ledgers so did a bit of a riff on kind of the title of like today um but with a focus on how not everything needs to be on ledger um you can do things off and actually to i think it was anna onoma's like point earlier there's a lot of benefits from a privacy

angle um so this is us uh so probably key people to call out from here like myself and ankur used to work together at accenture um i actually led a project here with the dutch government doing digital passports using ssi um and then alex also has uh studied here and did loads of ssi with with kind of um with the dutch government so uh what we'll be covering really really quickly um so ssi or decentralized id they're kind of used interchangeably some people hate one term some people another um they're fine um but kind of focusing on like what does it look like and then kind of how is it different to other privacy projects which may have been talked about today and then get

into kind of maybe what we're building and then hopefully a q a if we've got time um originally this was scheduled for like 30 minutes so we'll see if i can rattle for a bit quicker um so easiest way of saying ssi did is just yeah not your keys not your data sorry not your keys not your coins for data um like when we kind of came into like the web 3 crypto space we kind of assumed that everyone would know what ssi decentralized ideas and we pretty much just found tumbleweed like no one knew at all um despite everyone having like this really big focus on anonymity or pseudonym pseudonymity and generally on like having ownership of whatever you're dealing with um and this is kind of like shifting

kind of how data is used at the moment to how it we argue it should be used and really the the big difference is instead of centralizing around organizations or companies you're centralizing around the individual so even though you've got the term decentralized id really it's centralized around the user um so following that whole like design principle of like user-centric design that's basically what this is um but the best way of really describing it is to go through like some use cases of how this could potentially work and what we'll be building and cool so um everyone probably in this room has been like hit by a scammer at some point or like been contacted like maybe by a fake exchange maybe by like a fake bd rep

or maybe even someone pretend to be a team member just to try and like get keys off you um and one of the things that like we'll be into working with partners in the coming kind of weeks and months is actually like skipping past this whole like nfts for identity thing and issuing credentials out so they can prove it who like people can prove who they are but very much like not building this around like one central entity and not necessarily doing kyc so this doesn't need like you to register with a passport it doesn't need you to um kind of go through like an onboarding process all it needs is someone with a reputation whoever that is to basically attest to who you are so for us as a company the fact that

we've been through outlier ventures base camp is like a good tick in our box the fact that we invested in by ignite is another thing we can point to and we can like prove and we can build up kind of reputation for both the company and the individuals who work for it without needing a centralized kind of orchestrator of all of this like a linkedin and the upshot of this is basically anyone can start proving who they are to each other without a central authority but also as we kind of get onto later on without having to write anything on chain like all of this stuff takes like uh takes place like above the top of the ledger with really like only the core capabilities on the bottom probably a cooler example though is like

actually making gaming um kind of portable so like this is the ability to like purchase avatar shift them shift experience shift reputation and basically bring those between games or ecosystems or meta verses um so this could be like we we've kind of blogged about this a while ago but this could be something as daft as like the charizard that you grew up with and created across like pokemon red all the way through to the latest games and raised suddenly you can take into like super smash bros and it has like a unique character set but it's also something you've created and had a relationship with for years it also extends like being able to prove avatars match the real life kind of

person if necessary um like obviously a lot of people online want anonymity but we're also starting to see people where they are a public name um like they're well known they have a profile and they're gonna start presenting in the metaverse and they need to prove it's them who is doing it um so a great example is like some ceos are like bands blah blah are starting to do addresses in like metaverses and they need to prove that it's them and it's not a deep fake and not someone faking their voice and so there's kind of wrapping all this up again and providing like proof that an individual is who they say they are and have that ability and this is kind of um we published this before the eu kind

of position paper came out recently um but this is looking at like if you were to start adding on privacy preserving um kind of reputation or kind of kyc on to d5 and we know that there's people like t grade and others are kind of looking at this as well um but what this effectually effectively allows for is like you can register get kyc'd and we've basically got this idea where um someone can spin up a pool they can set kind of entry criteria for that pool and they don't need to record really anything about the individual all they need to know is that they have passed certain criteria so in this kind of scenario you'd be able to have someone create a pool that excludes the us entirely so

they know that they would never need to worry about kind of the sec coming after them they may be able to set a policy where you have to prove you're over 18. you don't need to give your date your date of birth like your address your name anything but all they need to know is that you are over the age of 18 which you can kind of prove with a mix of like ssi which we'll be building out and also zero knowledge proofs which have been spoken about as well oh so if i go kind of just wrap these up like these were just a few examples of the kind of stuff that we'll be building but the kind of the bigger impact of this is like ssi across just everything so one of the best impacts that this is probably going to have is it should just

get rid of possible sorry passwords um like if you can authenticate to a strong level using data that you hold and do it in a privacy preserving manner you can effectively eliminate passwords out and we're starting to see like some of the bigger companies so um a vast antivirus bought like an ssi company recently um they're one the company they bought every name of one of our investors um and they're looking at like how they might build that into their their wallet um and kind of that's very much like off in the future but like they've got such a scale that if they go after this they could just eliminate like passwords entirely and that also makes it like single sign-on

so um i imagine again most of people in this room have how to create like a huge number of accounts for various stuff recently i'm finding that whenever i go to buy anything even if it's once i'm having to create a full account now which is pissing me off no end um and it'll kind of basically get rid of that as well like if you can immediately register transact without having to enter all of your personal details like the user experience is going to be so transformative and i think one of the current frustrations i had was i had the ktdi demo on my phone um obviously don't anymore having left the project but like i've seen what this can look like and it's so slick like you it's very hard to kind of go back to the current world where like things are clunky you're entering your details all

the time where you've not had to before um so this is where we get kind of get into the meat of it and like how this is different to some of the other like privacy um and kind of portability projects that you'll see so this is where we're kind of contrasting against like that maybe the likes of secret network um and and kind of uh when i i can't remember who it was he was speaking about like um like tumblers that kind of stuff and how this is a bit different so yeah this is the main kind of thing so personal data does not hit the ledger so um there are various different ways of implementing implementing ssi but one of the kind of primary rule like aims that we go for is personal data

just shouldn't be on the ledger and it really doesn't need to be either so the whole point of this basically is if you're putting data on the ledger as someone spoke about earlier it's correlatable like you can start unpicking like who's writing when even if you can't necessarily read the data you can start tracking people across the network and if you can start kind of breaking the encryption if that does happen you suddenly just expose a load of personal data that really didn't need to be there in the first place so that's where we get onto like what's called in ssi the trust triangle um and basically what this is doing is using decentralized pki which i won't go into too much detail on but like basically keys on ledger so that when data's issued and data's received like you can actually verify that data without any

any of it needing to be written to the ledger at all so literally across this you've got like someone issuing data to an individual that individual shares that data on the data was originally signed by someone and then the kind of person who receives that can go back and check that the signature on that data is matches who issued it they can check kind of the reputation of who issued it but they can also check that all of that data was kind of encapsulated encrypted and hasn't been tampered with as well and again all of this without hitting the ledger at all um and this is just in case anyone wondered what kind of did on the left-hand side yeah left-hand side of this was um it's basically a decentralized identifier and

kind of there's a really technical kind of jargony thing on the left-hand side but a much easier way of thinking about it is like a car registration plate all it does is uniquely identifies the car and tells you who owns it if you eventually trace it up um but the key thing is like these are typically on the ones on ledger are typically companies or organizations they don't need to be kind of individuals and they shouldn't be individuals like there's no kind of need for that at all and there are some pretty major benefits to this approach so one of the biggest things is much higher system throughput so i think someone spoke earlier about like you can like horizontally and vertically scale um scale networks and the beauty of this is because we're

putting less on ledger actually when we do scale vertically and horizontally we get much more out of it because there's so much less less on there in the first place um the other part when we're kind of looking at stuff like ibc is um we get a lot easier interop with other networks even outside the cosmos ecosystem and that's because kind of the primitives on the ledger are so kind of much more simple than other networks say that you can actually replicate them across ledgers and because all the data is also moving across ledger as long as each one is contactable you can start routing stuff kind of across ledges that's one of the kind of core aims of ssi is across the entire stack having

interoperability so you're not locked into one provider we're not just creating like a different data silo to a facebook or google and probably the final bit is like the really key bit which is um extremely privacy preserving so like with no personal data on on the ledger like there are so like fewer attack factors for this like you can't watch like signing events on the ledger because there aren't any with regards to personal data you can't look at the two parties involved because that's not there like suddenly you're really restricted into like um you you've got to literally be either one of the companies or the individual involved in that transaction or speaking to them directly to get

anything out of them and that's one of the really really big focuses of like the ssi ecosystem as a whole like is eliminating privacy leakage like it's very much come from a like privacy focus like we want to get as far away from the facebooks the googles of the world and very much back into like giving people back that control and giving people back their data um and to focus on on that kind of that last point again so drilling even drilling in even further like even though the data is going off ledger like you can still combine this tech with stuff like zkb so zero knowledge proofs um so even when the data's off ledger you can still restrict the data even further um and make it kind of much

more privacy preserving so um like a really good example for this and there are many where there's like this tech i kind of gave one in the defy side like makes sense um but for example like loads of people will have bought booze or cigarettes at some point and use their driving license or passport to kind of justify their age um especially when people are going into nightclubs like obviously you used to just flash an id card they barely pay attention to it and you'd walk in but now there's a much more focus on like people scanning them they're checking them against databases and all that kind of stuff and if you think about it all they really need to know is are you over over the age of 18. like that's it that you literally need to know that the id matches your face and you're over 18.

um and that's where this can get to like not only can you have the data rooting off ledger and no privacy blah blah blah you can also restrict what's being shared so you can really drive it down to just two pieces of data and not even kind of your date of birth so the creepy guy who's like or the bouncer on the door of the club doesn't need to know anything about you all he needs to know is that you're allowed in um so then in the final cut a bit i'll just move on to like what we're building and how it fits with kind of everything we've gone before so um basically like myself anchor and a rest of the team have been involved in various projects in ssi across like last four years um like we built some pretty cool stuff

with like a couple of governments like national health service a few others say um but the same thing kept on happening like everyone loves the paradigm like everyone loves the like privacy preserving side of stuff but the thing that was really holding it back was like making money like if you're gonna take data out of like a centralized silo that people monetize you have to replace it with something like you have to give some revenue that kind of chorus like covers it off um so what we'd repeatedly hear is like oh this is really cool the user experience is amazing how does this commercially work like how does this replace advertising revenue how does this replace like the service fees that i get so we're focused on like building a

a clear incentive model for the entire ssi ecosystem so um the example here is kyc um but what we're effectively doing is like when that data's issued and whenever it's used there's gonna be like a monetary value that's transferred and all of that is like pit it's blinded like no one involved like outside of the ecosystem could see no one outside of the transaction can see um but what it does mean is that whenever that credential is reused the person who issued it in the first place gets paid or the individual gets paid so an example might be if you use your passport um you can kind of get paid back for this um but the key thing here is really it just incentivizes the entire ecosystems

and our theory is basically that by kind of incentivizing these ecosystems you can start pulling all of this together and start interconnecting them so data moves across um and really for us the massive upshot for this is there are hundreds of thousands of these ecosystems um and yeah so it was the right slide so and this is maybe where it's slightly different to other projects as well so rather than trying to build like a vertical stack like we are focused purely on the network layer um and what that means is instead of trying to build like up into wallets up into like specific use cases what we're actually doing is working with like 30 or 40 of the ssi partners around the world to build on top of the network they already have clients they already have use cases

built out so we just need to make them more successful at what they're doing and then help them branch out into new markets so i think originally it was time for more questions but i just got the like we're running shot on time from agnes so i think we start and then at the point where i get tackled off stage is the point where we stop i've got one minute uh so yeah if there are any questions more than happy to answer if not that gets us back on time i think it doesn't work oh no it works okay so um did you also look at you could also like

monetize your own data with this is that also something you're looking at yeah yeah so um if i go back really quickly um you'll notice like there's a flow back to the issue a bit there's also flows to the holder so like we know that there are lots of companies focusing on like monetizing individuals data there's been loads of experiments with this and typically you don't make that much money like it's 50 quid for literally everything about you it's not a lot at the same time like there are definitely benefits to it uh one of the best examples we could see is like in um in e-commerce like there's loads of fraud tons of it and it's all basically credit card fraud um and one of the things here is that like there are loads

of um cashback sites where you get click-through revenue for going through ads like top cash back and and similar ones and you could basically do the same thing where if you do like you can use ssi to do like a one-click kind of check out experience and at that point it's probably worth rewarding someone for one dropping your fraud rates as well as like simplifying and having less fallout in the checkout process so like it's probably marginal but it's still definitely worth doing um i think we're kind of not like going headlong into it so it's something we'll enable and probably the thing that i should have said is like we're not dictating the way we're going to build this all

out is effectively provide tooling across like across the ecosystem so we'll just build the tooling and then let the ecosystems in the industries and the clients figure it out so we're not going to specify but what you've described really could quite easily come around by someone just deciding to go and build it on top of the rails great question by the way thank you very much thank you fraser just a quick reminder that we also have a side stage so in one minute there's going to be a talk from xavier from chorus one and i know some of you expressed an interest in it so if you want to leave now to go to the side

stage that's the time thank you and next one on the stage is max hamshire so here you go um where's the uh there it is brilliant thank you hi everyone oh bit sensitive that there we go so hi i'm max i'm the developer relations officer for nim and what i'm going to be talking about today are anonymous credentials on the blockchain so i'm going to be talking about our coconut credentialing system and our nics smart contract platform now if people have uh heard about nimba four then most of our

communications recently have been very much focused on our mix snap so i am going to go over that in this talk as well and then i will talk about the credentials and the blockchain very much kind of in context of excuse me what they do to actually support this mixnet as well as the kind of fun application level stuff that you can build on top of it so what's on mixednet the mixnet is a a multi-purpose mixer basically it provides network level anonymity for any kind of network communications and the way that we've built it it prevents traffic analysis by adversaries like the nsa which is something that existing privacy solutions such as tor

have are maybe a little bit weaker against i'm also going to talk about yeah like i said coconut coconut on the surface of it basically just allows third-party apps to anonymize any arbitrary key value pairs so quite similar to what um was just discussed with ssis we can basically have stuff like uh users dictating whether they actually reveal part or all of a credential that allows them to do something and then finally i'm going to talk about nics which is our blockchain and basically nyx is our cosmos chain that we've been using to host our cosmos and smart contracts that have been keeping track of both the nim token as well as looking at the rewarding system of our

mix now over the past year the test notes we've iterated through and now the main net that we launched last night [Music] before i jump into those i think i'll kind of i'll talk about the justification for why nim actually exists and it comes from this basic premise that the internet as we currently have it is broken uh the internet wasn't made with privacy in mind we've had privacy features kind of bolted on in a relatively ad hoc way over the last couple of decades but none of these solutions can basically defend against the kind of global passive adversary that stuff like the snowden leaks showed were monitoring the internet you know metadata is leaking even if you're using something

like signal or a private um you know privacy preserving cryptocurrencies like zcash you're still leaking metadata as to you know when you're sending transactions what your ip address is and all of this can be used to de-anonymize you vpns and dvpns essentially move the necessity of trust from you to them and like i said even tor can't actually defend against adversaries that can monitor the inputs and outputs of the entire network however tor and signal and the increase in popularity of them since snowden basically shows that there is actually a massive demand for privacy but both tour and signal and this has

become really apparent during covid really really relied on a lot of public donations that kind of has uh dropped off in the last couple of years when really that kind of funding should have been scaling so our solution is the first of its kind in the it's the first incentivized mixnet that we know of other mix nets have existed mix minion being probably the most famous of them probably the one that satoshi whoever they or the multiples of they were uh were using to send emails into the mailing list that we all know and love and yeah the mix now like i've said i'll skip that

the first network component so how does the mixnet actually provide this metadata protection and data anonymity much like tor when you root traffic through the mixnet it's uh encrypt multiply encrypted and it goes through multiple hops what this does is it unlinks the origin of the message and the destination each of the mixed nodes as well as the clients that are communicating with the nim network however also uh push cover traffic right so dummy traffic into the into the mix net and constantly passing it between them one thing i should also note when your data leaves a nim client it's encrypted in the sphinx packet format so

it's the same packet format that lightning uses and it's chopped up into identically sized packets as well so now if we're looking at the traffic what we actually see are identically sized identically encrypted packets that are also hidden in the crowd of kind of dummy traffic that's being sent around so you can already see just from these steps something like um you know traffic analysis attacks become almost impossible to perform on top of that as data moves through the mixnet there's a small there's a variable timing delay that each packet that is applied to each packet before it makes one of these hops again as soon as you have now a crowd of

identically sized identically encrypted packets all of which may or may not actually be being fired in order stuff like traffic analysis attacks almost impossible and the scalability of the mixnet is something that has become very important and is also something that the incentivization that we have with the nim token which is a utility token kind of powering the network allows for so tor at the moment has about six thousand nodes it's had six thousand nodes a while and it will probably have five or six thousand nodes for quite a long time however you don't always need that many nodes mixing traffic depending on how much demand there actually is for the network

so we're actually able to scale and shrink more importantly the network as required and here is a kind of a yeah a high level comparison of the kind of um the kind of network stuff that you can that you can see if you're able to observe from a user to a service or a user to a user with these different networks so with the vpn you can still see traffic coming out there's no timing delays there's no you know the size of packets can also give a lot away about what that data might actually be referring to and then used to de-anonymize you similarly with tor you know packets can also be doing otherwise like this

