1 00:00:13,800 --> 00:00:15,920 Epicenter is turning 10 this month. 2 00:00:15,920 --> 00:00:18,680 It's incredible to think that we've been doing this podcast 3 00:00:18,680 --> 00:00:22,840 now for a decade and we're inviting all of you to join us 4 00:00:22,920 --> 00:00:26,960 for a very special 2 hour live stream celebration on December 5 00:00:27,120 --> 00:00:30,280 20th. Brian, Maher, Frederica, Sunny, 6 00:00:30,280 --> 00:00:33,640 Felix, and I will all be there and we'll be joined by lots of 7 00:00:33,640 --> 00:00:35,960 special guests throughout the live stream. 8 00:00:35,960 --> 00:00:38,520 It's going to be a lot of fun and we want you to join us for 9 00:00:38,520 --> 00:00:43,240 this very special occasion. The live stream starts at 1700 10 00:00:43,240 --> 00:00:45,240 UTC. That's 9:00 AM Pacific Noon 11 00:00:45,240 --> 00:00:49,680 Eastern 6:00 PM CET and there's going to be a lot of Epicenter 12 00:00:49,680 --> 00:00:51,920 trivia. We'll be sharing some fun 13 00:00:51,920 --> 00:00:55,440 stories and anecdotes from 10 years of doing the show, and 14 00:00:55,440 --> 00:00:58,200 there's a special PO out for anybody who joins the live 15 00:00:58,200 --> 00:01:01,040 stream. So join us on December 20th as 16 00:01:01,040 --> 00:01:03,080 we celebrate a decade of Epicenter. 17 00:01:03,640 --> 00:01:06,320 Go to youtube.com/epicenter podcast. 18 00:01:06,320 --> 00:01:08,920 You'll see the placeholder for the live stream there. 19 00:01:08,920 --> 00:01:10,720 You can subscribe and get notified. 20 00:01:11,440 --> 00:01:14,360 So we hope to see you there. And now back to this week's 21 00:01:14,360 --> 00:01:18,080 episode. This episode is brought to you 22 00:01:18,080 --> 00:01:20,760 by Gnosis. Gnosis builds decentralized 23 00:01:20,760 --> 00:01:24,800 infrastructure for the Ethereum ecosystem with a rich history 24 00:01:24,800 --> 00:01:29,640 dating back to 2015 and products like Safe Cow Swap or Gnosys 25 00:01:29,640 --> 00:01:32,520 Chain. Gnosys combines Needs Driven 26 00:01:32,520 --> 00:01:35,640 Development with deep technical expertise. 27 00:01:36,360 --> 00:01:39,960 This year marks the launch of Gnosys Pay, the world's first 28 00:01:39,960 --> 00:01:44,400 decentralized payment network. With Agnosys Card, you can spend 29 00:01:44,400 --> 00:01:48,240 self custody crypto at any visa accepting merchant around the 30 00:01:48,240 --> 00:01:50,760 world. If you're an individual looking 31 00:01:50,760 --> 00:01:54,240 to live more on chain or a business looking to white label 32 00:01:54,240 --> 00:01:59,040 the stack, visit gnosispay.com. There are lots of ways you can 33 00:01:59,040 --> 00:02:02,600 join the Gnosis journey. Drop in the Gnosis Dow 34 00:02:02,600 --> 00:02:06,520 Governance form, become a Gnosis validator with a single GNO 35 00:02:06,520 --> 00:02:10,960 token and low cost hardware, or deploy your product on the EVM 36 00:02:10,960 --> 00:02:13,800 compatible and highly decentralized Gnosis chain. 37 00:02:14,800 --> 00:02:17,680 Get started today at Gnosis dot IO. 38 00:02:19,160 --> 00:02:22,440 Chorus One is one of the biggest node operators globally and will 39 00:02:22,440 --> 00:02:25,760 help you stake your tokens on more than 45 networks like 40 00:02:25,760 --> 00:02:27,600 Etherium, Cosmos, Celestia and Dydx. 41 00:02:28,440 --> 00:02:31,920 More than 100,000 delegators stake with Chorus One, including 42 00:02:31,920 --> 00:02:34,360 institutions like Bit, Go and Ledger. 43 00:02:34,680 --> 00:02:37,920 Sticking with Chorus 1 not only gets you the highest yields, but 44 00:02:37,920 --> 00:02:40,880 also the robust security practices and infrastructure 45 00:02:41,160 --> 00:02:43,840 that are usually exclusive for institutions. 46 00:02:44,520 --> 00:02:47,360 You can stake directly to Chorus One's public node from your 47 00:02:47,360 --> 00:02:50,360 wallet, set up a white label node, or use the recently 48 00:02:50,360 --> 00:02:55,000 launched product Opus to stake up to 8K ES in a single 49 00:02:55,000 --> 00:02:57,440 transaction. You can even offer high yield 50 00:02:57,440 --> 00:03:00,240 staking to your customers using the Chorus API. 51 00:03:00,760 --> 00:03:03,920 Your assets always remain in your custody, so you can have 52 00:03:03,920 --> 00:03:06,960 complete Peace of Mind and you can start staking today at. 53 00:03:06,960 --> 00:03:11,360 Chorus .1. Hey hello everyone, welcome to 54 00:03:11,360 --> 00:03:16,200 Epicenter. Today I am talking to Aki Balog, 55 00:03:17,080 --> 00:03:20,760 who is the cofounder and CEO of DNC Link. 56 00:03:21,560 --> 00:03:27,560 This is a kind of a visionary project that's figuring out a 57 00:03:27,600 --> 00:03:32,560 new architecture to bridge Bitcoin from Bitcoin to the 58 00:03:32,600 --> 00:03:36,680 other ecosystems like Ethereum. Now of course, a lot of projects 59 00:03:36,680 --> 00:03:40,840 have tried and implemented commercial systems to do similar 60 00:03:40,840 --> 00:03:45,000 things, but they have a really cool architecture that minimizes 61 00:03:45,000 --> 00:03:48,400 the trust required in the bridge of technology. 62 00:03:48,400 --> 00:03:52,680 So please welcome Aki to the to the show. 63 00:03:52,680 --> 00:03:54,840 Hi, Aki. Hey, thanks for having me. 64 00:03:56,400 --> 00:04:01,240 So tell us, tell us first about how you entered into the crypto 65 00:04:01,280 --> 00:04:06,760 ecosystem, into this madhouse. Well, I'm very happy to be here. 66 00:04:06,760 --> 00:04:09,080 I came in full time three years ago. 67 00:04:09,720 --> 00:04:11,680 I guess. Just a quick background on me. 68 00:04:11,680 --> 00:04:14,680 I've been a developer since I was like 9 or 10. 