whereas with nim if you're actually able to observe the network all you're seeing is identically sized identically encrypted packets flying around there's not that much you can start to infer from what the relationships between the user and the service or a user and a user might be and yeah this is just a slightly more detailed explanation there [Music] so now the mixnets uh now i've kind of gone over the mix now let's dig into the maybe more cosmos uh related side of this and this is also stuff that we haven't really been talking about too much publicly yet so i'm excited to share it all with you so what are

coconut credentials it's basically our cryptographic signature scheme that produces privacy enhanced credentials and users basically will pay nim tokens to our validator set to create these credentials for them the kind of conceptual change that we think is really really important to highlight with this is it shifts the question of authentication with the credential and by credentialing you know you could also think of something as simple as like a javascript web token as a contrast maybe instead of asking who a user is when you want to log into github it wants to know that you're you with a coconut credential it shifts that

question to does this person who actually has this credential have the right to take the action they're asking does this person have the right to log into this github account this email address take part in this kyc the way the credentials are actually created so they're blind signed and what that means is that if i want to if i approach our validators i ask them to create a credential for me instead of saying hi i'm max could you make me a credential that would allow me to log into github what i would actually provide them with is a zero-knowledge proof that i am actually able to take this action so they don't know what it is that they're signing so even the validators are not

actually able to start de-anonymizing the people who are asking them to make the credentials for them they're also re-randomizable and what this means is that if you if i produced a credential for someone that for instance had the same identifier if that was used over a period of time you might be able to start to de-anonymize the person who's using it because you again it's leaking metadata maybe you can see what time they're always using this credential or what ip address is coming from something like this re-randomizability means that you can reuse the same credential but the people who you're presenting it to are never able to make a link between the first or 50th time you might actually be presenting the same

credential to them the actual generation of these credentials as well is split between uh our validator set so each one of them will only be producing a fraction of a single credential that they're blind signing that's also re-randomizable so again as these kind of uh as these characteristics pile up you can see that we're really starting to break a lot of the potential for de-anonymization with their use and yeah like i said before they're selective disclosure credentials the example that came up before we checked with um if you're having to prove that you're over 18

then yeah you all you have to do is prove that you're over 18. you don't actually have to say how old you are nor do you have to show you know where your ident where your id is from or anything else about you and the final thing i want to highlight about them is that they're ultimately like it's a very generic credentialing scheme and what i mean by that is that even though they originate from a valid data set they can actually be used for essentially any application that require a login an authentication or some kind of proof so i've been using the example of logging into github but you could also think of proving that you've paid for a vpn

service as a way of logging in as opposed to providing your credit card details your password your username or anything else that requires a proof [Music] the current status of our coconut credentials are we have implementations in both go and rust these implementations are interoperable between each other we are currently working on making or modularizing this code and turning it into a cosmos module which means that all cosmos sdk chains can utilize it but the code is in a usable state right now it just uh will become a lot easier to integrate in the immediate future

that said if you do want to start getting you know go ahead building with it reach out to me and i can talk about how that might be made possible for you i've touched upon a few use cases when i've been quickly going over what the different aspects of credentials kind of allow you to do with them uh but some of the important ones that i want to highlight are obviously over the past two years there has been an increased amount of surveillance just because of needing to constantly present either vaccine passports or and there has also been a lot more kind of scrutiny crossing borders going into places all of this

so we actually built a proof of concept of using coconut credentials to create a privacy preserving covid passport which basically instead of me showing a passport covered passport that as well as my vaccination status would say you know who i am where i'm from all of this um all it does is it shows that this person actually has the right to cross these borders because they are uh operating within accordance to for instance like schengen covet travel laws right but you could use a coconut credential as a replacement for essentially any kind of did or id system privacy preserving kyc also another example that came up in the previous

talk this is something that a lot of people who are both well both people who are developing applications wanting to actually have kycs is creating a lot of overhead for them to have to you know for instance make sure that they don't distribute anything to americans or airdrop anything to people from certain jurisdictions you can basically then instead run your kyc through a process of people have to present these credentials that someone else has showed that they don't fall foul of any of the rules that you're not allowed to do but you can apply this to currencies data access both like database access but anything else voting all of this

one of the things that is a little bit further in the future but i think something that could then actually be incredible for the ecosystem to bring it back to cosmos in general is that uh you know we are a cosmos sdk chain without we are ibc enabled but we need to work out how to tackle passing coconut credentials between ibc enabled chains how you could maybe generate one from the osmosis side all of this and within cosmos this is just a kind of aid interoperability within the ecosystem and kind of boost everyone up but when you're looking at chains like ethereum the actual crypto that goes on underneath the creation and the use of

coconut credentials is unrealistically expensive to run i believe someone in our team out of interest did try and do coconut credential generation on ethereum and it's over the block gas limit so kind of impossible to use at that point and once we've kind of done that we could start getting coconut everywhere else so maybe we could get coconut bridges on the horizon [Music] that then leads me into the third kind of main network component that nim has and that's our next blockchain the reason we called it nix was because the mixnet network is called nem the blockchain was kind of becoming increasingly prevalent and we wanted to

just disintermediate the two and make it a little bit less confusing also nyx is the one of the names for the greek deity of knight and uh it's just cool [Laughter] so what is next nix is a fairly standard cosmos dk chain ibc enabled and uh we also have the ability to upload and host kosum wasm uh smart contracts on there and the reason that we've maybe been a little bit quiet about that up until recently is that a causalism smart contract has actually been the thing that's been keeping track of thousands and by thousands i think our previous test now had over 6 000 mixed nodes so thousands of mixed

nodes gateways stake delegators all of the currency rewarding system and everything that went on between those people and we've been kind of keeping this quite low-key just to see how it would work but it's worked flawlessly through all of these mixnets so it has a yeah we kind of it's scalable and has a massive throughput and is also incredibly reliable the reason that we're also presenting nics like this now is that we've decided to allow anyone to actually upload smart contracts and use coconut um on our chain so we've basically decided to make nicks a kind of an open smart contracting platform that people can then join the nim

ecosystem on the application level with cosmos and smart contracts if they want to build like that so why why would you use nex one of the earliest talks today was you know talking about really discussing like the plurality of chains that we have in the cosmos ecosystem the ability to even kind of upload apps and then rely on the validator sets of the main cosmos hub so with all of this possibility there why would you decide to host your application on nix the first reason is the network security we have very very we have a very very good valid data set we have very strong network incentives for the investors behind nim

to keep this chain running and keep it secure the second reason is that even though i've kind of just talked about our plans to modularize and maybe bridge coconut you know it is going to be debuted on nix all the new features will be rolling out there and so anyone who's really keen to kind of start immediately accessing it will it's a good place to be for that and finally the kind of privacy community that we want to start building you know knicks is the home of the smart contracts running the mixnet and you know privacy-preserving apps will be in good company there they'll also be able to utilize having nim as the as a base currency if they want to use that as well and just take

advantage of the general network effects of being part of the nim ecosystem and like i said at the beginning i'm i'm the devrel officer so for developers nim has basically taken a shift now we launched mainnet yesterday as i've said so now we you know we've been really focused on infrastructure for the past year or so now we want to get people building we want to get people using these applications our grant program is going to be rolling out soon so if building on nim sounds interesting to you keep your eyes peeled for that also get in touch with me oh i know i finished my last point as well get in touch so i'm max at nymtech.net i'll be around i'm also in our key base and discord so

reach out thank you very much max do we have any questions i actually don't see oh yeah the box oh he does he has to see this hey thanks a lot for the presentation and the work that you guys have been up to so i actually have a question with regards to the credential scheme or i mean you've already mentioned that verification on ethereum is pretty expensive um i wonder how does the proof generation looks like in terms of uh efficiency and how practical it is to

generate those proofs on like constrained mobile devices etc so on mobile devices well our proof of the proof of concept that we did for the poverty passport that was actually building everything on a phone so it very little latency is always saying it's very usable even at this kind of like poc level uh if you're doing this in a desktop setting then you shouldn't really notice too much lag with uh the actual crit you know the initial zk proof that you're using to facilitate the blind signing when you actually ask the validator set to create this credential for you um yeah is there's very little latency though cool

thanks i think uh it's actually time i want to say congrats you just launched yesterday yeah thanks congrats noon apologies for being slightly frazzled because of that no problem yeah all right next up we have a bridge panel so i want to invite the panelists to the stage oh really i haven't done one of these on stage in a long time nice you brought your bag on stage too

cool all right so um this is the bridging panel obviously bridging is a massive topic at the moment um i'm currently on the podcast actually doing a series on bridges i've had deborah and sergey on so far although your episode comes out i think in a week and a half or something um but yeah i think to start off let's introduce ourselves and i know chris for this particular panel i had i i'm going to ask you a lot of ibc questions even though you're actually now at a noma so why don't we start with you debra yes uh hey thank you so much for having me here and i'm really honored to be among so many amazing builders and also thank you as uk validator for putting on

the conference it's been great um my name is debra simpier i am the ceo and co-founder of althea which is a decentralized routing and meter billing platform for distributed or multi-entity broadband networks which sort of led us to needing a bridge between stable coins and the ethereum evm ecosystems and cosmos so althea is also the kind of driving force and team behind gravity bridge so gravity bridge is a neutral decentralized bridge that's purpose-built to support the cosmos ecosystems blockchains taxes

and projects very cool i'm christopher i currently work as co-founder of anoma which is a occasionally ill-defined very large set of protocols for coordination privacy preserving bartering privacy preserving transactions and a whole lot of other things i worked previously as architect of the ibc protocol and i must say i grew up in oregon i had shitty internet i've never met you in person and thank you for solving a real problem hey everyone uh great to be here and thanks for the invite so i'm sergey i'm a co-founder of axler my background distributed systems cryptography uh spent a lot of time

kind of designing various protocols you know standardization of standards like bls signatures and so on and so forth and sometimes as a faculty at the university of waterloo and uh now we're working on a secure transport layer for uh web3 with axler very cool um chris i actually wanna as as you were doing your intro i had this question that came up so you work at a noma like you're now co-founder of a noma is a noma in any way an interoperability project do you think of it that way um is it a bridge in a way i guess i'm not convinced that interoperability will be a separate component of projects okay uh that's how i would answer that

question that's certainly we want to use and contribute to standards such as ibc very cool all right so i think um to start off i think actually this speaks to this idea of bridge philosophies let's maybe start there uh each of you i mean ibc gravity bridge xlr have different philosophies potentially so i'd like to explore what those are kind of what is what was the what are you setting out to do specifically with each of these i'm going to say bridges for now i know we have different ideas on what the name of these things are interoperability zones or something like that but let's just use bridges or bridge technology but yeah what's the philosophy of

gravity bridge oh good question um so we what's the goal i guess right and first of all i'd like to also share that you know my co-founder and cto justin kilpatrick really did a lot of the design um and and did the technical lift of the bridge so i'm here representing sort of the business aspects of it and i hope that you know folks will find that kind of interesting as well so when we looked at designing the gravity bridge we wanted something that was going to be simple it was going to be reliable and secure because we were looking at our end users which are other cosmos blockchains um you know uh dexes and other like

infrastructure in cosmos um so with that in in mind um we [Music] we sort of looked at basically let me kind of back up a little bit here so basically looking at the user case of other other blockchains you don't really want to think about your bridge right i don't want to have to think uh about whether it's operating so we wanted to make something that number one um other blockchains didn't have to think about was always going to work was very practical was gas efficient for their end users as well um in fact with gravity bridge and the batching

technology we're able to get sends as cheap as 1 8 of a cost of a normal erc20 transaction and we wanted it to be able to be simple enough that we didn't have to have an upgradable uh contract from the gravity uh sole or the ethereum contract so that makes it very secure but expandable in that functionality so you spend a lot of time really getting those fundamentals right it's not a lot of bells and whistles and flashy things but um it just works and you don't have to think about it cool and one thing about it is like it's it's primarily focused on connecting ethereum to ibc right like that it's sort of this one too many many

to one would you say like that is that the primary goal of it yeah i think you know um we wanted to use yeah evms right we want to do things well right and then iterate on that process i think you know to chris's point earlier about you know maybe interoperability is like part of the innate future um i think that may be the case but for now we're now at a situation um where we want to do things uh you know get that user adoption it really is focused on um what works now um and what's needed now cool okay ibc if you're gonna put on the ibc hat for a moment uh what is the philosophy of ibc what does it do what's the goal what's

the goal of it i mean i think most people here know but sure i mean i would relate the philosophy of ibc to at least for me the philosophy of decentralized infrastructure in general which is to allow those who are using a system to also control it of course those mechanisms aren't perfect i don't think we've succeeded yet you know validators and the users of a blockchain are pretty separate groups but maybe we've made it closer than you know one party and like you know the fed bank far away right so we want to bridge those gaps and while bridging those gaps we also you know communities want to interoperate as they control their own infrastructure they also want to interact with other communities while uh in some ways perhaps limiting the way

that they do so if interactions you know that they might have with other communities could lead to harm back to their community in the future so ibc just provide ibc is unopinionated about the content of those interactions but it tries to provide a framework to allow the choice of how to interact with other communities to be deferred to the user and that's and that's the thing is it's a framework it's a standard it's not a zone of its own obviously it's not a token it's not it's completely non-competitive it's not you know you don't have to do anything or buy anything or be anybody or talk to anybody or adhere to any you know it's just a standard people can use it's a language it's a language it's a glue between the zones so this is just sort of nice to start to see those

comparisons okay let's talk xlr philosophy yeah it's been pretty simple from day one it was to allow any user to use any asset on any chain all right so and i think to get there you know you have to realize continue to have three core properties i think one you have to have decentralized and secure architectures that scale right and support um decentralized protocols at the bottom two you have to think about you know how do i enable what i call as like one-click experiences for the users right um it's like i click my transaction goes it arrives an application it's executed i don't have to think about you know bridging protocols or anything like that and i think a third one is the scalability

right i think our goal from day one has been to build a secure kind of transport layer for web3 and that includes being able to connect you know millions of chains and thinking about what is the architecture that's going to look like you know is it the combination of ibc maybe other things how do we get there and two being able to do arbitrary you know information exchange so not just token transfers being able to send messages being able to exchange you know nfts and so on and so forth and so i think those three core properties security one-click experiences and arbitrary scaling is what we're focused on i feel like with a lot of the bridge projects i mean one question that people may have is like we have ibc why not just encourage everyone to enable like to have this as the standard

are there reasons that you're thinking about maybe where this either doesn't work i mean i have a few ideas on that or that you don't even want that to be the model of the future you wouldn't want every network glued like kind of connected to every network but rather have some sort of hub yeah that's another great question um i think ibc has a lot of the idealism that um blockchains really strive for right that resiliency and decentralization um but i think there could be a potential pitfall here and that we are just we could end up designing uh app blockchain or a specific blockchain to um

the need to interact with ibc um rather than designing for what's best for that blockchain and i certainly think what's exciting is we now have you know a lot of new blockchains sort of coming online and new bridges and we have a multi-bridge future that marketplace is probably going to start to inform what our ultimate ibc protocol looks like right um but i think uh absent of that sort of competition in that building we may end up designing um a product that isn't doesn't have product market market fit i mean so

i guess just to step back i think you know my first i guess interaction and thinking about ibc in general were like in 20 what was it uh 2018 i would say or maybe early 2019. so we shipped the outground blockchain with my co-founder jorges and you know we're thinking about interoperability protocols right and you know kind of looked at cosmos ibc i mean great stuff was built and we're just thinking well how do i adopt this to the outground blockchain and um you know um kind of why the model is great the practical engineering hits you pretty hard in the head uh pretty soon and like especially like for our grant i think we'll literally have to like rewrite a lot of the consensus pieces just to make it to work so um it was really hard to you know convince anybody to do this i

would say and it was really hard to you know allocate those types of resources and say well you know now we have to change like the way we built consensus for the last it was four years from the research until you know until we shipped the blockchain and so that engineering kind of hit us pretty hard in the head so hard to scale across if you want to innovate on other things that being said though i do want to decouple a little bit and you know recently wrote a blog where we try to structure a little bit different layers of interoperability right and i think it's important to understand like there is the kind of the transport layer of interoperability there is a verification layer and there is a message semantics layer right and i think it's you can stay take ibc you could also decouple it in those layers

and say who provides the transport what provides you know message verification which are light clients for the purpose of ibc and what are the packet semantics on top of it right like what is the format in which we send messages um so while i i think the verification pieces serve pretty hard to scale the lite client you know you could decouple these layers and say well message semantics for ibc could be reused across different ecosystem we can code those on top of other transport layer or verification layers while still being able to talk to one another right and so they're already decoupled i know they're decoupled i think very few people know how to actually work with that decoupling so and like i understand that so but yeah so i think it's a um yeah so i

think it's important yeah to educate people on the decoupling and what we can do with it to kind of continue making advancements faster that's actually that leads to a question i just was thinking of which is like would would it make sense to build i like to not rebuild ibc but like since it's hard for other blockchains to implement it it's mostly built to work i guess with the cosmos sdk but like could it be rethought to work with other kinds of blockchains or is that like a crazy idea uh i i think it's tragic that it hasn't happened yet okay i mean there maybe it's worth distinguishing between ibc the sort of theoretical protocol architecture that has like a spec and abstraction such as like clients and ibc the concrete implementation which is

easy and inexpensive in terms of developer time to merge into your blockchain you know in a few weeks and the former has a kind of extensibility that the latter doesn't yet have in practice yeah so there are great implementations of ibc available in the cosmos sdk and go and in rust but you know for other blockchains with other like clients on the signature schemes even if it's sort of possible in principle to integrate that into the ibc model uh it if if it's not yet cheap enough practically then yeah people may not do it boundary of ibc is not a fixed thing so ibc is like just a sort of set of abstractions around interoperability just as like tcp is a set of abstractions around sending packets and you can come up with uh say new light

client algorithms which would expose different uh consensus algorithms to the ibc ecosystem or you can come up with you know i would say like gravity bridge not the instance uh but perhaps the protocol could become part of ibc you know it doesn't the the we can separate here the concern of what should the specific instantiation be now which is a very pragmatic one uh not to devalue it at all but that that has to be made on on i think on the terms of like what it what are the conditions at the moment who can work on this who wants to use it like that has to be made on the basis of practical considerations uh whereas we can also leave the path open for you know the topology of real commerce on the network which the security architecture in order to be secure has to reflect we can leave that

topology open to future change by building the protocols as a kind of stack which is independent of the specific like tokens and the specific instantiations yeah just 100 agree with that and i think that the market is really going to drive you know how this this um you know moves and changes i also think too that we we all still have this fundamental like kind of tooling and node infrastructure issue that sort of is where a lot of these pain points to evolution of both ibc and bridges is you know kind of hurting right now one of my questions was about like could bridges become this sort of centralized point of failure but before i go into that it's like the ibc world the way that it was originally presented was very much like

this mesh or this net is that like now that we're starting to see it in action are there kind of like still hub and spoke kind of entities forming even with ibc like is that is is it a perfect mesh basically or not i mean so yeah i have like a lot of thoughts on this but uh i do think you're gonna see you know hubs and i think you're gonna see spokes right and i think it's i think it's sort of fundamental for the blockchain ecosystem and here's the reason um you know whenever you're talking about like peer-to-peer connectivity right like look at two extremes okay extreme number one everybody's connected directly to each other great extreme what is what is the result

the result is like and you know in the order of n squared connections impossible to manage right like you know nobody's going to run so many relayers nobody's going to maintain these many connections that cannot work right the alternative extreme is that you have you know one hub and everybody talks to that hub again what is that hub gonna have a million connections probably not right um you know so you're gonna end up like in an architecture where you know there are some hubs there are some peer-to-peer connections how did the internet shape up right it's sort of uh you know you're going through multiple hubs on average you're taking kind of a 10 to 20 hubs to send the packet the challenge with that on the blockchain space is that every time you take an extra hub you take an extra security assumptions right so you're

trusting another validator set maybe you've interested in another protocol and like those continue amplifying and amplifying and so you end up with pretty much nothing if your packet has to go through you know 20 security assumptions and kind of hubs help you minimize the the trust assumptions as you're kind of moving the packets from one connection to another i think it's kind of interesting though i think it's a bit more nuanced on that because many of the validators run the real air infrastructure right so we were talking earlier about like interchange security um and liquid staking and then also the sort of problematic um centralization of like white boxing and white labeling validator sets right so perhaps it doesn't really look like a hub and spoke model from the outside but really we you know we are um you know

doing that underneath the hood right so i think there's there's other sort of um you know perhaps more nuanced more subtle ways that centralization and aggregation happens across at least the cosmos ecosystem yeah i would add to that that part of the design of ibc which hasn't really come into practice yet uh is uh fault tolerance for byzantine behavior not in the sense of byzantine validators but in the sense of byzantine chains within the ecosystem and we haven't seen this yet because we operate in this nice world where we're all friends and we go to conferences and talk to each other you know people are rational but they're also kind of nice and they don't want to be rude to the guy who they're having drinks with we're not yet in brutal competition nor are we in like cases where there are

i mean most of the usage of blockchains is imaginary financial speculation let's be honest we're not in cases where we're dealing with real-world power structures who will try to subvert uh many of these mechanisms for their own specific ends and i think continuing to design protocols that are tolerant in this way is extremely important even though we're not going to see that realized for a long time say you know it's not clear proof of stake will work in the long term in the long term considering like the practical economics of validators and like how delegators make decisions there are lots of areas in the design space that need to be explored before we can see these things in practice i had a question and i'm blanking a

little on what it was what was it well you're thinking that i could actually uh continue the conversation i i think that it it is interesting that you you bring up you know hey we're all friends we all go to conferences one of the things that's really interesting to me about cosmos is like the ecosystems are the same the validator sets are the same the communities are the same you know we all cross-pollinate a little bit right so what sort of happens when we cross-pollinate with our security right we start to do that with the you know liquidity that was questions about what happens with those derivatives right like how does that actually affect um you know i would be curious your thoughts about that in terms of like bridging or interoperable protocols too because um you know maybe these communities start merging more and more together right

staking derivatives are terrifying they keep me up at night i mean in some sense it's easy to turn anything into a fungible asset yet fungibility is also the very property which like say validators are secure only because they are not fungible right if votes are a fungible commodity that you can buy then you you know you no longer have any kind of guarantee provided by this decentralized well and i think we're already seeing that with like things like bribe dow and you know that's already you know coming to the ecosystem where we have to decide where we what we feel about it sorry for derailing no problem thank you because it gave me a second to find my question which had been actually this original idea of the point of failure our our like bridging zone so i think

ibc wouldn't necessarily fall into this but like a hub of ibc connections could or these bridges or these interoperability entities are they i mean we have examples of hacks that have happened oddly except for the most recent i guess oddly they either get bailed out or they the funds get given back it's sort of still friendly um but yeah what what about like are the bridging areas are they going to become the points of attack are they a point of failure for these larger networks of blockchains um i mean yes is the answer but uh you know i think in some sense it's like no different than um kind of just

building in web 3 right or d5 i mean i always give an example like okay like early d5 we saw hacks because people were shipping you know crappy code not audit didn't know how to design things securely and so on and so forth and we kind of went through a couple years of iteration until we see protocols now that you know even sometimes they still find um you know find find vulnerabilities so you know interoperability is a new space so i think we saw a lot of ad hoc solutions being rolled out which hopefully will get replaced over the coming years um so i do think we can make it you know better and i do think we can make it secure i mean that being said i think also i mean we've been exploring some ways you can actually compose security across different um across

different protocols or potential across different paths right so for instance you can imagine that like i'm gonna i'm a protocol you know on ethereum or in cosmos and i actually would check that like two paths have verified my traffic and those are like independent paths and only then i execute a message and only then i sort of authorize it so you can actually do quite interesting things to compose make security better remove some of those centralization uh uh kind of problems that you talked about uh you do have to have very kind of strong engineering on the back end and the you know rigorous audits and things like that cool yeah i um i think a lot of these hacks are somewhat mischaracterized right so what's happening here is the trade-off

between security and usability and ergonomics speed um things like that right and a lot of the reason why um the bridges the bridge tax get paid back is because really those those bridges aren't necessarily acting as an interoperable neutral infrastructure layer they're really operating like it with axia it was you know it was an axi bridge right they're operating to serve some other kind of thing so they make the trade-off for a more efficient centralized design which you know then leads to the very problematic design challenges um so i think that's impo that's why it's important that um that neutrality and the interoperability

of that infrastructure layer itself is really important right um and we don't make those trade-offs um in terms of efficiency uh and i think as the tooling and and efficiency like with gravity you know right now it's even a profitable and sustainable bridge um you know we're able to get gas costs down as these bridges become better um then people will be less likely to make those choices at least that's what we hope but i think to a lot of end users a lot of these security properties are just not you know disclosed right so for them it just all seems like well are all bridges bad yeah um you know in many cases this isn't even really a decentralized bridge it's you know a

three-person multi-seg or something yeah i mean i would say growth incentives are dangerous you can only optimize for one variable at once if you optimize for growth of your system and sacrifice security trade-offs whenever those decisions come around then eventually it will fail uh you know it's not the good news is that i mean it's it's unfortunate battle testing in the sense of do consumers who are using these systems understand the security models know are they communicated to honestly no or their intensive organizational efforts being put into telling users like how precisely the system couldn't fail and enumerating the ways in a way that's understandable when doing so would be contrary to the financial interests of the organization's operating web apps no i mean but at least we're battle testing

it and there is you know the question is whether that feedback will translate into kind of a collective consciousness of which sorts of system designs uh have which properties in operation or whether it will be sort of warped and never really uh result in the right bridging protocol such as ibc being adopted uh really my bias there i would say one more thing and i promise i'll shut up uh i don't know currently we get away with bridge designs that are basically content blind so as in the security of a bridge you know we have some formula we have some like decentralized validators that controlling the bridge and all transactions across that bridge are treated as the same both in the sense of like we don't subject them to different

confirmation times or different uh additional authentication through separate paths and in the sense that to the user we don't like the wallet doesn't wait for longer we're not we're not we're not changing uh the like dynamics of what we treat as finalized or secure based on the content i think that is it's nice and it's convenient but if we look at real world systems like banks of course they authenticate transactions based on content if suddenly i wire everything in my bank account to you know somewhere in in southern africa my bank will go what on earth are you doing um of course finding ways to do this that are also permissionless and uh privacy is hard yeah it's very hard but uh uh there are like users could write their own sort of configuration for what

to allow on their account if we move towards a more programmable account model um well and and i think in that model it becomes very interesting um the community governance aspects right you know you have something that would happen with juno right the social consensus um would they be perhaps censoring those transactions the community's saying no we don't want this or not we do and maybe that's a good thing but i do think that that it's um a bit uh it could be optimistic or dystopian yeah transparent blockchains are a terrible idea stop using them there will be authoritarian governments in the west in like they're already authoritarian it's going to get worse do you want your financial history now to be visible in 10 years are you sure you can never undo it i'm

sorry that's about to lead me to the next thing which is privacy but go go for it but yeah no just kind of a quick little to add right like i think to your point though like should bridges like you know treat transactions sort of differently and things like that i i don't think like at least my philosophy like british should not treat transactions differently but you can get that security at the application layer at the end at the entrance and exits essentially yeah right because i think if bridges start doing that i think you're gonna get lead into you know pretty kind of complicated designs where you actually have to manage this complicated infrastructure layer but you can do all of this at the application layer yeah so i wanna we don't have too much time i wanna open up to questions but first i wanna just

bring up the topic of today which is privacy uh and bridges it's a topic i feel like i'm kind of constantly trying to like put into the conversation but it's clearly not like a bridge topic privacy like i don't know of any bridges who are like thinking first and foremost about privacy that's why i was asking if a noma considers itself sort of a bridge because if so you'd be the one that i that i could point to but yeah how how do we think about bridging and privacy is it always going to be an afterthought so i think um you know no matter how much i love privacy and like you know i spend my time in cryptography i think privacy is always comes after you get some functionality i think we're in a phase where you know we're still kind of

setting up this core connectivity pipes and like dealing with attack vectors so um you know i think that's why people haven't thought about privacy too much yet i mean that being said i think you know we talked about it last week right and i'm super excited to kind of compose interoperability with privacy preserving like hubs or networks right where you can kind of send packets uh do some privacy preserving operations within it and take your messages or assets out somewhere else so i think that would be the first use case where we'll see kind of privacy being composed with other ecosystems which i think is going to be really powerful i like that distinction too because i think often when we think of bridges we're thinking about token transfer so moving tokens from one to another but when you start to think

about bridging messages then you can actually you're doing something in the private zone but it's not just that you're putting tokens in the private zone that's very different you can like move some part of computation or state do some stuff on it get the result back and without having to like bake into privacy into you know your layer one from day one so you can talk to nim right or some other chain to kind of get some of those properties and i think one of the challenges always with the bridging idea is that the way we've been thinking about it is you'd have maybe a zone or a chain where you'd have maybe a shielded private part but in order to actually interact with the bridge they all the sudden unshield or de-cloak as i've been trying to push in our last episode [Laughter] start let's put a star trek reference in

there but they have to basically reveal themselves before actually moving over the bridge and this is where the privacy is often lost and i think this example of using the message passing part of the bridge is kind of a cool thing to think about i don't know has it been mapped out is this something that any of you know research is being done on what that would actually look like what could it enable privacy on message passing and bridges no it's more like being able to do message passaging into private networks and doing something in there we're starting to do this with a couple of partners um yeah with like manta network and a few others so i think it's early days but yeah i think we can we can map it out

yeah and i know henry from penumbra is here somewhere so i i'd like to hear your thoughts on that at some point yeah um i wanted to add one point just earlier to on the topic of general like privacy and bridges i think there's an intersection here that isn't discussed very much which is the privacy has big implications for bridge security because many of the if you like model the attacker of the bridge they have some in order to determine like what to attack how to attack they need to be able to glean information about what is going on and generally especially they need to be able to glean information about the content or transactions on the bridge like is it valuable to go attack this bridge is there a lot of you know funds there or transactions i could afford or something like this and if all

the transactions are private that's much harder so privacy can have benefits of course it also makes it harder to see like is there something going wrong so there are complex tradeoffs on the second bit i would say i mean privacy in a like complex distributed system such as you know the ibc ecosystem taken as a whole is in the sense that where how users are using it interacting with multiple chains going through multiple change privacy is going to be as weak as the weakest link the weakest link will be bridges if the bridges are always enforcing decloak on one side cloak on the other we need private bridges we need it to be standardized um we at enoma let me show one sec we'll help try to help and hopefully you know anoma penumbra you know anyone who wants to basically can adopt a kind of ibc

shielded transactions awesome i think my i also think this is really fascinating and i think over the next few years we'll definitely see this evolution but i think one of the reasons why we haven't seen more progress on this right now is just some of the like the node infrastructure issues we have to you know share so much information right now um that you know the encryption overhead is even harder higher than you would if we could pair down um and we had better tooling in the cosmos sda infrastructure so um you know and this is even between when ibc first started coming out and the failure rate versus where we're at now i think is a really a testament to to everyone there but unless we number one um you know sort of work on that pain point and number two find ways

to incentivize working on that pain point so it makes sense that you know you know relayers uh can run a light enough infrastructure that they're able to make money and um and then then i think we'll see privacy follow that but we have this kind of big you know work to do that's kind of boring and right now isn't well incentivized that's core infrastructure all right i think i want to open the floor to questions if there are some ah there we go first of all thanks uh for the panel like it was really interesting and i have few questions uh one it's about token fungibility so what is your answer

to like importing uh different versions of the same token depending on which bridge you are using and another question i have it's uh about bridge monetization like us i guess we are approaching into a multi-bridge ecosystem then how to guarantee the development and the continuous like uh management from a technical perspective of bridges and that's right and then like what uh what is your opinion on on peggy that is the bridge deception has been running for one year uh about it you may cause you have three questions that's it first one is fragmentation of liquidity or like

exact like the same this is just to be clear it was like if you have multiple uh versions of the same kind of bridge token on one network is that yeah exactly it's like how to avoid to have the the ethereum version of osmosis uh against the ethereum version of another bridge and so getting into the token fungibility groups and make sure that we are all working with the same version so let's start with that one sort of this yeah i think i think it's a great question you know it's interesting because i think you know maybe last year or so before i think there was like sort of the thought that maybe there could be like one bridge would be the standard and you know obviously that's not the future we have a lot of great bridge

teams and um so different assets is is the reality um i think you know certain like fungibility you know a sift chain has actually really led the conversation on that um which has unfortunately not really gotten a lot of traction but i think there's some also some interesting ideas about pooling the assets too um that you know with liquid syncing or superfluid staking that could be also somewhat interesting so um you know we're going to have to we are going to have to face this reality very soon yeah i mean i i think for the business like can be solved i think if you decouple again like application logic from transport logic effective application logic you can you know you

can have things like you know authorized transactions from like this bridge or like this path and like only then they can be minted so um i think like you need to decouple the reason we're dealing with it is because token transfer has been baked into the bridges which is horrible so i think you have to like you know separate logic a little bit and deal with it at the application layer asset fungibility can be solved with the protocol layer it just hasn't happened yet you need two-phase commit between the three chains involved then you can get rid of the diamond problem because uh all of them agreed that it won't be double spent and then you can treat them as fungible and it's safe but it requires consensus protocol changes and cough public goods infrastructure funding cough those don't easily happen because we're

all busy launching more tokens on different blockchains we should all just work in one organization and it should build one blockchain and we should be done it should work you know one protocol to rule them all one protocol one protocol many different blockchains you know but one protocol or one like integrated set of protocols all right question number two is about maintenance and tokens on the bridges themselves yeah yeah the monetization of bridges in order to make sure that the bridge is sustainable from a funding perspective so gravity bridge is profitable right now we really designed that so that the the token holders could get any sort of fees that they would through community governance pass in the native tokens that come through so that makes a really

um you know uh aligned i think way of interoperating with the other blockchains who are core customers um and uh the relayers uh relay profitable batched transactions so you can send transactions instantly or you can choose to send transactions you know when they're batched and then they're relayed when they're profitable so right now we're seeing you know folks that want to spend less gas you know and get into a box transaction they're going to be you know an hour to like four hours somewhere in there and then instant transactions go across but right now it's working it's profitable and it seems to be um you know able to be scaled in that same way yeah i mean i think uh

modernization and uh long-term um sustainability is no different from like layer ones or other infrastructure projects you know you you charge fees for processing requests and you know you just have to make sure you you know cover all the gas costs on the on the chains you're bridging so you just have to kind of be a little bit careful there but um i think it's it it's it's not too hard in some sense you actually have a lot more flexibility because you're dealing with you know multiple tokens and multiple networks so you can charge a little bit more and the source uh you can charge a little bit less and things like that so you have a lot of parameters you can tune in i want to see if anyone else has a question because we did answer two of yours cool maybe it's kind of too new but with

interchange accounts launching like what kind what kind of opportunities does that have for like executing transactions in a private way on blockchains other than the blockchain you're on and then would if you wanted to do something truly private would you have to be in like a fully private zone and you could only then interact with other private zones or is there actually scope to have privacy from like a non-private zone to a private zone something like that i don't know if anyone no yeah i didn't get this one i'm just i'm just wondering like what kind of opportunities there are for like um executing actions privately through