69 00:04:15,120 --> 00:04:19,079 I went to computer science undergrad or actually instead of 70 00:04:19,079 --> 00:04:21,560 high school. I did college college degree in 71 00:04:21,560 --> 00:04:26,880 CS and then BBA undergrad. And yeah, I I was in AI for over 72 00:04:26,880 --> 00:04:29,840 10 years actually. I was in AIVC or machine 73 00:04:29,840 --> 00:04:34,480 learning big data VC when the no sequel stuff started in 2011. 74 00:04:34,720 --> 00:04:38,880 So I got into data management. Then I actually heard about 75 00:04:38,880 --> 00:04:43,360 Bitcoin in in 20 like 2011, 2020, 12 actually. 76 00:04:43,720 --> 00:04:46,600 But I didn't have the space to kind of the mind space to get it 77 00:04:46,600 --> 00:04:49,720 then because I was building an AI company, an AI marketing tech 78 00:04:49,720 --> 00:04:52,840 company called Market Muse, which I founded and LED for 79 00:04:52,840 --> 00:04:55,680 eight years. And so when I stepped away at 80 00:04:55,680 --> 00:04:59,840 Market Muse and you know we put ACEO in there to to run it, I 81 00:04:59,840 --> 00:05:02,480 thought this would be the perfect time to to come to Web 82 00:05:02,480 --> 00:05:05,640 3. It's just the amalgamation of a 83 00:05:05,640 --> 00:05:08,640 lot of things that I was interested in finance, 84 00:05:08,640 --> 00:05:13,120 crowdfunding, data managing database tech you know self 85 00:05:13,120 --> 00:05:16,680 sovereignty, empowering people you know giving people good 86 00:05:16,680 --> 00:05:20,720 options in also interior you know in developing countries. 87 00:05:20,720 --> 00:05:24,040 I was born in Hungary and in a smaller town called Debrett San 88 00:05:24,040 --> 00:05:26,480 and we grew up in you know Boston and Michigan. 89 00:05:26,480 --> 00:05:29,120 So it just all of it came together and finally had the 90 00:05:29,120 --> 00:05:32,440 mind space to to get into the space and my father had been a 91 00:05:32,440 --> 00:05:36,480 scientist all his career and so also with market muse I just I 92 00:05:36,480 --> 00:05:40,840 found my niche's you know finding technologies that that 93 00:05:40,840 --> 00:05:43,600 could really be developed into products and and figuring out 94 00:05:43,600 --> 00:05:45,480 how to productize and commercialize it. 95 00:05:46,080 --> 00:05:49,840 I did that with my last company. I I am a co-author and two 96 00:05:49,840 --> 00:05:52,560 patents or I guess I I don't know what the term. 97 00:05:52,560 --> 00:05:56,840 I have two patents in the area of topic modelling and semantic 98 00:05:57,080 --> 00:06:01,480 keyword analysis and so when I came to crypto I wasn't I wasn't 99 00:06:01,480 --> 00:06:04,840 a cryptographer. I I don't think I I I have that 100 00:06:04,960 --> 00:06:09,960 background but but I found this this opportunity, this white 101 00:06:09,960 --> 00:06:14,360 paper that Tadge at MIT had published and I'm at the DLC 102 00:06:14,360 --> 00:06:16,280 community. I met some brilliant people and 103 00:06:16,280 --> 00:06:19,560 I thought this would be an area where we could, you know, I I 104 00:06:19,560 --> 00:06:22,360 could help in. And then I found my Co founder, 105 00:06:22,360 --> 00:06:24,760 Jesse. And then we've been kind of, you 106 00:06:24,760 --> 00:06:28,080 know, trying to be active members of the DLC community for 107 00:06:28,080 --> 00:06:32,080 over 2 years now. That's really cool. 108 00:06:33,680 --> 00:06:38,880 I'm curious if you have any regrets switching away from EI 109 00:06:38,880 --> 00:06:42,680 to Web Three and then maybe one year into your journey, Chad GPD 110 00:06:42,680 --> 00:06:46,320 launched and such a huge EI boom kicked off. 111 00:06:47,360 --> 00:06:52,520 It was funny that I yeah, I was in AI when two, maybe arguably 112 00:06:52,520 --> 00:06:57,760 too early before before this and and missed out on the big run up 113 00:06:57,760 --> 00:07:00,080 of, you know, Bitcoin and EI heard about both. 114 00:07:00,080 --> 00:07:02,160 I just couldn't really participate. 115 00:07:02,680 --> 00:07:05,840 And then I came to crypto. It crashed and AI went up it. 116 00:07:05,880 --> 00:07:10,840 It's sort of the joke but but you know, I don't I I don't 117 00:07:10,840 --> 00:07:13,080 really honestly don't have regrets because I'm really 118 00:07:13,080 --> 00:07:16,320 focused on building things that add value for society. 119 00:07:16,320 --> 00:07:18,840 I know that's always a like a thing founders say. 120 00:07:18,840 --> 00:07:23,040 But for me it's it's true that you know I, I love my, my 121 00:07:23,040 --> 00:07:26,480 father's kind of love for invention and kind of primary 122 00:07:26,480 --> 00:07:29,520 research and you know basic research and and I always wanted 123 00:07:29,520 --> 00:07:32,320 to build things that just really make a difference. 124 00:07:32,720 --> 00:07:37,040 And and you know I think AI helps in a lot of ways. 125 00:07:37,280 --> 00:07:38,800 Web three helps in a lot of ways. 126 00:07:38,800 --> 00:07:41,880 On some level these are all infrastructure and it's really 127 00:07:41,880 --> 00:07:44,760 about what we build with these with these tools. 128 00:07:45,080 --> 00:07:48,280 But I'm still somewhat involved with some AI companies. 129 00:07:48,880 --> 00:07:51,760 Actually our friend that introduced us on show is heavy 130 00:07:51,760 --> 00:07:53,720 into AI. We talk about it almost every 131 00:07:53,720 --> 00:07:56,800 week. So you know, but I'm, I'm happy 132 00:07:56,800 --> 00:07:59,480 to be here and I'm, I just want to make a difference with you 133 00:07:59,480 --> 00:08:02,480 know with our work and that's we're we're getting a lot of 134 00:08:02,480 --> 00:08:06,000 that here And and I think the timing now is very strong 135 00:08:06,000 --> 00:08:08,120 because you know we've got the halving coming up. 136 00:08:08,280 --> 00:08:10,360 We've got Bitcoin ETFs launching. 137 00:08:10,560 --> 00:08:14,160 You know Bitcoin has sort of crossed the chasm it's in use by 138 00:08:14,160 --> 00:08:17,680 people in El Salvador and other places on a mass scale. 