interchange accounts but whether there would be limitations on as you're saying like privacy is dictated by the weakest link like would you only really be relevant if you're just dealing with fully private zones and such or could actually be an opportunity to have private actions executed from like a less private zone or something i mean i think this is yeah a little bit back to the kind of conversation we had with you know general message passing and i think entertain accounts is sort of in that direction is that you can pass an arbitrary message to ask you know a different zone to execute like computation on your behalf right so as long as like you know you have zones that expose this functionality you can um you know you can send them

information there you can ask them to do interesting things in a in a privacy preservative way so yeah i think of interchain accounts as like a step towards that did you have a question um is this is this on what yeah we can hear you um yeah i mean i don't know if that question was necessarily specific to bridges maybe more of an ibc question but um yeah i wanted to to ask um there it seems like there's a like a time preference um that's starting to that we're starting to see in message

passing so um the gravity gravity chain for instance does batching on like a daily basis or something like that and i think xlr has some options where you do like low time preference high time preference how do you see the the kind of classes of user and and message passing evolving and uh and how how do you imagine kind of servicing those users that's interesting different timings so to hearken back to an earlier presentations and nem earlier talked about a mixnet right and if you have in this hypothetical world which we don't live in yet but

where we have private crosston interchange accounts and now all the transactions are in private then we have the like statistical attack problem because you can see if you see which messages are going between which blockchains even if they're encrypted you can perform timing attacks so batching helps with this you want to batch private transactions or private actions in that way for the same reason that you want to batch packets in a mixnet and i would say yeah i mean they're like a lot of interlacing dimensions i guess you know batching can often save on costs but it can also provide additional privacy and in the long run that might even be the dominant consideration i think the question also has to do though with like this preferential treatment for like some users going faster right we're kind of like treating

like we're putting everything right now under the umbrella bridging but like what we're starting to see is like actually a segmentation of the market into okay i'm an mev trader and i need like fast execution and maybe maybe so fast that i want to use a centralized bridge rather than a decentralized one or i'm a privacy preserving user that it has like a low time preference and i can wait like a month for something to come out of the bridge and be fully anonymized um there's oracle messages or nfts versus fungible messages like these have these are also kind of segmentation of the market and

and so yeah i'm interested in your views and kind of like how this differentiation in the market is is going to play out yeah i think i think it's a great question and i think you know gravity bridge really sort of uh came from the uh onboarding of like more users and that aren't currently in the crypto ecosystem so that's where a lot of the thought process around batching and making cheap transactions and exposing those choices to the end user i mean i think is ultimately um you know the the goal of what we need to be able to do the crypto market is still you know small right and we're going to need to be able to support institutional capital support a larger um set of you know real

world users um and so uh and and um you know we need to build for that sort of user choice yeah i mean i mean i think it's some in some sense like the problem is again like no different than like problems on layer one infrastructures themselves right because uh you know gas fees sort of dominate in some sense uh performance and so you know depending on how much user pays like they'll get a certain process in time and i think kind of bridging being infrastructure uh inherently suffers from the same problem i mean i think privacy here can actually help right and you know with you know either batching or just privacy preserve in ways that you know you can upfront around users

because you don't see what the transactions are um as they're moving through the bridge so uh but yeah i think uh it it's a similar problem that i think just expands beyond bridges yeah i would say i mean how to think topologically about sort of user prioritization from a protocol design perspective depends on what we want the system to be able to provide as product level guarantees to users and one thing we might want like a financial system to be able to provide or sort of economic system to be able to provide is quality of service for individuals taking actions in the physical world that are predictable in advance i want to be able to buy coffee i want to be able to pay my parents far away i do this you know roughly at this

frequency they're like real world things happening um in order to provide that i think we probably just cannot get around a hard problem of identity uh like you want if you want to provide most you know with m most people do with their credit cards are sort of interacting with economic systems it's a few times a day or something in a predictable way i think it's critical for ux reasons to be able to provide predictable low costs and guaranteed like low latency for these uh specific interactions to users they can plan their lives out in advance and we probably won't get that without identity one thing i wanted you mentioned qos right so this is like very much that intersection between internet though too so right now the carriers decide like the qos right so i guess my point earlier was that i 100 agree with

you um but i think it does have to come back to like let's make deliberate choices right now that expose this qos to users so they have that choice cool all right i want to say thank you to the panelists of the bridge panel i know we've gone a little over but uh yeah thank you so much thank you thank you so much i think we're about nine minutes late my apologies we got into it yes and i just wanted to remind you as well that there is another side stage and we're gonna have a last one uh talk at the moment it's gonna be a stargaze mev in nft primary markets so if some of you

are interested in this subject please join us on this side stage okay and now i'm gonna welcome on the stage vish modali from quicksilver [Applause] hey guys i'm wish i'm one of the co-founders of quicksilver i'm the chief product officer i deal with things like like business development partnerships and thinking about the feature set of liquid staking so i guess the the term liquid staking has been thrown around a fair bit

uh throughout the course of this event so i guess it's it's now time to address what liquid staking is and what the quick silver solution is so i'll high level go over what liquid staking is the problems that liquid staking solves the problems that liquid staking creates and and what quicksilver's take is on on all of this yeah so so i guess to tell the story of liquid staking it it would be useful to first like just high level go over what what's taking us now most of you are familiar with this but in most proof of stake blockchains asked holders wishing to stake their tokens in order to earn a certain reward are required to lock their capital this locked capital acts as a security deposit uh for the

validator so if a validator misbehaves this security deposit is slashed and that's supposed to be a dissensing disincentive for validators now the concept of liquid staking is to issue a representative token on this take position so the representative token not only represents the stake positions but also any rewards that the stake position accrues and any risk that comes with with slashing now there are many models of liquid staking that have gone around the concept itself has been around for the last two years there's lido there's pea stake osmosis is working on their own version of it so the concept in general has been around but the but the core of it has been the same that you have an asset uh which is representative and

that's liquid staking so a good question to ask at this point would be why liquid staking and why liquid staking in the cosmos ecosystem and my answer to that on an economic level would be that there is this fundamental capital efficiency problem uh in in the cosmos ecosystem and i think it takes two forms the first is that in most cosmos sdk chains only five percent of staked assets are actually slashable meaning that 95 of of assets though they contribute to economic security are not actually slashable so they can be used elsewhere and it's this promise of being able to use elsewhere uh is what is what brings up liquid staking uh i think as of today as of this morning

this value is somewhere near 40 billion dollars so it's some pretty big amount of capital that is sitting in staking the second capital efficiency problem i see is that the cosmos ecosystem has adopted this path of high-staking apis to bootstrap economic security now high-staking apis are considered to be a good thing because they bring this security to change but high-staking apis obviously make d5 uncompetitive now if you look at this from the perspective of an application specific d5 chain they first have to give out higher a high staking api to get economic security on their chain and they also have to dish out a lot of incentives to actually be for their product to actually be competitive

uh with traditional staking and obviously this is not sustainable for for uh it's not a long run sustainable for a d5 ecosystem but the thing is it was never supposed to be a long run thing high staking aprs are and were supposed to be a temporary thing and they are high-staking aprs will come down at some point but the conventional wisdom or the conventional economic wisdom uh with regards to this was that when these high-staking apis came down and stabilized a d5 ecosystem would emerge out of this low-staking apr environment now that would have been true if if ibc did not take off in the way it has taken off where it's made the entire cosmos ecosystem or at the end of the

entire ibc ecosystem system into one interoperable economy so the risk here is that there's always going to be these powerhouse projects that come out with high staking apis and and these staked assets instead of being freed continue to remain locked and keep migrating from chain to chain chasing high-staking aprs and obviously this would starve the d5 ecosystem or any potential d5 ecosystem of the collateral or the liquidity it needs to grow and flourish so it's pretty clear that there is some level of competition between d5 and staking and and we don't even need to think about capital efficiency capital efficiency to reach that conclusion

even on a user level there is this age-old question do i stake do i provide liquidity and sooner or later it's going to be do i do 10 other things right and the goal of liquid staking is to remove this inherent competition and make both of these verticals function together in a synergistic manner so so so far i've made the economic case of liquid staking right but i think cosmos is also architecturally in the in the right place for mass adoption of liquid seeking and really leading uh the charge uh in in this field and i think that comes down to two core technological innovations in in cosmos the first is is the liquidity staking module being built by zaki and the

occlusions team and what the liquidity staking module does is that it tokenizes a stake position to produce non-fungible delegation shares these non-fungible delegation shares are then consumed by liquid taking protocols like quicksilver to create fungible and fungible liquid tokens which can be used anywhere now the cool thing about this is that it changes the user flow of staking completely traditionally if stakers had to be onboarded into liquid staking they had to unstake their assets wait for the unbonding period and then deposit their assets into a liquid staking protocol now two things happen there one they lose out on the on their rewards for the unbonding period the second thing is that it also constitutes security risk

because a lot of users may on bond uh in order to enter uh the liquid-taking protocols that will come up so the liquidity uh staking module removes the stickiness from from staking and and makes the flow of assets much smoother and i think this would be really big in driving liquid staking adoption in in cosmos the second piece of tech that i think is quite critical is interchange accounts and this and basically in what interchange accounts let what interchange accounts lets quicksilver do is con is a quicksilver user can now control an account on another chain from the quicksilver chain so they can do all of the staking natively and and just operate through the quicksilver chain i think this is pretty important because

because the cosmos ecosystem is expanding a lot of new chains are coming out so any liquid staking solution liquids a liquid seeking solution cannot be built for every single chain that would that would simply be not feasible so we need a liquid staking solution which is largely chained agnostic and interchange accounts enables us to do just that now so far i've talked about capital efficiency i've talked about how liquid staking can boost the d5 ecosystem uh and all of that but staking also has a pretty a pretty important function other than other than all other other than security which is protocol governance and if there's one thing i've learned from cosmos twitter over the last three months is that people care about

protocol governance and and rightfully so so under the current model of liquid staking if there was a wide adoption of liquid staking or d5 there would be a governance problem in cosmos because because governance power would be inherited by by the user's validator in the best case we'd have validators calling all of the shots and in the worst case a few validators would call all of the shots in in multi-billion dollar protocols and obviously this is a less than ideal situation so now i've talked about what i see are some of the biggest problems that that are associated with staking and liquid staking

now i'll quickly go over the quicksilver solution and reason about how we try try abating some of these issues i think the quicksilver value value prop proposition rests in these three verticals it's capital efficiency decentralization and and governance capital efficiencies is a fairly straightforward one to answer quicksilver is at the heart of it or liquid staking protocol it allows users to mint q assets which are liquid representative of stake positions but the issue is not all stake positions are same each validator has a different risk profile each validator has a different commission rate so how do we achieve fungibility so our solution for fungibility is to socialize all the risks and rewards

so all risks and rewards on per asset on the quicksilver chain are socialized uh in a red in a redemption rate so there will be a redemption rate between the the native asset and queue asset and as taking rewards accrue theoretically the value of the q asset will keep increasing and this is how users can can get their staking rewards the second key piece of quicksilver is decentralization now we've made a very conscious design choice to use unrestricted validator sets now traditionally liquid staking protocols have used whitelisted validator sets which is a select group of validators now this made sense because these were trusted validators you could onboard them easily and and the idea was as the protocol grows the validator set would

would eventually expand now the problem with this especially in cosmos is that with something like the liquidity staking module a lot of stake could be onboarded in into a liquid staking protocol from day one so it's quite important that we go with an unrestricted validator set because the risk otherwise is that these few whitelist evaluators might might have might end up having a disproportionate amount of stake again constituting a security risk so the default position for quicksilver is that quicksilver will allow delegators to delegate to any validator that they could do so natively and the second thing we do to promote uh decentralization uh are these things we that we call performance uh these things

we call our participation rewards and participation rewards directly incentivize users for delegating to smaller which is decentralized and performant validators so what we sort of believe this will do is is and if quicksilver managed to capture substantial amount of stake we would balance out some of the validator inequities that exist in the cosmos ecosystem i also think this is a viable solution to the early bird validator problem which is validators get into a validator set of a new chain early on capture a bunch of bunch of stake and and remain to dominate so i think this these participation rewards would act as an economic incentive to balance things out and promote uh decentralization

the third and pretty big thing that i'm personally very excited about is the maintenance of governance rights i think i think governance rights are core to what makes cosmos change what they are there are application specific chains with with sovereign communities around it which which come alive through protocol governance and if liquid staking and or d5 takes off in a big way these governance rights will be lost uh for the users and quicksilver tries fixing this by having a governance by proxy module built on quicksilver so for every chain quicksilver on boards uh we mirror the governance proposal that happens on the native chain on the quicksilver chain and the q asset holders would be able to signal their intent for the proposal uh and this intent would then be

reflected on the native chain so this still gives users some semblance of participation and some say uh in in governance of of the cosmos ecosystem i think what's cool with this and and this is a solution we're working on is that especially with interchange queries what what we can also do is that if assets are held off chain we could still count them in in governance now just just to give an example if you have some atom you bring it over to the quick silver chain you bond it for some q atom cool and logically you go put it in the liquidity pool or somewhere else we're working on the solution which would which would essentially enable you to still participate in hub governance with your q asset in an osmosis pool or in some other d5 protocol and i think

that's that's pretty cool because you can't even do that with native assets right now um but obviously this is slightly complicated to build out interchain queries is is in a very early stage right now so and we will be publishing a full rundown of how we plan to do this pretty soon so the way i see it governance is a pretty pretty permanent thing pretty important thing for any liquid taking protocol and and i personally don't don't think quicksilver can become a liquid-staking hub without having strong solutions for for governance and and by extension being a governance hub for the cosmos ecosystem so i guess to quickly wrap up and conclude unlocking all of this capital is just the first step for quicksilver

the interesting thing would be to figure out what to do with all these assets if 40 billion dollars worth of assets enter the cosmos ecosystem there are a lot of things you could do with it now personally i'm excited about building some sort of index on top of quicksilver with all of these collateralized assets but that's just one thing and a lot of things could happen and that's partially why we've allocated 20 of our genesis supply to funding all of these cool projects that could be built with with q assets now i guess to sort of conclude the vision of quicksilver is essentially to have all of these assets enter the cosmos d5 ecosystem and supercharge it in in in some ways and while supercharging this d5 ecosystem we want

strong communities centered around user-based protocol governance a decentralized validator set and and the general wag me situation for everyone everyone in the ecosystem and i think that's about all i have thank you [Applause] okay thank you so you talked about um this kind of like socialization of rewards for that for delegating your liquid stake with smaller validators do you mean that you would be redistributing what would be earned like for example atom or is that additional rewards in like quick silver tokens that

go on top which are then yeah yeah so it's additional rewards in quick in quick silver tokens that we give out to users who choose smaller and more performant validators okay i think this question back there um i just have a quick question what would you say is the main difference between this and something like super fluid staking on osmosis yeah so that that's a pretty good question now superfluid staking and liquid staking are essentially two approaches to solve a similar problem and the problem being capital efficiency and so what superfluits taking does and the market that superfluids taking targets are liquidity providers so users who already provide liquidity on osmosis can now use

that capital uh and to stake and secure the chains and earn an extra yield on it but but the target that the market that liquids taking a liquid-staking solution like quicksilver targets are people who currently stake or users users who prefer to stake their assets uh assets first and i guess and another key difference of of a liquid-segment protocol would as of now would be that uh with a liquid token it it sort of gives users that freedom to explore different alternatives and and do different things out of it now you could you could do things like indexes for example like you could have a bunch of you could have one asset collateralized by a bunch of q assets which are representative tokens and then this

collateralized asset could then be integrated in in d5 ecosystems so these are sort of possibilities that open up open up with liquid staking but obviously super fluids taking has a much cleaner ux in some senses where you don't need to deal with this representative token so i think both are pretty good solutions for for for and i think both will uh end up doing pretty well in in the ecosystem okay thank you very much once again thank you [Applause] and now i would like to welcome to the stage henry the valence from penumbra bravo