139 00:08:17,680 --> 00:08:21,360 And and that's what attracted me to you know to to this bit you 140 00:08:21,360 --> 00:08:23,520 know to building on Bitcoin, quote UN quote. 141 00:08:24,000 --> 00:08:27,080 I think that the time has come for this to be, you know, more 142 00:08:27,080 --> 00:08:30,920 easily usable than before. Right. 143 00:08:30,920 --> 00:08:38,039 So you mentioned that you started out meeting Dash and the 144 00:08:38,039 --> 00:08:42,520 DLC community DLC standing for discrete log contracts and 145 00:08:42,520 --> 00:08:47,600 that's kind of like the core pillar on which your commercial 146 00:08:47,600 --> 00:08:51,960 efforts are for the inventing on top of top of that. 147 00:08:51,960 --> 00:08:55,840 So let's start there. What is a discrete log contract 148 00:08:55,840 --> 00:08:59,400 and why were they invented? Yeah, yeah. 149 00:08:59,400 --> 00:09:05,080 So Hedge also is probably most known for his other invention, 150 00:09:05,080 --> 00:09:08,520 the Lightning Network. So right before he published the 151 00:09:08,520 --> 00:09:11,000 Lightning white paper, he published this white paper on 152 00:09:11,000 --> 00:09:14,360 DLCS entitled, like smart contracts on Bitcoin. 153 00:09:14,360 --> 00:09:18,120 The the original idea was how can we, you know, add some sort 154 00:09:18,120 --> 00:09:21,160 of logic to Bitcoin? And he kind of, you know, 155 00:09:21,160 --> 00:09:25,040 proposed a math around it where basically you can have, you 156 00:09:25,040 --> 00:09:26,440 know, two parties. Alison. 157 00:09:26,440 --> 00:09:30,560 Bob you know put some Bitcoin and make sort of a bet like 158 00:09:30,560 --> 00:09:34,440 maybe like a sports bet and then you have this off chain entity 159 00:09:34,760 --> 00:09:38,960 quote UN quote Bitcoin Oracle Olivia the Oracle that decides 160 00:09:38,960 --> 00:09:42,400 who won the bad and then there's a you know cryptographic patch 161 00:09:42,400 --> 00:09:47,360 proposes A cryptographic way to to kind of to to execute this is 162 00:09:47,360 --> 00:09:51,240 so that the so that for example the off chain entity the 163 00:09:51,240 --> 00:09:54,960 Attester does not know who the parties are it's just signing 164 00:09:55,600 --> 00:09:59,600 you know outcomes or publishing at the stations And then the 165 00:09:59,600 --> 00:10:04,360 parties you know the basically the big the big invention that 166 00:10:04,360 --> 00:10:08,960 we also utilizes when the when when the users deposit Bitcoin 167 00:10:09,320 --> 00:10:12,320 they pre sign the addresses where it can go. 168 00:10:12,320 --> 00:10:16,080 So you have predefined everything up front and and it's 169 00:10:16,080 --> 00:10:18,880 sort of a secure system. And so there was a company 170 00:10:18,880 --> 00:10:23,120 called Short Bits, Chris Stewart and Nadav Cohen were primarily 171 00:10:23,120 --> 00:10:26,360 driving that and they had built the community around this. 172 00:10:26,360 --> 00:10:31,960 They had implemented the first DLC technology and so they were 173 00:10:31,960 --> 00:10:34,960 really the thought leaders driving these discussions and 174 00:10:34,960 --> 00:10:38,800 they had these monthly DLC kind of meetings and we would talk 175 00:10:38,800 --> 00:10:42,240 about this back and and and kind of implementation of it. 176 00:10:42,440 --> 00:10:45,720 And so when we came into the scene that's those were the you 177 00:10:45,720 --> 00:10:49,480 know people we we met and we it felt like there's a you know big 178 00:10:49,480 --> 00:10:53,120 opportunity here but also that community was sort of running 179 00:10:53,120 --> 00:10:57,600 into some challenges because there wasn't it was hard to get 180 00:10:57,600 --> 00:11:00,280 liquidity on it. There wasn't like a market for 181 00:11:00,280 --> 00:11:04,440 sports betting with DLCS mostly because people didn't really 182 00:11:04,440 --> 00:11:09,160 know what DLCS are and and like how do you find your peers and 183 00:11:09,360 --> 00:11:12,120 you know what kind of bed and then who is this mysterious 184 00:11:12,120 --> 00:11:15,760 Oracle that just happens to know everything that was always a the 185 00:11:15,760 --> 00:11:20,680 quote UN quote Oracle problem. So so anyway we we just thought 186 00:11:20,680 --> 00:11:24,120 we could kind of you know as the new people coming in maybe give 187 00:11:24,120 --> 00:11:28,720 us some fresh eyes and and so we actually started looking at DLCS 188 00:11:28,720 --> 00:11:33,600 in a different way as a user locking Bitcoin with a protocol 189 00:11:33,880 --> 00:11:37,920 and the Oracle being like an Oracle that we're familiar with 190 00:11:37,920 --> 00:11:41,040 like a price feed Oracle like chain link or 5th and they're 191 00:11:41,040 --> 00:11:43,480 being kind of a blockchain involved And and I can kind of 192 00:11:43,480 --> 00:11:47,000 describe that more but we basically repositioned you know 193 00:11:47,000 --> 00:11:50,160 the narrative and our understanding of DLCS and that's 194 00:11:50,160 --> 00:11:53,160 what we're building you know around now and I think that's 195 00:11:53,160 --> 00:11:55,880 what people will will find you know very actionable. 196 00:11:57,240 --> 00:11:58,840 That's really that's that's really cool. 197 00:11:58,840 --> 00:12:05,440 So actually like if we wrap our heads around the traditional DNC 198 00:12:05,440 --> 00:12:08,840 as envisioned by Dash, like if we have our heads around this 199 00:12:09,120 --> 00:12:13,200 sports betting framework that maybe he had in, in his mind 200 00:12:13,200 --> 00:12:16,800 while writing the paper and then it has this party which is the 201 00:12:16,880 --> 00:12:22,160 Oracle. And then if we switch the Oracle 202 00:12:22,160 --> 00:12:27,200 from being a single centralized party to being a protocol, when 203 00:12:27,200 --> 00:12:29,800 you make the jump from singles, endless party to protocol, that 204 00:12:29,800 --> 00:12:33,640 is when you get from the discreet log contracts to DNC 205 00:12:33,640 --> 00:12:38,360 link. So maybe we first start with 206 00:12:38,360 --> 00:12:42,680 kind of unpacking, unpacking the original idea, which is like a 207 00:12:42,680 --> 00:12:45,720 sports bet. So I'm kind of imagining this 208 00:12:45,720 --> 00:12:54,240 as, let's say the two of us, Aki and Maher A&M, we want to bet, I 209 00:12:54,240 --> 00:12:59,480 don't know, let's say a Bitcoin on the outcome of a of a game. 210 00:13:00,840 --> 00:13:04,000 So maybe it's a, maybe it's a soccer match. 