[Applause] um well uh hello everyone um so my name is henry i'm the founder of penumbra labs who are incubating penumbra um and today i'm going to be talking to you about um some of the aspects of the state model that i think are kind of cool and interesting um so oh does this oh no there we go i'm just bad at the remote all right so to start off um the

uh the the useful question is sort of like okay what is penumbra um and i think a good way to conceptualize that is that it's an answer to this question of how do we provide useful functionality on a private ledger so for the people who have kind of self-selected for a privacy and cosmos event i think the value of like having a private chain is is pretty um clear at least to this audience um but it it's we have this kind of unfortunate situation in which on the one hand we have uh a lot of people who get a lot of use out of blockchains and then we also have some private blockchains and the venn diagram between those two

things you know as someone who works on privacy is like uncomfortably close to two circles right so how do we fix like how do we actually build something that is useful and our answer is penumbra so penumbra is uh sort of a combination of of three things first of all we have this private proof of stake l1 built on tendermint that acts as just like a private base layer for everything has a private staking system which has some interesting things that um we won't be getting into in this talk but you might want to check out later um and this l1 acts as a cross-chain shielded pool that lets you take any asset from any ibc compatible chain and

shield that asset and record it privately on this this zone why would you want to do that it's because we've also built or we you know by the time this launches we'll have built this private dex that allows people to do on-chain trading um in a in a private way and i think i think that's actually a really interesting application because trading is a use case where privacy doesn't just have this kind of abstract um sort of uh principled value right you know i believe in privacy um but that doesn't itself make a compelling product whereas with trading you have the a

situation in which uh privacy actually has this kind of concrete quantifiable near-term financial value that's giving people a positive reason to use this okay so maybe that sounds cool but there's this issue oh sorry um and this is the the diagram of basically how that fits together right so you've got this big beautiful ecosystem in cosmos at the moment um everything is transparent um and although there are uh you know not just penumbra but other projects that are trying to build private parts of this ecosystem it does seem pretty clear that we're not going to you know just tomorrow wake up and everything is going to be private

right so from anywhere in this ecosystem you should be able to do an ibc transfer into penumbra and when you do that transfer you shield your your assets whatever they might be and then inside of this shielded zone you can transact stake swap market make and all the time just have uh privacy by default um so this is all cool but okay like how do you actually build this right how you go from like what would be useful to how are we going to build the useful functionality and what i'm hoping to convince you of in this talk is that actually the biggest challenge to building a useful private system is not actually the kind

of zk cryptography or like what proof system you're using or whatever but it's the the fundamental state model um and and that this is really the big blocker to building useful private systems so as a bit of context right in a traditional blockchain you have essentially like global mutable state right you have here's the chain state uh we get some transactions uh i have a transaction i execute it now i have a new state now i'll have this other transaction execute that one new state and i just keep doing this in practice it would be kind of annoying to have to come to consensus on every single transaction separately right so you bundle them into blocks but

fundamentally it's a big ball of state and you you know change it um and on the other hand if you have a shielded blockchain you need to have a a different state model that's built on composable state this is actually kind of more similar to the original utxo model in bitcoin where instead of saying like oh well we have this like big ball of global state and a transaction can just like edit that and do whatever we have this collection of state fragments and these state fragments are immutable but they're also composable so when i have a transaction what's actually happening is my transaction is going to say okay we take these state

fragments we consume them together we're going to compose them into this new set of state fragments and then we'll append those into this like big collection of like little bits of state and why would you need this for building a shielded chain it's because this is what's going to let you make the whole thing private and the way that we're going to do that is we replace the actual state fragments themselves with just cryptographic commitments to those fragments and instead of having okay here's the transaction that you can like literally apply uh that transaction is gonna have just a proof of of correctness that you know these are commitments to the the new

state fragments that were made according to the rules and stuff so this is all really cool and awesome um and great and so we've you know solved the problem we have all these shielded blockchains right no um the unfortunate problem with this is that this only works when there's no shared state right and the the problem is that whoever is making this uh uh transaction is has to build this zero knowledge proof of a complete valid state transition and so there's two obstacles there the first is that whoever is making that proof has to have not like it's a proof of knowledge so they have to have knowledge of what the state transition is so

there's no way that i can interact with your private state right without knowing what that state is and also there's this kind of early binding property where the transaction has to be this totally sealed blob that completely defines here's what the state transition is you can go execute it and that's kind of a problem if you're ever trying to interact with some shared resource because how do you know right if you want to submit a swap right you can't know in advance like at the point that your transaction is processed exactly what clearing price you're going to get in order to be able to kind of pre-seal that into into a proof um and so if we return to our question

of like how do we build useful functionality um when we think about what kind of functionality people like to use uh all essentially all of it involves having some kind of public shared state and so we can reframe this question as like how do we allow private interaction with some public shared state um and and this the way that i think about this problem is that this is sort of the problem of shielding value flows okay so what do we mean by that um we have this kind of general situation where there's there's a blockchain it has some

state it's got um it's doing some stuff right and so there's value that's occupying different roles within that protocol that application or whatever and there's transactions that are happening and those transactions are causing value to flow between different parts of this system right um and the the challenge that we have is like how do we hide information about these individual transactions so it's not possible to see what each one specifically is doing while still revealing information about the kind of overall aggregate state of different parts of this system so as an example right you know how do you hide the amounts

of each uh person's delegation but still be able to see the kind of aggregate total voting power of all the different validators or how do you hide individual votes right i mean you definitely want to have private voting because otherwise people are just going to like airdrop bribes to people um but you still need to be able to like figure out what the governance outcome is um the motivating case actually for penumbra was like how do we hide individual trade amounts but still reveal the reserves of the amm um so there's a kind of cute paper um by taron and guillermo and alex about how

you know like if you have the amm before the trade and after the trade like it turns out you just like you know plug in a formula and figure out exactly what the trade amount it was um and then the last one that i think is kind of you know topical here is like how do you hide um bridge transfers well still revealing the the chain solvency so these are all actually kind of like different facets of the same basic problem and there's sort of two fundamental kind of classes of strategy for dealing this that go in opposite directions so the first one is trying to split up flows into little chunks and then the other thing you could do is you could batch flows

into bigger chunks what does that look like so in the first case right splitting you could imagine some user has some like amount um and they're just going to split that into some randomized sub amounts maybe they have some you know user agent that will do this for them and then they'll like spread those out into some like different transactions that each has like a little part and then later they'll try and like reassemble them and just like hope that whoever's looking at the chain doesn't know statistics um so that's like obviously kind of sub-optimal um but i would i would say that the one thing that is good about this is if you do end up in this kind of happy

world where there's like multiple private chains there is some sense in which this isn't necessarily the worst thing like if you tried to do this on a transparent chain you're going to like definitely lose right away but there's a kind of like worse is better thing in that disc is like something that some individual user can do on their own without requiring any kind of protocol changes or whatever but definitely not the thing that you want to build you know like your whole protocol on and so the the second kind of class and an alternative is uh batching flows so here instead of having

you know just one user let's say we have a bunch of these different users with different values and what they're going to do is they're going to encrypt all of these integer amounts using a primitive that that we've started calling flow encryption so you can think of this as basically like a sort of spicy additive homomorphic encryption um and the the reason to pick a different name for it is that once you start thinking about how do we integrate this into a blockchain you come up with this like long list of like all these extra properties that it has to have in order for it to actually like function as part of a system and at that point it's better to have um

you know distinct name for the concept um so we have some docs on this on our uh protocol spec but effectively the flow is that once you have these ciphertexts right they're all additively homomorphic so the chain can aggregate all of the encrypted values over some interval maybe that's over a block maybe that's over a full day maybe you know longer or shorter it depends on the application logic and the context um but then the validators can do threshold decryption to reveal only the batch total for that whole amount

and once they have that batch total they can use that to do some public on-chain computation and at that point okay it's like this is cool but how do we actually use this so if we return to this original problem that we had of how do we allow private interaction with public shared state this uh mechanism of of using flow encryption to do batching actually lets us uh do this in a way that is pretty cool but has some interesting consequences for the state model so we'll start off with some user who has some private input

and what they're going to do is create some transaction that does something you know what it is might depend on the the application but that transaction is going to have along with whatever else some encryption of of their input which is their contribution to some some part of the fl of some kind of flow you know whether that's their vote whether that's an input to a swap uh whatever and they make that transaction they submit it to the chain and the other side effect of that transaction is that they're going to get this kind of private state nft that'll it acts as basically like a receipt for participation so what happens when that transaction is actually processed and included in the

chain um it gets batched together with some other inputs from some other transactions maybe this you know will take some time if there's like a very long batch interval depending on the application but at some point um the validators will aggregate that together and then decrypt some batch total and at that point right they're going to do this public computation and the neat thing is that then you can have public outputs of that computation to get committed to the chain state and at that point the user who originally submitted their um the the this transaction can use their private uh state nft

to effectively just like mint some new private outputs and as part of their transition proof for their outputs they can use the results of this public computation so for instance if you wanted to do a shielded swap right your input is like you know what the amount that you're submitting uh to the as part of the trade and the public computation is like okay well we'll go and like resolve all these like batches of trades maybe we'll do arbitrage and consensus or some other you know sick hacks and then end up with all these clearing prices and now everybody can just like mint their new tokens and so this is a kind of really

interesting model because it's uh it's dealing with the problem of of having um interaction with shared state by basically explicitly segmenting uh the activity into distinct phases where someone is submitting part of a an entry into a batch and then later using the results of the batch computation to prepare their outputs and as a side effect um you end up with having the chain basically execute every piece of you know functionality whether that's um explicitly it kind of as a smart

contract or you know part of the consensus um but effectively every contract instead is just going to execute once per block so you can get some considerable efficiency savings and you end up getting a kind of neat property which is that you have no transaction ordering because everything is just batched together anyway so once a transaction is included in a block the ordering within that block has no effect on the results of the execution and there's also no visibility into what the transaction does

prior to it being processed and so if you think of you know what's going on with mev you're basically saying okay some like block proposer is going to get some like actionable information about the transaction and use that to you know discriminate against it but uh first of all it's not actionable because there's no transaction ordering and second there's no information because there's no transaction visibility and so the the result is that by design you have like effectively no med so yeah anyway that's the punch line um i think this is a kind of neat model for how to go forward and happy to have any questions [Applause]

um yeah very cool project add a question um so if there's no transaction ordering and everything is sort of batched together what kind of impact do you expect it to happen like pricing in in amms for the end user um yeah so uh there's definitely trade-offs with this approach um one is that um you are kind of uh well okay so i'll separate two two things first is like there's the concept of just like having this type of state model and then there's also what we're going to be doing with penumbra specifically so in general

with this class of state model you could still have that type of control so for instance you could say every input is going to set its own custom um uh you know slippage limit or something and as part of this like batch processing you would like sort them all by slippage limit and then you know the ones that were above would just not be processed um for and and so i don't think that there's any inherent kind of issue with this type of like just fully commit to batch processing of everything and not having transaction ordering um for penumbra specifically we want to

achieve a long-term privacy for individual trades right so unlike a system where it's like okay well we'll encrypt transactions until they're committed and then we'll disclose them right we want to have them be protected also after they're executed and so we basically in in the amm design we sort of pick two different trade-off points on privacy versus fine-grained control over trade execution and on the market taker side we prioritize privacy but on the market maker side we prioritize the execution control so

all of the amm positions are public but anonymous and so the idea is like okay if you if you would really like to have um like really exact control over your execution then you might want to use like a concentrated liquidity position as a limit order or alternatively if you're a uh want to like stay on the market taker side you could do something like um sharding your execution into like multiple uh sub transactions you spread out over multiple blocks so your um minimizing the sort of price

risk of you know ending up in a batch with some whale or something i have a question so thanks a lot for the talk um so in this in this particular model what happens if one of the individual transactions that were batched what happens is this transaction is actually invalid and does that open some room for denial of service attacks um so the the the really cool thing about uh building the chain around zk proofs is that you can guarantee that that isn't the case right because before you batch

the uh before before you take this some transaction and include it into the batch that transaction has to have a whole complete set of validity proofs that establish that it is an allowable state transition and so at the point that the chain is aggregating these contributions it can already be assured that they are definitely guaranteed to be correct um but that is actually a big issue and it's one of the the sort of finer points of like what is like this concept of flow encryption one of the additional properties that you end up needing that's beyond just like additively homomorphic threshold encryption is you

need to have a strong kind of end-to-end verifiability that like all of the cipher texts were well-formed and that all of the aggregation was done correctly and that none of the validators like you know substituted a different decryption and have this kind of end-to-end integrity of the value flow through the whole system cool thanks should i just throw it hey um thanks for talk i was talking to

lido at one point about um encrypted mem pools and they raised an interesting concern which was basically like opening up spam vectors so in this case uh you have no ordering within the block or like the segment that you're that you're anonymizing but one could potentially just flood the mempool with like micro transactions to like eat up the entire um segment uh and

and and then just have like one large trade in that um in that period so uh do you have like mitigations for for this kind of attack i mean their their thesis is like meb just like cannot be eliminated it can only be like pushed into other kind of domains um which i thought was like an interesting perspective um so i think it's kind of important to know that we we don't actually have like an encrypted mempool right it's that all of the transactions that are in the mempool uh don't reveal any information and so at that point you don't have a particular concern

about uh at least if i'm understanding the question correctly i don't think that you have a particular concern about uh denial of service attacks that is any different from just like being able to dos a chain by submitting a bunch of like spam transactions right like all of these transactions are going to have to pay a fee um and the the nice thing about um [Music] batching is that if somebody is like adding a bunch of extra transactions like that's just increasing your own privacy interesting so if you're using zero knowledge cruise

trolls are you actually then are you only charging a fee or do you have any sort of gas as well for this um so we're still kind of like refining exactly what the the cost model is going to be like but um uh there there are fees um and what we're probably going to end up doing is having a kind of like lightweight like uh pre so one thing i guess that is is a difference is that when you have a a shielded transaction with these sort of pre-finalized like sealed state updates um on the server side to validate that you're not having to do like execution

and so you can just like know exactly what the cost is uh up front and so we're probably going to end up with a fee model where you know if you add like if your transaction is bigger and it does more expensive stuff it has more proofs in it like your required fee will probably end up being higher to like account for that cost but a lot of the complex resource use problems that come from having this like on chain execution uh actually go away in a shielded model because the actual state transitions are happening off chain and what we're left with is um and on the so just uh to rewind to this uh

kind of batch processing diagram another thing that's very cool about only executing each piece of functionality once per block is that you get to amortize the cost of that execution over every single transaction and so depending on which way you go right either that could be much cheaper or you could say for the same amount of cost we could do like much more like computationally intensive uh processing and do cooler things uh as part of the app logic thank you very much thank you henry all right

[Applause] now we're going to take a short break 20 minutes so see you back 15 40. so hello

hello uh we are starting back in two minutes uh with the talk from sergey from axler so um if you want to take a seat and let's get ready [Music]

hey everyone let's welcome sergey gorbanov from axler for his talk all right [Applause] hey everyone how's it going awesome grab your seats if you want if not then that's fine so great to be here and thanks so much for inviting me to talk about axler so first time in amsterdam and i was taking a taxi to the to the hotel and so i learned the most important thing about amsterdam and apparently is that you should not go to a coffee shop because they put interesting things in your coffee there and you should only

rely on starbucks following that the driver told me that he was born in amsterdam raised in amsterdam it's the happiest place in the world and he would never leave so now we know why awesome so hope you had some good coffee let's get going um super excited to tell you about axler if you don't know and the one liner if you need to remember think about secure cross-chain communication on that note um let me quickly you know mention or introduce the team if you're not familiar um so we have a pretty uh amazing team super proud of a lot of the folks that are working with us the team comes with deep backgrounds and

cryptography distributed systems kind of consensus we designed and worked on many protocols over the years from you know outground to kind of standardization of crypto protocols like bls kind of hyperledger optimizations nuclear fusion and things like that so pretty deep uh team in the technology space and uh super proud to to work with all the guys all right um i think on that note very briefly um i think this is all familiar to many of you but we know that the world has gone multi-chain over the last few years right i think you know if you look at the evolution of the ecosystem it all began with a couple

of foundational projects bitcoin ethereum early applications were built around those of course um and then we quickly realized that on their own those platforms could not scale right so over the years we saw an array of other platforms entering the market many of them optimize for unique technical capabilities or go after specific markets or use cases and i would say only over the last year or so the applications now embracing the multi-chain ecosystem and thinking about how do you leverage and build on top of these newer platforms and how do you leverage their technical capabilities um or markets that they are targeting so lots of applications are going cross chain these years

now the unfortunate side of the side effect of all this is that the space continues to fragment and it continued to fragment over the last year or so and one of the reasons is um can a lot of ad hoc solutions in particular bridging technologies have been rolled out uh to solve some of the interoperability issues that we're seeing right um basically i think the the way to characterize a lot of the bridging tech aids mostly been centralized except for you know a couple of exceptions and so you see a lot of the hacks um over the years where you know a few nodes get corrupted um or just bad and poor uh poor security models uh the second uh problem with a lot of the technologies that they have limited uh what i call pairwise of one

to one connectivity right so again like the stacks have been designed and everything has been built to connect you know a and b which which is great but you know we're in a in a world in an ecosystem where we want to be able to connect you know many to many uh different ecosystems and continue to scale you know and support millions of chains and you have to kind of design the stack from the right approach so whenever you know i use one of the existing bridges or kind of think about the space in general you kind of look at this picture right and i don't know about you but i'm just hoping that i don't end up like on the on the bridge on the left right um so that's the state of the art awesome so what are developers actually want

sorry the developers want platforms not stylus right so um as a developer you want to pick a platform where you can build the best application for your user experience while still being able to leverage and compose and interact with all other ecosystems okay and so that's what actual stack allows you to do is as a developer of your application on asset you can make the best decision for yourself where to go without having to think about you know losing liquidity or losing composability and so the axillary stack enables you to perform secure cross-chain messaging you know asset transfer contract calls and anything else you can think about the other big point that i want to

kind of mention is that at the very end of it i really don't think the users care about bridging technology or interoperability or too much what chain they're on okay as a user really what you have to do is you you know you have an asset you see an application you just go ahead and use it and so we're building the the stack with the user simplicity in mind to think about what are the right layers that you have to provide and build in order to enable simple one-click interactions across the ecosystem right as a user i should be able to go and use the application and i have to put trust in the application issuer and developer to build on the best and secure platform their application i have to put you know

a trust that they're using the right interoperability or bridging technologies but as a user you know all these things uh there's no way you can you can think about those things and so that decision has to be kind of uh relied on the developers to do this simplicity is one of the core things that we need to get to in order to go to the next level of adoption for the blockchain ecosystem and today it's it's just horrible and painful all right awesome so on a high level let me introduce you kind of to the axler stack there are a couple of layers but let's start from kind of the top going back to the premise that we want to start with we want to enable

applications to be built anywhere they want to be built right so you can go and build on ethereum on avalanche and cosmos on polka dot and we'll help you communicate with all other ecosystems through a universal set of apis and sdks that you can interact with you can think of it as an application you can call a message to a specific you know router or gateway which is a smart contract on the chain from there underneath it there is the axler sort of transport layer and the gateway protocol that would serve the purpose of you know finalizing messages routing them executing them kind of delivering where they need to go and then returning the result back to

the application right so underneath all of this the actual network itself is a decentralized proof-of-stake network so it's based on a cosmos sdk so you can you know anybody can join run as a validator participate in the consensus and have full security of proof-of-stake model back in the uh the transport layer itself all right so what are kind of some of the key ingredients of the axon network um there are a couple of big uh components and i want to kind of emphasize that everything has been designed with the goal in mind to really be able to connect millions of chains over the years right and so the

components are all reusable and they're all programmable so at the very core of it there's a tendermint consensus which um you know all the functionality has been coded around it and so it serves us really well purpose in order to agree on the state of cross chain messages that we're processing um there is a layer of kind of finality gadgets which allows you to connect an arbitrary blockchain with as easy uh with few instructions essentially or a few commands on the network right so those finality gadgets you can think of it they can deal with uh probabilistic chains right they can deal with chains with instant finality um you just need to specify you know confirmation heights or basic parameters and then you can onboard the chain

there is a layer of kind of multi-party cryptography that's involved in it everything is pluggable you can replace the cryptography so you can use anything from multi-cigs like threshold signatures bls signatures you know you can use zero knowledge if you want and so that serves as a building block and a component as well through the network and on top of it there is a layer of programmability that allows anybody to go and kind of use all these building blocks run commands on the network in order to onboard a new ecosystem as easy as possible right so this is kind of at the core transport layer all these components can be merged together and composed uh to make interoperability scale all right awesome so yeah in terms of

the network itself we actually started to roll it out uh you know a couple of months ago it's still in the early i would say phases of the rollout but it's already on board you know like a dozen of chains or so um everything from cosmos based chains that can interact with ibc to various evm chains uh you know ethereum avalanche phantom moon beam um and so on and so forth and and like i said because the way the network is designed and the components is designed it's pretty easy to actually keep on onboarding new chains and uh keep on adding more connections so kind of check out axle or scan dot io it has some some interesting graphics and uh kind of statistics about uh what we have processed today but it's still kind of early days of the rollout all right so i'll mention a couple

different functions you know on the on the network layer and one uh what i call is a universal asset transfer so the basic idea is the following whenever you compose in different ecosystems some of them speak very different languages today right so you have cosmos that speaks you know ibc ibc is not extended to other ecosystems yet so you potentially have to speak either a different message format or you have to translate one message into the other format right and so this is at least for now what we have done is kind of enable functionality to perform uh transfers you know from many to many different ecosystems right so from many uh cosmos chains to many evm chains and and vice versa and the uh the basic kind of core

premise of all this is a as more chains are added to the network you get very strong compounding and networking effects right so you're not con you're not fragmenting liquidity you're not fragmenting connections every new connection that added automatically gets to benefit from all other previously interconnected ecosystems right so it's not a pairwise connectivity in that model and underneath it you have this strong kind of translation properties where packets from let's say ibc can be translated into packets that that are readable by you know evm contracts and vice versa right so uh and because the translation happens in the network layer it's all very optimized and it's all very cheap and it's all very effective and efficient so you can program these things as well

um you can um so on the gateways that i mentioned earlier you can actually call the gateway contracts in order to send tokens or one of the features that we have rolled out which you know seems to be very interesting for the community is to be able to get a deposit address where you can send a regular transaction to send your funds from one chain to another right so think about it this way in a lot of the bridging technology you have to use things like metamask or smart wallets in order to actually use them right uh that limits your user base you know to metamask or smart wallets which is you know 20 to 30 million um you know half of them from a ban and smart chain if you want to go beyond that and allow

your assets to be transferred through centralized exchanges right through dumb wallets and get like to hundreds of millions of users you can't require people to have metamask right like that's a very limited factor so what axel can do is you can call an api to get what we call as a deposit address and the deposit address is a function of from where you want to go to where you want to end up and what is the the destination address where you want to receive your funds right and this address is a regular address that can be uh computed to you to which a user can send funds from any wallet right from a centralized exchange from a dome exchange it's a regular transaction that's executed and the way the reason that it's enough is because of the

actual network layer once you create this deposit address you create sort of a path from a source to a destination right so once that path is created users can send an arbitrary transaction um you'd have to decode like arbitrary you know complicated payloads and smart contracts and so on and so forth so super excited about that feature gives you you know access to millions or hundreds of millions of users that were not previously available for bridging technologies in general awesome so the second you know big component of axler which we're rolling out now is what we'll call this general message passing right so the basic idea is that okay tokens are great but they're in some sense what they allow you to do is they allow you to move asset to the computation right you have programs that

are deployed on certain smart contracts you move in assets there to do things with general message passing you can go way beyond that and what i call what i can think of is you can start thinking about paradigms where computations can move to the assets right and state can move slowly across different blockchains so as opposed to having to move the tokens you can have functionality where the tokens or the assets are residing on a chain a they're interacted through very smart contracts and only state about those contracts or calls is then communicated to synchronize with other applications or other application logic that could could uh could sit on different chains so this is on the high level how this

would work um high level diagram if you have a user you know a user would interact with what we call as a source chain application contract so let's say you know you're going from ethereum to avalanche you would have a contract on the source chain the user can send an arbitrary command to the contract that contract can do anything you know in a touring complete world that you can think of right you can swap tokens you can uh you know lock them in any shape and form when the message needs to be relayed to other network it uh the the application layer logic can call it to the axler gateway the actual gateway is simply you can think of it as a input and output

you know buffer or a queue to which you can read and write messages underneath all of this there is the actual decentralized proof of stake network that will confirm the messages help you process them relay them and put them on the destination gateways right on destination gateway from there you can call any other contract with any other payload whether or not you transfer in tokens or you just synchronizing state across of your application so you can do all of this and then the user can get their result and uh you know a different wallet or the same wallet or depending on how you execute the application so super excited about this uh you know i think kind of in the cosmos i think similar you know uh trends so think about it is through kind of interchange

accounts right that allow you to send transactions from uh one chain to another this is kind of going beyond that and going and interacting with evm chains and we're thinking about ways that actually the two can compose with one another which i think will be you know super super exciting um yeah so uh high level let's go beyond tokens let's enable touring completeness right for cross chain communication and that's what this allows us to do all right so yeah you can think about building arbitrary applications from you know super apps what i call which is i think super exciting uh category of projects we're starting to see in the crypto space where things like wallets are allowing users to do more and more

right um you know um purchasing viewing nfts kind of a trade-in going from one chain to another and all of that is going to be enabled through you know interoperability stacks and cross-chain communication um and i think this is definitely going to be an exciting category um that we're going to see in the coming years beyond that you can use your imagination to kind of think what to do with this general message passing functionality everything from nft transfers you know crosschain automated market makers gaming and so on and so forth and we're seeing some some early uh use cases and exciting stuff for for instance like a first cross chain nft marketplace that's been built by our community that allows people to

that have tokens on different chains to kind of purchase nfts that may be hosted somewhere else across the ecosystem right so kind of super super exciting use cases all right so i think i'll end it here there's a quick talk so if you want to follow us you know check out docs sign up for discord we're always there to answer any questions and i'll be hanging around and you know i can probably i don't know how much time we have but i can probably take a couple questions now at one minute all right one minute is good for 10 questions let's go quickly anybody all right

awesome well thanks everyone we'll see you around thank you sergey all right so next up we have another panel i'm going to invite four panelists this time around i hope we have enough mics we will have to share one mic whoever's on whichever couch here okay [Laughter]

all right so the this panel is the title is bridging privacy into cosmos um when putting together this event we felt like a lot of what we were focusing on was cosmos with a sprinkle of privacy uh there is a lot happening in privacy and so with this panel what we're actually going to be doing is talking to four privacy focused projects two of which are connected to the cosmos ecosystem already one of which which is deeply in it but two which are less connected and i thought this was actually a cool moment for the cosmos community to also get to know what's happening in privacy so let's start with the project that you did already hear about today

uh penumbra do you want to just say a little bit about yourself and the project um all right uh my name is henry uh i guess uh so i gave a little bit of a a brief overview of of what we're building in the the talk that i did but um uh the punch line i guess is that we're trying to build up a private decks and the thought process there is that um [Music] uh trading is a really interesting use case for bootstrapping privacy because it's a case where people have

a financial incentive to not disclose their information and so you could potentially change uh this kind of existing dynamic where a lot of the time when people build private systems it ends up being kind of like okay here's our private x right and it does x and it's private and it's like kind of worse at doing x but like it's private and you should like privacy and like you know everybody thinks that privacy is good so you should use our product and like unfortunately i think that that doesn't really work as a as a as a product and the hope is that

with trading it's a it's a case where privacy thought of as kind of control over the disclosure of information has this very concrete kind of um uh financial incentive and maybe we can harness people's like kind of naked self-interest to bootstrap this like private infrastructure awesome like can we actually be better at doing x because it is private rather than you know being having some kind of trade-offs that's awesome adrian maybe also mention your connection to the cosmos world yeah hi i'm adrian um

yeah my connection to cosmos world is i joined as the third corps protocol engineer on cosmos in like 2017 and sort of built multiple companies out of the space including a validator and yeah so what is our noma a noma is a suite of protocols and mechanisms for privacy preserving human coordination in a very self-sovereign fashion when you think of human coordination right that can mean very simple things such as being able to express access control on your wallet but it can also mean very complex things such as on an ephemeral level wanting to buy starbucks coffee and offsetting the

carbon cost at the same time on a very permanent level being able to define that whenever you interact with the financial system you always want to make sure that you're buying fair trade things and anoma allows all of these things to happen in a very programmable and uh intuitive fashion and i think maybe one of the main things here is that well one thing we have to realize is that we need way more information density in how we interact with uh the the world right when you think of something like an election or of the financial system it's very information reductive step

where you sort of try to break down things into single points that you can coordinate around whether this is a buying choice in an election or a single price for a cup of coffee but real life is way more complex than this and we should allow people to be able to express these like very complex preferences that they may have in relation to their environment where when i buy coffee i not only care about the price point of the coffee i also care about whether it was sustainably sourced whether the co2 cost is offset um and yeah this is really the idea with anoma to allow very high information density um to be automatically computed over and so for people to permanently express their

preferences in relation to the world in order to automate a bunch of these things so that i can say i always want to buy neutral energy and i have to do this once and then for the next 10 years it's just automatically done but i can also update these kind of preferences yeah and of course all everything in privacy preserving mana because privately privacy is fundamentally important because a bunch of things start breaking if we don't have privacy got it emray sure hi everyone i'm emory um with o1 labs uh o1 labs is one of the main contributors of mina protocol mina protocol is building a private and secure way to access web3 it started as a

you know using zk primitives as a as a project that has full node security with just a few kilobytes of data um so that has been live on mainnet for over a year now um as as a new blockchain and now in the coming months we're looking to enable easy zk programmability where anyone can deploy using super easy sdk and typescript zk apps on the mina network and be able to share their data in a private manner where they make attestations instead of sharing all of their data onto smart contracts on the blockchain and when you combine that you know super small data full node security with this that enables mina to become kind of this user private user data

layer to any other layer one ecosystem whether that's you know cosmos or anywhere else so that's what we're working on and maybe one thing about mina is it was one of the first if not the first to kind of showcase this type of technique called recursion in zika i know it existed before and had been written up in academic papers but as far as i know it was at least the big first big scale use of that technique which is now being used by lots of zk projects all right alex uh yeah hi everyone first of all let me just say it's a pleasure to be here thank you for inviting me it's amazing to see uh you know i've been in the space for about five years now it's amazing to see the cosmos ecosystem just grow in the way that it has so um again

it's a real pleasure to be here and be part of this event um i'm alex i'm the ceo of elio um alio is a platform for private applications um similar to you know probably some some of the things that these guys have described you know this is uh things that potentially benefit from privacy and i really love the way that henry framed it is like you can't just you know you can ba you can pound the table all day and say you should care about privacy but fundamentally i think you know all of us you know should focus on how privacy makes something fundamentally better or enable something that that hasn't before so anyway at alia what we try and do is enable take the z cache basically paradigm um and extend it to more general programmability and i think maybe the other different thing about elo that

i'll mention is we have a consensus algorithm that specifically tries to incentivize uh proof generation and with the hopes of making it you know more economical more efficient over time and uh and and to therefore bootstrap this as a paradigm uh into the ecosystem more broadly and help integrate these private applications across web3 so when it comes to privacy projects i feel like there are different kind of levels of how private something is you have the model that zcash sort of pioneered which is to have a shielded or cloaked as i'm going to keep trying to use a portion and a transparent portion so part of the blockchain you can

actually map like any other and part of it is hidden and i wondered for each of these projects like how pro like what parts are private and which parts are actually public this might be something interesting for people to understand so maybe we'll go this way yeah reverse yeah by the way is cloaked the new term i'm trying i like i kind of like it actually it's like star trek star trek yeah i'm into it cloaked and de-cloaked um yeah i'm into it uh anyway so from so i guess like maybe just as a general answer to the question um you know there's there's a couple different dimensions of privacy that you might care about as a user right so one is you have an identity that you're using on chain which could be your

account or something and maybe you you would like the fact that you're right you know you would like that identity to you know be obfuscated in some interaction right so you don't want the you know one of the interacting parties or an observer to know who you are so that's kind of one dimension uh and then the other is like what is the what is the interaction like what is the program basically being run and maybe you would want to obfuscate that program like for example if you're if you're participating in a dark pool or something like that um you know there's potentially reasons for example trading to you know want to hide the fact that you're participating in a dark pool because if you're trading in a large enough amount or you're a specific player say you're a large venture fund exiting a position obviously just that

knowledge alone that's that you know a program is being accessed might trigger actions um that you don't want to necessarily you know trigger so i think those are those are um you know and then of course i guess the last thing and since we're talking about web3 is like the transaction amounts right so sometimes like you know for example tornado is like you know it's the way it works is kind of more as like a mixer so you're hot you're kind of mixing the amounts that are going in so maybe the amount or the specific data um or state at which you're which you're accessing you might want to hide too so so yeah i guess um i'll leave it there in in the desire to have it general do you want to talk more about alias specifically no i well so i guess the question here is are

there parts of ayla that are transparent yeah so the model that i like and that we try and strive for at alio is is private by default so you can actually hide all of these various aspects and you know for those of you who are curious alio kind of came out of this academic work which is sexy stands short for zero knowledge execution and the whole goal of that was to try and extend zcash effectively and enable both um you know privacy of the individuals interacting as well as the program being accessed um you know i think one thing that often gets overlooked in conversations about privacy and private applications is um it's sometimes very convenient to have public state which is accessed and so you know i think this is this is sort of i think it has to be left up to the

application developer i'm like okay what am i what am i trying to do here what parts do i want to let the user choose whether or not they want to let disclose what parts of the program state do i want to make public um and the bottom line is i think you know protocols in my view should strive to make that up to the developer of the application so you want to hide everything you want to hide some stuff maybe there's a select disclosure if you think about it just the last thing is if you think about that's exactly how our financial system works already it's like if i send em ray a bank wire it's not like i know his account balance right like i can tell him or i can tell the irs you know and selectively disclose what i choose to but i by default it's

effectively private i think this default by default private but by exception public is the paradigm which will i think kind of have you let you have the best of both worlds also i don't mean to put i'm not trying to compare you on levels of privacy i think there are use cases where more privacy is needed and there's use cases where actually it might be good to have either a selective disclosure or even a transparent anoma how what like what parts are private how does it work um you can look at this from a couple of perspectives right you can look at this what is private on the protocol side what is private on user sites i think starting from the user privacy by default really really matters because especially if you have shared privacy sets because privacy is a public

good as in even like i benefit from a bunch of other people being private because it enhances my privacy in the system actually so we want to incentivize people to uh by default always be private because it like it sort of it increases the privacy set that we can all rely upon this is also why it's like not a great model that we want to like have separate privacy sets like when you think on for example like tornado cache you have privacy sets between the different denominations and the different assets and like that heavily starts segmenting the privacy guarantees that you're getting so privacy by default is i think very important but then it also comes down to so like users can effectively choose how much privacy they want they can be fully private they can

decide to be fully transparent this is in the end up to the user because for some things you need to leak some data right if you uh so if you're pure execution environment that's not as important because you don't generally need to coordinate with other parties yeah but for example if you're in this model where i have like a cryptokitty and i want to sell it to someone i have some bitcoin um and i want to buy concert tickets in barcelona for them this kind of selective disclosure where you can discover countless parties with whom to work on achieving a settlement for mutual benefit you need some amount of disclosure in order to discover counterparties if you say everything is private all the time it's very very hard to have

to discover counterparties around the world unless you say well we have like the protocol is always the counterparty uh which is sort of the kind of amm model don't you also need it some somewhat for like oracles for like price right so a bunch of other things in these systems also need to be public and i would argue that like proof of stake for example it's still a fairly modern thing there's an argument to me that this should be public because you want to understand what the security model of your chain is same for bridges most likely bridges are still very hacky and it's like way easier to recover from faults if you have private state a public state instead of private state so i think we can think on privacy on the user side and there we want to give people the ability to be as private as

they want to be but also to be as transparent as they want to because we can't really estimate the use cases that developers and end users have in mind so we should make it very cheap for them to be private but not force it onto them and then on the protocol side as this tech matures sure we can be more and more private but sort of at certain linchpins i think it makes sense to be public um yeah cool and meena yeah i'd say mina has a similar approach where uh we're not super opinionated about privacy necessarily in fact mina did not start up as a privacy project it started more of as a project that kind of breaks the scalability trilemma by having this you know fixed size tiny node then you can you know scale it as much as you want but what we're seeing nowadays is um and