211 00:13:04,000 --> 00:13:09,400 There's two teams in the so I'm kind of imagining it as the two 212 00:13:09,400 --> 00:13:14,240 of us putting money into into a transaction output. 213 00:13:14,320 --> 00:13:17,200 So maybe I'm putting in one Bitcoin there and you're putting 214 00:13:17,200 --> 00:13:21,840 in one Bitcoin there. And then the realization is that 215 00:13:22,880 --> 00:13:24,920 at the end of the bed, what can happen? 216 00:13:26,000 --> 00:13:28,960 Either two Bitcoin can come to me or two Bitcoin can come to 217 00:13:28,960 --> 00:13:32,200 you. Nothing else makes sense. 218 00:13:32,840 --> 00:13:42,160 So in a sense, I sign, AI sign a sort of transaction. 219 00:13:42,760 --> 00:13:45,000 But it's not a transaction I sent to the blockchain. 220 00:13:45,000 --> 00:13:51,760 I signed something that says in some scenario in the future two 221 00:13:51,760 --> 00:13:55,520 Bitcoin could come to me, I sign that and I also sign in some 222 00:13:55,520 --> 00:14:01,920 scenario in the future, two Bitcoin could go to A and you do 223 00:14:01,920 --> 00:14:09,400 the same. And then these kind of signed 224 00:14:09,400 --> 00:14:14,840 transactions require a signature from some centralized party 225 00:14:14,840 --> 00:14:18,320 which is called an Oracle. And this Oracle can kind of 226 00:14:18,360 --> 00:14:22,880 observe the match, get the results of the match and choose 227 00:14:22,880 --> 00:14:26,640 the correct transaction to sign, sign it, and then resolve the 228 00:14:26,640 --> 00:14:29,400 bet on the Bitcoin blockchain. Is that right? 229 00:14:29,880 --> 00:14:31,880 Yeah, yeah, that that's pretty much it. 230 00:14:32,400 --> 00:14:35,960 You can I I would just add in the original design too and and 231 00:14:35,960 --> 00:14:39,120 in the way some protocols use it, you can have kind of 232 00:14:39,400 --> 00:14:41,080 virtually any number of outcomes. 233 00:14:41,080 --> 00:14:44,440 Right now we have seen as we have done as high as 10,000 234 00:14:44,440 --> 00:14:46,800 outcomes. So you could have you know 1 1/2 235 00:14:46,800 --> 00:14:49,440 and half and whatever different splits. 236 00:14:49,840 --> 00:14:53,920 But but yeah, we also found that you you easiest way to think 237 00:14:53,920 --> 00:14:57,480 about it conceptually is like it all goes to Alice or it all goes 238 00:14:57,480 --> 00:15:00,360 to Bob. That's a that's a very practical 239 00:15:01,120 --> 00:15:04,800 you know way to do it because then other data you know can be 240 00:15:04,800 --> 00:15:07,760 handled logic can be handled in more sophisticated places 241 00:15:07,760 --> 00:15:09,640 elsewhere so. So that's a good example. 242 00:15:09,720 --> 00:15:13,360 That's the thing you you stick with that and so yeah you you 243 00:15:13,360 --> 00:15:16,600 basically have these a set of outcomes. 244 00:15:16,600 --> 00:15:20,480 I I also describe it like an if then else statement or if then 245 00:15:20,480 --> 00:15:23,280 statement. So if this condition happens 246 00:15:23,280 --> 00:15:27,520 then send it to you know a I'll send to B you can do something 247 00:15:27,520 --> 00:15:30,520 like that. And so these these create these 248 00:15:30,520 --> 00:15:35,240 kind of pre signatures they're called CE TS contract execution 249 00:15:35,240 --> 00:15:39,240 transactions and basically these are all predefined upfront. 250 00:15:39,480 --> 00:15:44,800 So you know both party both you know Alice and Bob signed them 251 00:15:45,200 --> 00:15:49,080 And then Olivia the Oracle has kind of a a special role because 252 00:15:49,360 --> 00:15:53,080 the Oracle is not a party to the two of two multi sig for 253 00:15:53,120 --> 00:15:58,000 security and privacy reasons of course but the the Oracle does 254 00:15:58,000 --> 00:16:02,000 publish there. There's a Oracle announcement in 255 00:16:02,000 --> 00:16:05,680 the beginning which is like hey you know Alice and Bob basically 256 00:16:05,680 --> 00:16:08,880 choose the oracles. So and you can have one or 257 00:16:08,880 --> 00:16:11,400 multiple oracles and we we could talk about that too but let's 258 00:16:11,400 --> 00:16:14,560 say Alice and Bob choose this particular Oracle publishes an 259 00:16:14,560 --> 00:16:18,120 announcement, hey you know this is the Oracle and the the the 260 00:16:18,120 --> 00:16:23,320 Oracle uses this private key to publish like a number for each 261 00:16:23,320 --> 00:16:26,440 outcome basically. So you can think of it as just a 262 00:16:26,440 --> 00:16:28,680 number. So you have you know outcome on 263 00:16:28,680 --> 00:16:32,440 outcome 2, they each get it on so one time use number and then 264 00:16:32,440 --> 00:16:36,400 the Oracle uses that Nos in conjunction with this private 265 00:16:36,400 --> 00:16:39,880 key to publish you know two public keys. 266 00:16:39,880 --> 00:16:43,400 You know for outcome 1, outcome 2 and then later when the 267 00:16:43,440 --> 00:16:46,960 outcome is known the Oracle publishes it's at this station 268 00:16:47,080 --> 00:16:50,000 which is basically just another number corresponding to 269 00:16:50,000 --> 00:16:53,880 whichever outcome one and then the the the again the Oracle is 270 00:16:53,880 --> 00:16:57,880 not a party to the multi sig. So what happens actually is the 271 00:16:57,920 --> 00:17:01,920 Oracle publishes this number into a public space and then 272 00:17:01,920 --> 00:17:06,680 Alice or Bob, either Alice or Bob can grab that and you know 273 00:17:06,760 --> 00:17:09,839 and and execute the transaction and then either Alice or Bob 274 00:17:09,839 --> 00:17:13,880 have to actually execute it. The the gas fees were also paid 275 00:17:13,880 --> 00:17:17,319 up front at deposit time. But you know presumably 276 00:17:17,319 --> 00:17:21,079 whichever party is the qualical winning has the incentive to 277 00:17:21,079 --> 00:17:23,960 execute the transaction. That's that's the base kind of 278 00:17:23,960 --> 00:17:27,920 DLC design. So, so that's really cool, 279 00:17:27,920 --> 00:17:30,040 right? Like so. 280 00:17:30,640 --> 00:17:34,600 Now of course we know that in in Ethereum because you have a 281 00:17:34,600 --> 00:17:40,080 during complete Ethereum Virtual Machine, you could you could 282 00:17:40,080 --> 00:17:45,040 write how far should be distributed in every outcome and 283 00:17:45,040 --> 00:17:49,320 Bitcoin lacks that. But what discrete log contracts 284 00:17:49,320 --> 00:17:55,960 are saying is if any financial interaction, if you can define 285 00:17:55,960 --> 00:18:01,680 the set of final outcomes and it's a finite set, not an 286 00:18:01,680 --> 00:18:07,720 infinite set, then you can use the finiteness of possible 287 00:18:07,720 --> 00:18:14,080 outcomes as a way to constrain the system and through those 288 00:18:14,080 --> 00:18:17,920 constraints reduce trust in a centralized party. 289 00:18:17,920 --> 00:18:18,560 Right. Like that. 290 00:18:18,560 --> 00:18:21,880 That seems to be the the essential insight, yes. 291 00:18:21,880 --> 00:18:27,000 So So maybe you know maybe you can take an example of a set 292 00:18:27,000 --> 00:18:32,920 which is like not finite, where if I I had to create a coin 293 00:18:33,840 --> 00:18:40,120 running on top of Bitcoin then how that the set of people 294 00:18:40,120 --> 00:18:44,520 owning that coin evolves is maybe massive because new users 295 00:18:44,520 --> 00:18:47,320 that nobody knows what their addresses are have to appear and 296 00:18:47,320 --> 00:18:50,240 they have to get the coin set of outcomes is infinite. 297 00:18:50,720 --> 00:18:54,960 Maybe hard to put into a DLC like format, but a bet is 298 00:18:54,960 --> 00:18:59,760 something where because the set of outcomes is finite, you can 299 00:18:59,760 --> 00:19:02,840 use that as a constraining mechanism to reduce trust. 300 00:19:03,760 --> 00:19:06,560 Yes, exactly that. That's exactly the idea. 301 00:19:06,560 --> 00:19:10,000 So maybe the paper, looking back, of course with the benefit 302 00:19:10,000 --> 00:19:13,240 of five years of hindsight, maybe the white paper was not 303 00:19:13,280 --> 00:19:17,040 aptly, you know, it was called smart contracts on Bitcoin, but 304 00:19:17,040 --> 00:19:20,080 it was actually just an if then statement on Bitcoin. 305 00:19:20,400 --> 00:19:24,520 But it's still quite powerful. It's a you know kind of a low 306 00:19:24,520 --> 00:19:28,160 level feature, but this it does get into this idea of like an on 307 00:19:28,160 --> 00:19:33,000 chain escrow or an on chain kind of lock box which is which is 308 00:19:33,000 --> 00:19:37,520 extremely powerful given the utility of Bitcoin, right. 309 00:19:37,520 --> 00:19:43,240 So in in our case where it's like your A&MA&M lock their 310 00:19:43,240 --> 00:19:50,160 funds into ADLC and there's an Oracle Olivia O and the Oracle 311 00:19:50,160 --> 00:19:53,840 is the one that's going to resolve the bet and A&M have 312 00:19:53,840 --> 00:19:57,400 already pre signed the future and outcomes that are possible 313 00:19:57,400 --> 00:20:01,760 with their funds. What is the trust assumption on 314 00:20:02,440 --> 00:20:03,840 on N? On O? 315 00:20:04,120 --> 00:20:07,760 On Olivia? Well, that that was the other 316 00:20:07,760 --> 00:20:13,080 issue in this story is Olivia has to kind of somehow magically 317 00:20:13,080 --> 00:20:16,800 know all the outcomes of any kind of bet you might or you 318 00:20:16,800 --> 00:20:20,680 have to pick an Olivia that happens to know what that you 319 00:20:20,680 --> 00:20:23,000 know outcome is. But how do you even measure an 320 00:20:23,000 --> 00:20:24,600 outcome? If I'm measuring what the 321 00:20:24,600 --> 00:20:27,440 temperature is, do I measure it? This part of the house, that 322 00:20:27,440 --> 00:20:29,720 part of the house and my outside, You know, you can have 323 00:20:29,720 --> 00:20:33,280 different real answers from different contexts of different 324 00:20:33,280 --> 00:20:36,600 perspectives. So that's where we, that's why 325 00:20:36,600 --> 00:20:40,320 when we first started looking into this, we you know we 326 00:20:40,320 --> 00:20:45,680 actually reached out the chain link and just you know they and 327 00:20:45,680 --> 00:20:48,760 you know kind of as a disclaimer, we have a close 328 00:20:48,800 --> 00:20:52,280 partnership with Chain Link. They were our first investor via 329 00:20:52,280 --> 00:20:56,160 a grant because they also got excited about this theoretical 330 00:20:56,160 --> 00:20:59,320 idea of Bitcoin Oracle's. But you don't need Chain Link to 331 00:20:59,320 --> 00:21:01,720 use the DLC there. It's a completely different 332 00:21:01,720 --> 00:21:04,800 layer, but they've been very, you know, progressive and and 333 00:21:04,800 --> 00:21:07,280 helpful. So we reached out to you know to 334 00:21:07,280 --> 00:21:10,600 chain Link and we realized well chain link strength and as the 335 00:21:10,600 --> 00:21:13,600 strength of many Oracle systems as you have a diverse set of 336 00:21:13,600 --> 00:21:17,520 parties reporting quote UN quote truth and they pick like a you 337 00:21:17,520 --> 00:21:21,560 know