as well as having the best you know zero knowledge uh primitives and what i call the our aim is to be the most efficient zk state leader in web three um and what we're seeing now is that you know the best use cases there are about uh making for mena at least making user data private um so instead of you know if i want to use a defy app or an nfd app or a dao or whatever instead of having to make every action that i take public or every data that i need to provide public instead i provide attestations whether it's about my you know personal financial information or my kyc or my dow voting rights or what i voted right where you know people then you know can make out the stations instead of sharing

the data um and then also it's what we're discovering it's it's fairly easy to build um layer zka roll up type layer twos on top of mina so in fact like some a handful of developers are using the alpha of our sdk and you know one of them has already started building like a basically a shielded transaction layer on top of mina for native mina tokens as well as third-party tokens so what i would how i would position it is like if you have super easy to use powerful zk primitives then all this stuff becomes much more easy to build as an application ecosystem and that's what we want to enable um at least for the amine ecosystem cool

um so yeah i think there's like a little bit of a contrast in that um like penumbra is like quite opinionated about privacy um and uh specifically like picks like a very very narrow and like um focused use case and if we rewind all the way back to the the way that you introduce the panel there's i think an interesting perspective there um so looking at zcash there's uh the the transparent part that was forked from bitcoin and then there's the shielded park and if you go back and think about the history right that project started um

at a time when you know a zk chain had never been built and also at the same time the rest of the blockchain ecosystem was much much less secure or sorry [Laughter] that you didn't have like you know ibc didn't exist like none people were just like talking about like oh what if we could do like cross chain atomic swaps wouldn't that be cool um and i think you had much more of a sense in which like each chain had to be its own universe and i think what's interesting about the context that we have today is that the development of

cross-chain mechanisms allows individual chains to have like some specialization for a particular use case and so for instance for penumbra right like having transparent transactions is not something that we're gonna do but that's not because we believe that no one should ever do this ever it's because like you know if you want to go and do like a non-private smart contract you should like do an ibc transfer over to juno where there's like people that that's their whole thing right and our whole thing is like this like private decks thing um and and so i think that's like kind of uh

i think a little bit of a different approach than trying to build a more general platform [Music] i don't think that that's sort of i i don't mean that it's like a i don't think there's any like value judgment in there it's just like a different kind of strategy um and and to some extent it's also because like you know like elio exists right so like there's no point in us trying to build like this like generic uh like zk smart contract system because this is already being worked on right yeah and i i think i love how you frame that and i personally believe that the future is going to be application driven rather than protocol

driven i mean all four of us up here arguably are kind of building protocols i mean henry you're obviously working on the most specific version of a protocol but you know i think the future is naturally going to go to a place where people have a demand for a product the protocol underneath it will naturally be built to serve the product that people want right and i think in even an alia although we're building a more general platform and i you know i don't think that alio is the right choice for every web 3 application and you know one of the things that if different hs differentiates us from example for for example ethereum is we don't have a model of an on-chain vm which in some ways is limiting in some ways it's very powerful but in some ways it's limiting so i think it really depends on what

you're doing similar to privacy like you said for some things like nfts and some for some applications of an ft's privacy may be important but for just like sim you know uh you know showing off whatever nft you have i mean kind of privacy is the opposite of the point right you want people to know that this nft is yours and you want to show it off you know and maybe that's a bad example but i think i yeah i think i think everywhere and you know i would encourage all of you who are at this event and you know hopefully at future events and um going forward i think about just these trade-offs being made at a lower level and how those percolate up to potential applications that you could or could not build because i think there's room there's there's a massive massive space

to experiment and there's a huge number of different ways these protocols and products could look uh in this in this paradigm so yeah 100 agree actually on this product perspective i mean this is something i'd be doing at the protocol level um where we are building a sort of the first chain in the enormous ecosystem is going to be called armada to just focus on a very narrow use case which is multi-acid privacy to for any connected asset where it's just like you want to have a single very large shielded pool that has eth that has dye that has atoms that can have effectively anything that's bridgeable um at the moment viabc and they all just live in the single shielder pool you can do proofs on in the web browser in like

three seconds um and you can even move an nft into this this is a cool thing like for nfts you currently don't have any good privacy solutions but if you have a multi-asset chiller pool you can have an nft in the same chill pool and it benefits and it sort of inherits the privacy guarantees you get from all the other fungible assets because an external observer it's indistinguishable whether you move your nft or some die if i can add one last thing wrap everything up not to be the odd one out um i would say like and this is a bit preaching to the choir giving this is the cosmos ecosystem but like there's no doubt it's a multi-chain world going forward um and like every chain inevitably whether it designs itself to be or whether it says

oh i'm just the most general smart contract platform ever even in that ladder case they're all going to start like naturally finding their optimal you know frontier if you will like i don't know maybe ethereum just ends up being you know the asset settlement platform going forward right but it's not going to be the the privacy layer right um so i i think we just have to accept that you know it's a it's a multi-chain world at this point it actually comes with a lot of benefits to end users as well like if you think on building privacy tech on ethereum you inherit a bunch of transparent stuff that ultimately becomes a massive privacy leak for you but whereas if you sort of look at the entire stack in an integrated fashion you can very quickly build very good products that like

deliver specific use cases for people that are hard to build in sort of a fully generalized manner sort of speaking of that connection point we did a panel earlier today where we talked about bridging we mentioned this idea of like what happens with a privacy zone or privacy chain once it has to bridge away and in i guess like currently in all cases the minute you take that leap outside of your l1 you will inevitably be revealing something but is there is like have you been thinking about that as like are are you thinking of creating extensions of what you're doing like

extending the privacy space into those bridges i mean at this point the ideal thing would be to have cross-chain shielder pools actually let's call them shielded soups because they're not cloaked okay nobody's picking up chain cloak soups all right um no but so i mean but this is trying to get out here this is still like early research right to get to cross chain pools or cross chain chiller pools um i think for now honestly if you start braking um because you break linkability quite a bit so if you go into private ecosystem and then you go out of it um you can go out to complete new addresses there they are not linkable to your old addresses that used to go into the private

ecosystem so to me personally i think there's not a lot of need to build super private bridges at the moment because as long as like you're just sort of taking public routes between private things it doesn't really matter the routes that you're taking up private i mean eventually leaks are metadata but this is sort of a problem we can worry about maybe in like four years from now okay not right now yeah we have to i mean we just have to consider this right on the privacy side there is the amount of privacy preserving tech out there right now is so limited like it's tiny and i think we should really focus on making private applications of reality before you sort of start thinking like how does this need to look like in the perfect

world right because the kind of the default case right is that like a like a layer one like a leo for example could fun if it was connected to some other ecosystems could kind of be effectively a mixer right so you could go from let's say sawana to alio and then to ethereum or something you could it basically functions the same as a mixer um you know and and these bridges oftentimes the focus is just about passing those messages and in some ways like you need that information to be public for security reasons or just for functional reasons but i think it's an interesting unexplored design space um you know because again they're we're talking all of us are kind of more privacy or zk focused projects but you know if we're talking about bridges between

say solana and ethereum or something i think it is kind of an unexplored design space to kind of figure out you know could you without kind of having an intermediate layer one protocol be a mixer like is there a way to kind of make that make that private yeah i'm not aware of anybody who's kind of looking at that but it's interesting it's hard and just to sort of mention something it was in the oh do you want to say something before um just as a like a riff on that i think that um i i don't have like a lot of optimism that that type of design would work out and the reason is precisely because if you have a private l1 you can use it as a private bridge i think having um

i i think that the development of a private l1 that can talk to transparent chains is going to basically obsolete the development of any kind of private bridging between transparent chains because why would you do that when you can just like you know go through any of the private zones something that came up in the previous panel as well was this idea that when we think about privacy and bridges we have i mean i have had a tendency to think of it as shoot like cloaked wait i got to keep my own term going uh hidden tokens basically it's always token transfer token transfer but as sergey mentioned

what if it's messages that actually have actions on those destination chains that are private then it's not so much like the i mean i don't know if that also reveals as much as if you were doing token transfers in and out i don't know if you've thought about that i guess i think that part of the reason that people are are focused on token transfers is that it's like a simple thing that people haven't done yet right like in order to do um like private messaging between applications like you you first have to like have the private applications right and we don't so i think that part of the

the kind of i i don't know that that's really about some kind of like narrow-mindedness or that people aren't imagining this thing but just that it's like there's a big gap between imagining the like glorious zk future in which everything is private and like you know maybe we could build like one like private thing that actually clearly has product market fit okay first yeah i wanted to add there um i mean to henry's point like this is my pet peeve it's also like tokens is the only thing that exists in web3 at scale today like there's like it's all speculation right um and to build these you know these applications that are about so much more than that

you do need some sort of privacy at the state update mechanism right because um like for example in how how mina approaches this is um and you know mina is by design you know is basically any chain can run a full node amino within itself um but what the other chain is hearing from mina is just various state updates into a specific you know application that's running on mina so um how that state update is achieved that's where the magic of zero knowledge happens where you know like the the the proofs get posted on chain and they trigger the state update as opposed to logic being running the logic running on chain and the chain determining um in a transparent way how the state update happens so i i think there's this

ghost also kind of to the off chain versus on chain you know distinction where the more you can do some things beyond the token world off-chain the more privacy you get to preserve there's also other benefits you know such as operational efficiency but i think that's a paradigm shift that we all need to start getting into as an ecosystem i think henry has a response um i'm not sure that i agree that it is always better to move things off chain and but but i think that there's actually um there's a kind of an interesting way to look at sort of like differences between

projects and like i don't want to sort of well i'll just sort of say things and then if i say things that are wrong then i can just be immediately corrected but um if you think about for instance the the way that uh zexi which elio is built on um the model is is almost like every transaction is like a micro roll up right like there's some smart contract state and the way that the execution happens is that someone is going to execute the contract and then produce a proof of the execution and then submit that to the chain and it's like you know bundled up but but effectively it's like a a rollup but at kind of this like arbitrarily small

scale um and the the thing that's really cool about that is that right all the actual application data doesn't have to be on chain but the problem that it doesn't really solve is like who is actually executing the smart contract and so there's kind of two possible alternate approaches to that one which uh we're working on is like okay well we'll zoom in to a very specific type of application and see how we can do some kind of like additive aggregation of input values and then another is with enoma part of the the this was like a really cool thing that like clicked for

me recently so hopefully it's correct um like the reason that there's like it makes sense to have a bartering system that's built into this system is that it's like you're kind of bartering like different people's like potential state updates that is actually a very good way to describe this yes yeah i think that's a i really love what you said and by the way for everybody who ever wants to get a uh someone building a privacy protocol in knots just ask them to whiteboard you in a simple in five minutes how you would build private uniswap and you will see people do many backflips because either typically i mean it's complicated right because as henry's pointing out and let's just take this xe model right

you're taking this off chain you're doing an on-chain you know uh computation who who is running that computation and zexi it's the user right but uniswap is kind of built on this idea of a smart contract which requires an on-chain vm right and so you know you have is but on the at the same token the on-chain vm model typically is the account model and the account model is very hard to make private right so you all you kind of end up in this in this weird space so anyway it's a fascinating question to ask people if for any of you in the audience the last thing i'll say though quickly is i think there's a world and we haven't touched on yet is i wonder if there's a world in which you can hybridize these two models right one thing we're looking at at alio

potentially is to have some concept of like a hybrid off chain and on chain computation where you can imagine a user basically kind of almost like meta transactions where you construct a transaction and then you forward it to you know some approver or some other entity that basically sequences and or finalizes the transaction and maybe this maybe this paradigm enables you to hide the things that you care about hiding but it still gives you this advantage of having concurrency and composability which i think are the main advantages of an on-chain vm model um to maybe clarify this a little bit it's technically not the vr it's like so the reason why you can't build uniform privately is because you've unchecked like someone needs to hold the state uh right like and in like unisop

on ethereum the contract holds that state um because the and the reason why you can't do it privately is because the person that constructs the proof is the person interacts with a contract and that person necessarily needs to hold the shared state in order to be able to construct the proof i think long term there's actually some interesting research we can be doing and i think some of us are already doing around fully homomorphic encryption and how we can have shared private state um sort of for longer periods of times and you can even think more like i'm thinking now between the message passing right you want to invoke some uh cross chain like you want to invoke some other l1 in a private manner what you could actually do is like how

long do you need these messages to be private if it's just for front-running protection you can just need you just really need like a couple of blocks privacy where it's encrypted before they're executed so there's sort of a breadth of design space out there how we can think on how do we make more and more of this ecosystem private and zk like zero knowledge proofs aren't the and all um there's a ton more open that's probably going to take another 10 years to materialize into production-ready apps yeah i do so i agree the state matters but also i do think the vm does matter for a model like zexi right like if you're creating a proof about a state that even if it's public you just put everything on chain just publicly just make it public data but even then

you know you have these records that can only be updated by one person at a time right so like unlike ethereum this is solved because every node is a sequencer right effectively because they just decide okay hey the memphis and this by the way is why front running is a problem right because if you're the sequencer you're like that looks like a good trade i might just take it um so this is why again like this is like i think there's a really interesting kind of um tension between these different properties that we're trying to achieve i want to bring this back to cosmos the other side of the private privacy and cosmos how do you i mean i think in the case of penumbra there's very clear connections already to cosmos and ibc but yeah how are you how are you all thinking about

actually this ecosystem is this an ecosystem that you see yourselves bridging to or working with bridging projects to get kind of connected to and how could maybe people in the cosmos ecosystem start to think about your projects um yeah i mean from the enormous side we are normal wants to bridge to everything at the moment by far the best bridging tech out there is ibc so i would really say everyone should be building ibc adapters for every other chain um like people should be out there building ibc adapters for nia for flow for pocket art you name it pretty much any fastphone ltb of t chain someone currently should be building an ibc adapter because that makes not necessary to connect it to cosmos but to make all

our like all chains connected to each other because this makes the ecosystem much more composable if you can all of a sudden do a penumbra aleo a norma amino hub because all these chains just have a common interoperability standard this is the way i think about bringing privacy to the entire blockchain ecosystem just by getting people to implement ibc because it's like it's a great protocol but what about like an evm like what about f like evm to evm do you think it should also be like like evmost to moonbeam or should both be ibcs is that the most effective way to do it yes this is the thing like um ibc has very little actually i think has no dependencies on the specific state

machine like it it's it has a dependency on the consensus as in it needs to be a fast final tp of t consensus it doesn't matter whether you're running an evm on that consensus or some zkvm that's secondary um this is like any bft chain should be implementing ibc to just talk to other bfg chains yeah in the case of um mina agree with that by the way although i know the nomad folks are doing some cool stuff there too for evm but side note um so in the case of mina as i mentioned briefly um mina is designed to be a full node whether you're on a client you know a traditional client or you're on you're under blockchain right so we're incentivized to

bring value to every other layer one or layer two ecosystem out there by providing this kind of user data privacy layer um to the other chains out there whether that's cosmos whether that's ethereum solana what have you in fact um there has been uh trust what we call a trusted zk bridge from mina to ethereum that's been in progress for a while hopefully there's going to be some sort of a you know demo or overview in east amsterdam in the next week next weekend and you know that by nature is the fault for any other evm chain as well so for example evmos in the case of cosmos but then also is not vm dependent either it's just engineering that needs to be done for an efficient smart contract

verifier of the canonical state canonical zk state of of mina so our goal is to you know basically just bring the some of the unique features that we can to every other specifically about zk to every other um layer one ecosystem out there what what would someone in the cosmos ecosystem be able to do with that yeah so let's say you're a you know an amm or let's say you're a lending pool on you know atmos or cosmos or whatever um and you know you don't only want to serve over collateralization you know for your um your for your lending logic you want to be able to underwrite users for that you need data on your users you know whether it's their identity or whether it's their financial background

how much salary they're making and let's be honest as much as we'd like you know 99.999 of the world is not using blockchain for their daily stuff other than maybe buying and selling and speculating so um you need to be able to ingest that data in a private way because no one is going to put their you know this is how much i'm getting from my employer every month in my bank account you're not going to put that on youtube unless you work in blockchain wow and apparently it's all public yeah but um i personally don't think that's a viable feature so um yeah so there you know mina can provide this rails where users are easily able to bring using you know zero knowledge um easily able to bring in attestations

about their data whether it's their credit score or their credit history or anything else about you know whatever the underwriter might require and then have that automatically settle down to let's say fmos just because it's the straightforward answer here automatically settle down to mls because most would be running in full node of mina and be aware of all these state updates so that's kind of the end to end flow that we're imagining here it's such that any other layer one application can benefit from this zk attestation superpower cool i think it's similar for elio so i won't rehash all that but i guess the one thing i just quickly want to highlight and full intellectual credit to the of one folks and isaac and you know and the folks over there you know this idea of

this recursive proof right you can one of things about that snarks let you do aside from cloak or conceal is compress right and this is about compressing a lot of state into a small proof this is how roll-ups effectively work and but i think there's a it's overlooked as a tool for bridging right it enables you to take a lot of state or a current state and compress that down as something that's relatively lightweight this is exactly so you know effectively most bridges are implemented as light clients on the destination chain if you have a very light light client then um that can be a very powerful tool that you know again like mina again or the of one folks kind of came up with this concept others including cello we're you know we also are have a kind of a recursive like client that that we use at alia but i

think in general this is a concept that can be adopted i think is the future for bridging across the space is using this compressing property of zero knowledge proofs to potentially make it easier to run full light clients on you know as destinations of whatever bridge um my confession is that i was listening and then forgot the question the question was how are you connected to cosmos but for you oh pretty yeah i think for us it's like fairly straightforward um uh i think that part of the kind of like meta uh there is that not met at the company no okay we can't use that word anymore by the way i i've actually succeeded in not having that be part of my okay okay so i wish i

was so lucky yeah um so part of the thought there is like about you know how do we sort of have like a small scope that we think we could like definitely build um and i think part of the reason um like i mentioned in a little while ago is like the idea that if you have really pervasive bridging you can intentionally like spec specialize and like narrow the scope that like one project needs to do and so for us i think sort of like how do we like what is our

relationship with sort of like everything else in cosmos it's like okay well like everything except for like the four like bullet points that were on one of my slides of like stake transact swap and market make like literally everything except for that you should go and use another chain um and that strategy only works because of sort of intentionally conceptualizing ourselves as part of this like interchange ecosystem rather than being like trying to like we're not trying to build an ecosystem we're just living in one cool all right i feel like i've taken up a lot of time with these panelists i do want to open it up to the floor i don't

know if anyone has any other questions i do have more stuff if you don't but i wanted to share the option so yeah this is questions for our zk and privacy experts hey guys good panel sorry a couple questions i guess first um i'm curious what what percent of applications do you think will end up being privacy preservative in the blockchain or web3 ecosystem right because traditionally you know like in web 2 it's been an uphill battle and the percent is actually pretty low kind of curious from the demand that you've seen um what just yeah just give me a number and kind of think through this and i think a

second question that i have is around security and how you think about it kind of you know zk privacy preserving attack in general is very complex right and like a lot of credit to a lot of the builders curious how you approach security how you think about you know audits and things like that and how do you think about catastrophic kind of failures when privacy or when there is a bug when the privacy is leaked and compromised kind of how you think through those things thank you yeah um percentage is the first one yes so you mentioned the example of web 2 and not a lot of things are privacy preserving web two i would actually push back against this and say the model is different right because uh your bank is private to 99.999

of the world population it is public to the organization uh the same is true for twitter facebook pretty much all web two things are privacy preserving against the general public um unless you're like a nation state like if you're the nsa then you're not private against the nsa but pretty much against everyone else you're fully private and i think as a result if we want to build web 3 we really have to think how do we get to a similar model where very very few people have access to all the data because currently the model we have is ethereum and everything is public and just think for a moment that like world finance moves to ethereum tomorrow um and everyone is fully public like this is not like that it's web 2 public

it's like no everything is completely public on every human on earth and the next day someone sort of in the middle of nowhere with internet connection can run a global financial mass surveillance program by having an internet connection it is like we have to be way more privacy conscious in web 3 than in web 2 because we don't have a bunch of institutions that effectively guarantee our privacy for most parts against the general against the rest of the world so i would say like we probably need i don't know practically speaking 99 of all applications event on web 3 eventually need to be private because otherwise this is like a significantly worse security guarantee and privacy guarantee

than web 2 for most normal users of these systems i was going to say the exact same thing well not the exact sorry no no i mean but what i would add to that is like at the end of the day blockchains are a global state layer right that's what they are and not everything needs you know a global state layer either right so it's it's in my opinion it's going to be a part of you know the internet and if you cannot somehow preserve your privacy with within this spectrum then you know you may not need to be using a sort of a web3 landscape but then also on top of it what percentage of web3 if we ask it that way i think it also depends an average user i would say yeah like definitely 95 of it will end up being

private because i don't see anyone in their right mind sharing this much information you know on an ongoing basis um but maybe as a you know in a tvl sense maybe it's less than that because um ultimately if you kind of as a user you interact with some private layer and then that settles down to again maybe ethereum ends up being this global settlement layer for all the value and it's not private and that's fine because what what you're seeing on ethereum doesn't give you information on a per user basis it's aggregated so that might end up being not private by definition but also you know private in some in some other sense not linkable yeah i think the first two so i agree with what these two gentlemen said on the pri on the you know kind of importance of privacy i think yes a

second question though which is around complexity um i think it's a great point and you know remember one of the hard things about private protocols is that if something goes wrong sometimes you can never know i mean zcash very famously had a bug and was it ever exploited do we know i mean probably not but yeah no it hasn't been exploded yet okay well we know that the turnstile hasn't been broken so but the point is like you know that it's these things could go undiscovered and that's a little bit dangerous but on the other hand i think in some ways it's more secure because you're you're putting more assumptions on cryptography whereas if you look at like a lot of web 3 you know there's so much i mean one of the greatest innovations are arguably the innovation of web that enabled web3 is this this

game theoretic security right but when you start layering game theoretic game theory on game theory you know at some point the assumptions you have to question whether or not it will actually work right i mean there's there's this concept that's kind of been around for a long time thinking about you know yeah like ethereum validators are all supposed to run re-run every state transition exactly step by step by step but do they like or do they just take whatever node they got it from's word for it right if they're like okay this block came through i do i really need to re-execute these transactions i mean they're kind of not really incentivized to so i guess if you're thinking about does ethereum provide me as much or does any model that that relies on game theoretic consensus actually provide me the security i'm thinking i'm getting i

don't know i think it's it's a much less definitive answer than a cryptographic proof right where i mean the idea is if you believe the math you know of course there's there's flaws found in these things all the time but fundamentally it's a much much smaller window if you can design it right now these systems are brand new and of course because like ask any cryptographer they'll be like if it hasn't existed for 50 years it's broken you know what i mean like that's the attitude and it's that's an attitude for a reason but you know i think we're going to get there and and i think the the fundamental assumptions that these are resting on i think in some ways are stronger i think on point two uh we should be doing way more formal verification of cryptographic protocols because they give us fairly high assurances that

these systems are correct i think we shouldn't this is sort of why i'm terrified of this one chain to rule them all narrative especially around ethereum right that like we should design these systems that are interconnected where components can fail independently we shouldn't build like one global financial system on ethereum or on any other blockchain for that matter we should have many different blockchains and they should all be able to catastrophically fail but when they fail they only kill themselves they don't kill everything else whereas if you have like imagine a model where like everything is settled on one security model you all of a sudden have this problem that like well the security model may fail due to cryptographic

assumptions um and all of a sudden like global financial sys the financial system just breaks like this is not how we should be building way more for resilience and that necessary means that like we need interconnected systems that can fail independently and sadly most of the ways that most money is lost in web 3 today are just like way more benign than that like i mean it's almost a good problem if you get to the point where someone's exploiting this like deep down dark fissure of a protocol because you know there's so much low hanging fruit unfortunately um but yeah no i think i think it's it's a it's a reasonable concern yeah um that i i think i kind of laughed a little bit when adrian mentioned the

sort of like if we imagine like the you know tomorrow the entire world financial system like is on ethereum like if you think about like how that actual that ecosystem actually works like that just that concept is like really hilarious um but uh to the first part about privacy like because of that baseline of public blockchains just being like this complete like information free-for-all i think that the the kind of the bar has gone a lot lower than it even was in in in web 2. and so with respect to the the privacy aspect i think that as the deployment of zk systems uh matures we're going to have to start getting

into more nuance about like okay private to whom right if you have um a model like uh mina or ilio you could actually imagine like doing a lot of like the kind of you know web 2 level of privacy but just with this extra assurance that actually all of the data was like executed correctly um because you can commit that onto this chain and use that as the settlement layer and i think we're going to sort of see this like spectrum of um different like levels of of privacy where maybe in some cases you know there's someone who's like relatively

trusted maybe in other cases you know there's attempts to try to minimize that through engineering um on the second point about the kind of assurance of the cryptography um this is something that i'm actually very optimistic about but not for any kind of technical reason it's actually a social reason and that reason is that the if you look right like the the bug in z cash right like you know that that bug was not exploited because at the time that it existed there were like 12 people in the entire world who like even understood that that could happen and they all worked on zlatan right like it's both reassuring and not assured but yeah right but

but if you look at what's happened in the last um you know say like four or five years and in large part because of like the leadership of of of zcash right like now you have this whole ecosystem of all these people um who are developing like really really good production quality implementations of quite complex cryptography right like the fact that mina exists is just like incredible right and it's not because there's some like technical advance that's driving that it's because there is now this like production of people who do really serious real world zk stuff and that is only

gonna keep growing and so i think like that like force is gonna like wash out like like all of the technical details the formal verification like people are going to build the tools like it's going to happen because there's just it's momentum it's there oh that's the power of open source last point because we're one very quick thing one when i explain like why i'm excited about webtree to other tech people non-web3 tech people i agree with like the point about like more crypto cryptography professionals and more better cryptography but also like this whole space is a amazing trojan horse to get cryptography into the hands of everyday people right like no one in web 2 has a problem like very few people have a public private key pair in their hands

but anyone with a metamask you know extension because they want to buy some nft they get this public private key pair and and they can then use it for other things which i think is amazing amazing all right sorry yeah uh this was amazing thank you so much for doing the panel uh i hope you guys enjoyed it i know we're a little bit late but yeah thanks so much thank you for having us and i think if anyone is interested in learning more about these teams you will be sticking around i hope i do want to let everyone know especially those who came later we're actually doing a dinner later tonight here so this event ends around 5 20 now because i think we're 20 minutes late we're 30 minutes late 5 30. and then at

7 we're also doing a dinner here and you're all invited so i just want to make sure you know that it would be very cool to hang out and we might try to do karaoke do you know this okay that i mean some people didn't we're into here for the intro so i thought i should let you know okay cool thanks a lot uh please don't leave the room because we still have one more talk so there is no break no break yeah no break no break we're still staying here so please take your

seats and i'm inviting carlos rodriguez vega to give the last talk and after that yeah we're gonna wrap up thank you hello yeah thanks so yeah hello everyone my name is carlos

i'm the ibc engineering manager at interchange gmbh and today i'm going to be talking about one of the most important but sometimes difficult to understand core building blocks of ibc which is the the light clients yeah i'm going to talk about what what they what they are why they are one of the difference between the differentiated factors of ibc i will talk a bit also about the division for ibc and what part zero knowledge proofs could play in that in the future so okay so probably everybody is familiar with ibc but for those that know that are not just very briefly ibc stands for inter

blockchain communication proto interval interproxy communication is a protocol that allows sovereign independent chains to communicate with each other so yeah this picture at a very high level shows the main actors involved engaged in inter blockchain communication we have the nodes uh participating in two chains chain a and c and b and we have some uh of of chain processes called relayers that are able to submit transactions on each chain um ibc relies very heavily on online clients to guarantee the correctness on the security of the

protocol and this is one of the differentiating very distinctive factors of ibc compared with other comparing with other bridging bridge or interoperability solutions in general a light client is a client that connects to a full node requests new headers is able to verify by checking hashes and signatures that those headers are are trusted and are regenerated by the underlying blockchain and in the context of ibc chains run a light client of the counterparty chain with which they communicate so in this case chain a runs a light client for chain b

and chain b runs a light client for chain a the lite client um on on its chain tracks the consensus state of the counterparty and it knows how to verify proofs against that consensus state so for example if we talk about a very concrete um example uh of the token transfers um for example if i want to send tokens from chain a to chain b um there would be a transaction in chain a that stores in a state a commitment for sending those tokens that commitment a proof of that commitment together with a block header

is relayed by the relayer to chain b and there the client the light client for chain a can verify that that commitment for sending tokens is actually stored and the tokens can be received and yeah this is the reason why we say that the design of ibc is trustless because there's no need to trust any other party except the two the two chains that are involved in the communication we don't even need to trust on the relayers we only need them for liveness we need them to submit messages to update the light clients to transfer data packets from one chain to

another but we don't need to place any extra trust on them for the security of the protocol yeah yeah now we compare with bridges another interoperability solutions er one of the other solutions yeah there is an extra trust leisure we need to to trust the the bridge validator set and yeah what happens if you cannot trust the validator set of the bridge yeah we have seen in the in the last months is several high profile hacks like the wormhole wormhole attack where the attacker was able to um

to submit transactions with valid signatures from the validators of the bridge um yeah withdrawing basically uh the wrapped heath on solana and then exchanging it for ith in ethereum uh this was actually the the main problem was that there was a smart contract exploit uh to do to be fair but but recently we also had the running hack where the attacker yeah running is an ethereum side chain but it was one that was very centralized so there were only nine validators and the the the attacker managed to take control of the private keys of five of those validators

to fake force withdrawals of the funds in the bridge so yeah as more and more value flows through cross-chain bridges this become a more attractive target for for hackers so yeah cross-chain bridges and protocols are critical infrastructure and any attack any successful attack has cascading effects at the moment yeah the three largest by dollar volume hacks are our attacks on on bridges so that's why yeah it's it's a critical infrastructure at the moment and yeah

deserves special attention so if we talk about about the vision for ibc um yeah ibc launched last year with one application with the fungible token transfers we released the interchange accounts recently and it went live live on the hub this week we're going to release related synthesization very soon and we have in the pipeline some very exciting features yeah some teams in the ibc community are working on ibcq queries which will allow a change to query to query the state of their counterparties also also teams are working on nft

transfers we also have in the pipeline features to make ibc more sustainable and scalable like connection and channel upgradability this will allow chains to take advantage of new features without having to create new connections and channels and we also have a multi-hub routing this is a this is a feature that will allow to send data packets from a source chain to a destination but hoping through an intermediate intermediary chains and yeah at the moment yeah the cosmos ecosystem consists of more than 40 zones all of those

interconnected with ibc these chains are built with the cosmos sdk they are using the tendermint consensus algorithm but the vision of ibc is to yeah make it a universal standard protocol for inter blockchain communication so we want to expand beyond the cosmos we want ibc to be used in in other ecosystems and uh yeah for that reason we also need a light clients for the consensus algorithms of those other blockchain ecosystems and yeah there are efforts going on on that front so for example there is a work being done

on a beefy lite client in go so this this would be the the light client that cosmos sdk chains can run to verify a state of uh chains built on substrate there's also work being done to develop ibc and a tender main light client in rust so substrate chains can run the tender mainline client and verify the the state of cosmos sdk chains for evm compatible um chains that run the ib ib ft 2.0 consensual algorithm there's also a work going on to implement ibc and the ib ft lite

client in solidity this ibc this implementation of ipc solidity is also being used for a tendermint light client for the cello evm and there's also an implementation of the cello lite client that is targeted to run as a wasm binary in cosmos cosmos chains and beyond this there's also there would be also in the future work to implement light clients in other blockchain ecosystems like near or algorand and yeah another potential area of research that is it will eventually probably come to our roadmap

is the use of zero knowledge proofs um yeah we have we we consider at the moment like two use cases uh one of them is related to computation optimization or compression um yeah there are two places where this can be applied uh one of them is when updating like clients this is one of the most expensive operations because we need to verify the signatures of the validators that have assigned the block header that is going to be used to update the light client and also when verifying the straight transitions of a chain

there needs to be a american proof computation to compute the a root hash and as a state trade state state trees becomes more larger the the computation becomes more expensive so one post possible optimization there is to wrap or convert the miracle proof into a secrecy snark that is is verifiable in constant time independently of how large the state tree grows this imposes extra complexity on the approver to to create to generate the ck seek snark but the verification becomes cheaper for the for the verifier and the second

area of use is obviously privacy so as more chains or zones are joining um there have a shielded features then it would make also sense to be able to send or receive packets in a private way so basically to have shielded transactions over ibc and yeah i would like to thanks also the folks at ccas socrates and noma for the time that they spend with us discussing these ideas and sharing their ideas on this topic and that's the end of the presentation so if you have any questions i will be happy to answer [Applause]

[Music] all right um i want to apologize i actually missed the beginning of your presentation but with what you just shared what's the road map or timeline for this for the serial knowledge yeah yeah this is difficult to say it's really a very early stage kind of research idea we have other things still in the pipeline like uh yeah upgradability multi-hop routing other features but this is something yeah that can come at

some point uh at the moment we don't see bottlenecks on on for example updating clients or computation of medical proofs but as the usage of ibc exponentially grows hopefully these are areas that could be affected performance-wise and then zero knowledge proofs could offer some some solution there and the first one the sort of light client is that using that kind of compression technique is that the idea there that you would make it like a smaller client yeah that's the idea yeah cool is it influenced by plumo sorry is it influenced by plumo the cello like client at all uh or that no okay well i'll tell you about it okay

cool any other questions all right thanks thank you [Applause] so uh that wraps us up right okay so i think i don't know if we don't think we really told them which slide we had a slide yeah but we forgot to say which one it is uh so i guess that ends this oh yeah there it is great fantastic yeah so i think just to say

basically big thank you for everyone for coming especially all the speakers i think it's been an amazing day we're going to be sending out a feedback form and we'd love to hear your thoughts um and uh if you want to learn more about other things that we're doing as uk validator you can find them on our blog and our website and also support us um by delegating your atoms or osmo um yeah thank you very much and eventually evmus and and hopefully very soon um i wanna just uh there's an event coming up a cosmos event and david was about to tell us a little bit about it so just take if you want to just come up here really quickly hi everyone

i just want to invite you to uh to the next cosmos event that is happening in prague from 16th to 17th of may so that's monday and tuesday so you can come on saturday explore the city and then you know go to the conference uh the conference is developer focused and it will be in a similar way as uh as cosmo versus was in lisbon if you were there so like everyone is coming sunny from osmosis zaki uh dean you know sergey as well billy and guys from inter informal interchange so it will be a cool event you can just you know take your laptop there

do some coding get some bounties and then enjoy some party on monday it will be a cool party so i hope to see you there thanks do you want to do okay so one small note is we have a member of our team who's sadly leaving the zkv org to actually go deeper into the cosmos ecosystem so susannah thanks so much for your work on this event and generally and uh yeah woohoo all right so that wraps us up as i mentioned stick around we're gonna do some food at seven

oh we're gonna leave here we can go downstairs and hang out where the bean bags are and the little space star stuff and the fireplace um yeah and please do get in touch with us hang out and actually i guess maybe on the privacy front you know continue to explore with us this idea of how we can bring privacy into cosmos we think this is important we hope you do too cool thanks you