midpoint or some you know specific reference value and 338 00:21:21,560 --> 00:21:24,760 then that is used. And and then that kind of guided 339 00:21:24,760 --> 00:21:29,040 us to well, if this is really less, maybe less of a sports bet 340 00:21:29,040 --> 00:21:33,000 and more of AD 5 or financial tool because now you have these 341 00:21:33,000 --> 00:21:37,040 prices and so you can do things with Bitcoin that trigger based 342 00:21:37,040 --> 00:21:40,160 on certain prices. And so that kind of started 343 00:21:40,160 --> 00:21:42,840 moving us into D5. And then as we were doing that, 344 00:21:42,840 --> 00:21:45,800 I mean a bunch of things happened last year, but you 345 00:21:45,800 --> 00:21:50,240 know, one was sort of any kind of centralized or trusted party 346 00:21:50,240 --> 00:21:52,920 was, you know, not not all of them, but many of them kind of 347 00:21:52,920 --> 00:21:57,120 failed and and and you know, kind of spectacularly and losing 348 00:21:57,120 --> 00:21:59,200 a lot of money. So we felt that we're, you know, 349 00:21:59,200 --> 00:22:03,800 on the right track by enabling, you know, a decentral, the more 350 00:22:03,800 --> 00:22:08,080 decentralization we can kind of build around this DLC concept, 351 00:22:08,480 --> 00:22:10,360 you know, the more people can benefit from it. 352 00:22:10,360 --> 00:22:13,280 And that's kind of, you know, go at what's what's set us down the 353 00:22:13,280 --> 00:22:17,440 path we we have gone. So in the in this traditional 354 00:22:17,440 --> 00:22:23,400 bet example, is it is it the case that the Oracle, the Oracle 355 00:22:23,400 --> 00:22:30,200 cannot steal any of the funds because it's it's the outcome of 356 00:22:30,200 --> 00:22:33,240 all the funds going to. The Oracle isn't in the pre 357 00:22:33,240 --> 00:22:36,320 signed outcome set in the 1st place, so the Oracle cannot 358 00:22:36,320 --> 00:22:39,800 steal funds exactly. The worst the Oracle can do is 359 00:22:39,800 --> 00:22:44,600 say is tell the users well I'm never going to publish this 360 00:22:44,600 --> 00:22:48,120 nonce or this resolving information ever. 361 00:22:48,560 --> 00:22:52,920 Your funds are stuck so you'd better give me half of your 362 00:22:52,920 --> 00:22:57,360 funds to make them unstuck. Otherwise they always stay stuck 363 00:22:57,360 --> 00:23:03,640 and get 0, so it gets extort or by by. 364 00:23:03,640 --> 00:23:07,920 It's like not being live but it can't steal and that seems to be 365 00:23:07,920 --> 00:23:09,960 just model here. That, that's right. 366 00:23:09,960 --> 00:23:13,760 It's essentially like a form of smart contract risks or or 367 00:23:13,760 --> 00:23:17,000 risks. But yeah the the Oracle can 368 00:23:17,000 --> 00:23:20,840 censor the transaction which then pushed us of course in the 369 00:23:20,840 --> 00:23:24,400 direction of having multiple oracles, you know where you have 370 00:23:24,400 --> 00:23:29,880 a threshold of you know five O 7 or or whatever and and and that 371 00:23:30,120 --> 00:23:33,000 that will then reduce it. And of course, of course, the 372 00:23:33,000 --> 00:23:37,680 more Oracle's, presumably you know, getting the data from, you 373 00:23:37,680 --> 00:23:41,960 know, reliable sources you know, the the more that risk drops. 374 00:23:43,840 --> 00:23:48,960 So, so now like, OK, so in the beginning it's kind of like one 375 00:23:48,960 --> 00:23:54,960 party that's that's running the Oracle and you're now moving 376 00:23:54,960 --> 00:23:59,520 into the space of, OK, not one party but seven or nine or 11 or 377 00:23:59,600 --> 00:24:05,160 however many parties that together behave as the Oracle so 378 00:24:05,160 --> 00:24:09,960 that you can protect against this like liveness, this, this 379 00:24:09,960 --> 00:24:14,080 liveness problem. So I so that that is that is 380 00:24:14,080 --> 00:24:17,280 something that's easy to understand, but you're also 381 00:24:17,280 --> 00:24:20,640 using it to somehow bridge Bitcoin over to Ethereum, which 382 00:24:20,760 --> 00:24:23,640 does not feel any obvious then obvious jump. 383 00:24:23,640 --> 00:24:25,200 So how? How does that work? 384 00:24:25,840 --> 00:24:27,360 How does that piece work? Yes. 385 00:24:27,360 --> 00:24:30,000 So you know it. It took us a while also to 386 00:24:30,520 --> 00:24:33,920 sometimes with technology and actually this often happens in, 387 00:24:33,920 --> 00:24:35,800 you know, universities and research labs. 388 00:24:36,080 --> 00:24:39,200 You have a basic invention, but the application is quite 389 00:24:39,200 --> 00:24:41,400 unclear. So it took us also two years 390 00:24:42,080 --> 00:24:45,440 basically to to kind of go in that direction and it was a set 391 00:24:45,440 --> 00:24:49,120 of kind of aha moments collectively for our team. 392 00:24:49,120 --> 00:24:54,480 So the first aha moment was, well, if the liquidity doesn't 393 00:24:54,480 --> 00:24:58,040 exist between, you know, you and me doing this, then maybe it 394 00:24:58,040 --> 00:25:02,480 should be a human interacting with a protocol like AD 5 395 00:25:02,480 --> 00:25:05,080 protocol. A simple example of that is, 396 00:25:05,080 --> 00:25:07,960 Gee, it would be great if I could just put my Bitcoin in 397 00:25:07,960 --> 00:25:11,120 Ave. Well, maybe I could use the DLC 398 00:25:11,360 --> 00:25:14,440 to kind of enable that in in some form. 399 00:25:15,040 --> 00:25:17,640 So, so that was, you know, one one step. 400 00:25:18,160 --> 00:25:22,120 But then you know another big aha moment was, and this one 401 00:25:22,120 --> 00:25:26,800 actually happened recently for us is if you're locking in, you 402 00:25:26,800 --> 00:25:31,080 know, with the protocol, then you might want an outcome where 403 00:25:31,080 --> 00:25:33,800 there's like a quote UN quote liquidation where you know, 404 00:25:33,800 --> 00:25:36,920 there's a second outcome where all the funds go to bond. 405 00:25:37,360 --> 00:25:42,040 You might want that, but you might not want that because you 406 00:25:42,040 --> 00:25:44,920 know, in the case of for example, and I'll get into kind 407 00:25:44,920 --> 00:25:48,960 of our rapid coin product, the LCBTC, like we don't want to be 408 00:25:49,040 --> 00:25:51,760 ever in a position where we could rug the protocol, you 409 00:25:51,760 --> 00:25:53,640 know, we could RUG the Bitcoin, right. 410 00:25:53,640 --> 00:25:57,320 That would not really scale or that would not be useful. 411 00:25:57,320 --> 00:26:00,920 So, so then we realized well wait a moment we actually need 412 00:26:01,200 --> 00:26:04,800 to you know kill can a can a person lock Bitcoin with 413 00:26:04,800 --> 00:26:09,200 themselves like is that possible And it it turns out it is 414 00:26:09,200 --> 00:26:13,240 because the there was another feature of the DLC which people 415 00:26:13,240 --> 00:26:17,120 had not really focused on where there's kind of a like a 416 00:26:17,120 --> 00:26:21,640 liquidation payout address. So you can have you know Alice 417 00:26:21,640 --> 00:26:26,240 puts in and obviously this would be then a one sided BBTDLC in 418 00:26:26,240 --> 00:26:29,680 terms of a depositor. So Alice puts in one Bitcoin. 419 00:26:29,880 --> 00:26:33,600 Bob doesn't put anything because it's just a protocol and and 420 00:26:33,600 --> 00:26:35,520 there's outcome one and outcome 2. 421 00:26:35,800 --> 00:26:39,200 But in the case of outcome 2, the Bitcoin goes back to Alice 422 00:26:39,240 --> 00:26:42,280 and the so the Bitcoin goes back to Alice in both cases. 423 00:26:42,600 --> 00:26:48,000 And in that case, Bob is what we call our protocol wallet where 424 00:26:48,000 --> 00:26:51,000 basically it's just an administrator for the DLC. 425 00:26:51,640 --> 00:26:55,040 And the reason you would want an administrator, well, a couple 426 00:26:55,040 --> 00:26:57,720 reasons. But one reason is you know if 427 00:26:57,720 --> 00:27:01,120 the user like let's say the Bitcoin needs to go back to 428 00:27:01,120 --> 00:27:04,600 Alice, but either Alice or Bob need to execute on that at the 429 00:27:04,600 --> 00:27:07,840 station, we can't assume the user's going to be at their 430 00:27:07,840 --> 00:27:10,440 wallet. But the but the protocol wallet 431 00:27:10,440 --> 00:27:13,920 can just constantly execute these and just, you know, 432 00:27:14,120 --> 00:27:16,120 actually make the Bitcoin move. So. 433 00:27:16,200 --> 00:27:20,120 So now you know the user can basically lock into this kind of 434 00:27:20,120 --> 00:27:24,400 lock box, this kind of on chain escrow where it's secured by 435 00:27:24,400 --> 00:27:27,960 Bitcoin, not by another chain, not by another validator set, 436 00:27:27,960 --> 00:27:31,400 whatever, but actual just secured by the Bitcoin chain. 437 00:27:32,080 --> 00:27:35,120 And then you know you can have any kind of implementation, any 438 00:27:35,120 --> 00:27:39,480 kind of software determining you know what basically what options 439 00:27:39,480 --> 00:27:41,920 are presented to the user and how you know what governs the 440 00:27:41,960 --> 00:27:46,680 unlock and what you know what data source this Oracle kind of 441 00:27:46,680 --> 00:27:48,560 comes from. And then we also had one last 442 00:27:48,560 --> 00:27:52,320 kind of insight. There is the this thing that 443 00:27:52,320 --> 00:27:55,960 this off chain thing that publishes the attestation, it's 444 00:27:55,960 --> 00:27:59,800 actually not an Oracle if chain link or PISS is the Oracle and 445 00:27:59,800 --> 00:28:02,720 chain link. PISS sends a signal to Ethereum 446 00:28:03,000 --> 00:28:07,840 and Ethereum smart contract fires a signal or an event and 447 00:28:07,840 --> 00:28:10,280 that goes to this thing that what is this thing. 448 00:28:10,520 --> 00:28:13,360 And so we very creatively because it publishes an 449 00:28:13,360 --> 00:28:17,880 attestation, we called it an attestor which is you know which 450 00:28:17,880 --> 00:28:20,200 is very, very simple but effective. 451 00:28:20,280 --> 00:28:25,160 And so the the Attester actually gets a signal from a smart 452 00:28:25,160 --> 00:28:28,880 contract chain or smart contract and actually can check it on 453 00:28:28,880 --> 00:28:30,880 chain. That's another advantage of DFI 454 00:28:30,880 --> 00:28:34,680 we realized is you know you can actually check and and validate 455 00:28:34,680 --> 00:28:38,080 on chain before you publish the attestation. 456 00:28:38,080 --> 00:28:40,160 So it takes out all the kind of it. 457 00:28:40,160 --> 00:28:44,640 It reduces the the the you know the the issues that could go 458 00:28:44,640 --> 00:28:48,480 wrong with that Attester and and basically so then you have this 459 00:28:48,480 --> 00:28:52,800 DLC attester or attesters and then we started building you 460 00:28:52,800 --> 00:28:56,240 know kind of around that and and and it went from there and then 461 00:28:56,240 --> 00:29:00,480 that all of that led us to this idea of you know why don't we 462 00:29:00,480 --> 00:29:05,360 have a bridge or or DLC implement DLC as a way to bridge 463 00:29:05,360 --> 00:29:09,560 Bitcoin to E using the system where you're locking it with 464 00:29:09,560 --> 00:29:13,760 yourself your quote UN quote self wrapping it's a term I 465 00:29:13,760 --> 00:29:17,640 made-up but you know yourself wrapping you are the only person 466 00:29:17,640 --> 00:29:20,320 that can ever get the deposits. And so you end up with this 467 00:29:20,320 --> 00:29:24,000 decentralized kind of escrow layer on on Bitcoin where 468 00:29:24,000 --> 00:29:28,120 instead of sending the Bitcoin to somebody's deposit address or 469 00:29:28,120 --> 00:29:31,600 to a custodian or whatever to some pool you actually each 470 00:29:31,600 --> 00:29:34,280 individual deposit gets its own DLC. 471 00:29:34,560 --> 00:29:37,520 And you have all these DLCS you can see on chain, they're all 472 00:29:37,520 --> 00:29:42,640 just you know UTXOS on chain and and then you can see the all the 473 00:29:42,640 --> 00:29:45,600 all the ETH logic or the other smart contract logic on the 474 00:29:45,600 --> 00:29:48,040 other chain. And then you have this off chain 475 00:29:48,040 --> 00:29:50,040 a tester which doesn't make any decisions. 476 00:29:50,040 --> 00:29:53,680 It's just translating a smart contract signal to Bitcoin 477 00:29:53,680 --> 00:29:57,160 settlement instructions and that kind of gave us the architecture 478 00:29:57,160 --> 00:30:00,920 we have today. That sounds really cool because 479 00:30:00,920 --> 00:30:05,400 like he said, a tester, it's not a single A tester, There are 480 00:30:05,400 --> 00:30:08,280 multiple A testers, it's a multi single of a testers. 481 00:30:09,200 --> 00:30:15,000 But the A testers could not steal my Bitcoin and I am 482 00:30:15,000 --> 00:30:18,080 locking the Bitcoin on my side, and I'm just locking it by 483 00:30:18,080 --> 00:30:21,240 myself. And then I'm getting something 484 00:30:21,240 --> 00:30:27,240 on Ethereum and I can use that Bitcoin like a normal ERC 20 485 00:30:27,240 --> 00:30:31,520 token on Ethereum, yes. And then the Ethereum protocol 486 00:30:31,520 --> 00:30:35,360 emits some kind of signal when I want to bring that Bitcoin back. 487 00:30:35,920 --> 00:30:40,120 And the attestors are just translating that signal. 488 00:30:40,840 --> 00:30:43,320 So that seems to be the advertised capabilities. 489 00:30:43,320 --> 00:30:48,600 And they seem really awesome because the trust equation is 490 00:30:48,600 --> 00:30:53,160 like, OK, you are not, you are trusting X out of Y of these 491 00:30:53,160 --> 00:30:55,760 attesters to be live. That seems to be the trust 492 00:30:55,760 --> 00:30:58,520 equation. And the capability you get is 493 00:30:58,520 --> 00:31:00,680 you can migrate Bitcoin off to Ethereum. 494 00:31:00,720 --> 00:31:03,040 And I presume if you can do for Ethereum, you can do for other 495 00:31:03,040 --> 00:31:05,600 ecosystems. Exactly, exactly. 496 00:31:05,600 --> 00:31:08,760 And you can use it in the same way from any ecosystem which is 497 00:31:08,760 --> 00:31:11,760 quite quite powerful. Bitcoin L Twos as well and 498 00:31:11,760 --> 00:31:13,520 anywhere. Right. 499 00:31:13,520 --> 00:31:20,000 So that feels very attractive. The mechanism behind it, I I 500 00:31:20,000 --> 00:31:23,200 don't understand it. So maybe maybe like let's say 501 00:31:23,200 --> 00:31:27,920 unpack that, let's unpack that a little slowly, right. 502 00:31:27,920 --> 00:31:35,360 So maybe the maybe the first question is kind of for a bridge 503 00:31:35,360 --> 00:31:40,040 to be effective. If I have Bitcoin and I send 504 00:31:40,040 --> 00:31:43,640 some Bitcoin to whatever thing on this side, so DLC, let's say 505 00:31:43,640 --> 00:31:46,600 one Bitcoin there and it goes on to Ethereum. 506 00:31:47,640 --> 00:31:50,760 If you assume I'm going to do useful things on Ethereum, then 507 00:31:51,320 --> 00:31:56,720 it will always be the case that that Bitcoin could remain half 508 00:31:56,720 --> 00:32:00,920 with me and half of it might end up with something else, some 509 00:32:00,920 --> 00:32:03,680 other party. It could be protocol like 510 00:32:04,520 --> 00:32:08,960 compound or it could be it could maybe I made a payment on his 511 00:32:08,960 --> 00:32:15,200 helium or whatever. So if that's going to happen but 512 00:32:15,200 --> 00:32:19,480 on Bitcoin only, I can someday recover the Bitcoin. 513 00:32:20,640 --> 00:32:24,120 How can you have a pungible token on the Ethereum side when 514 00:32:24,400 --> 00:32:27,480 I am the only party that could recover it on the on the Bitcoin 515 00:32:27,480 --> 00:32:29,640 side? Yep. 516 00:32:29,720 --> 00:32:33,320 Yep. So, So that's a great, that's a 517 00:32:33,320 --> 00:32:36,200 great point that we when we started. 518 00:32:36,240 --> 00:32:39,440 There's also another related challenge which is like which 519 00:32:39,440 --> 00:32:42,240 EAF protocol wants to manage a Bitcoin address. 520 00:32:43,080 --> 00:32:46,480 And so probably none of them are very few, not none, but very 521 00:32:46,480 --> 00:32:48,960 few. You know, so we came to, you 522 00:32:48,960 --> 00:32:51,520 know, we talked to partners like Maple and and so on. 523 00:32:51,520 --> 00:32:54,640 And it's like hey, you could have this and you could have 524 00:32:54,760 --> 00:32:57,160 even in the case of a liquidation and you could have 525 00:32:57,160 --> 00:33:00,240 this outcome to liquidation go directly to you. 526 00:33:00,600 --> 00:33:03,840 But then you need, you know a place to manage it and you have 527 00:33:03,840 --> 00:33:06,680 to do all this other infrastructure and regulatory, 528 00:33:06,760 --> 00:33:09,320 you know, who knows what other implications that would have. 529 00:33:09,760 --> 00:33:12,000 And it wasn't like a really good pitch. 530 00:33:12,000 --> 00:33:15,320 People are not excited about it. And that's when we kind of that 531 00:33:15,320 --> 00:33:19,000 kind of led us to a simpler mechanism where you're just 532 00:33:19,000 --> 00:33:21,960 locking with yourself. You're literally just you're the 533 00:33:21,960 --> 00:33:27,720 you lock your Bitcoin and the fact that it is locked on on in 534 00:33:27,720 --> 00:33:31,000 this DLC which also kind of comes in with the built in like 535 00:33:31,000 --> 00:33:34,520 proof of reserve because you can see on chain is it locked you 536 00:33:34,520 --> 00:33:37,960 know open, is it locked, is it funded like you can see is it 537 00:33:37,960 --> 00:33:41,840 closed you can see all that on chain on Bitcoin at any time. 538 00:33:41,840 --> 00:33:46,280 So, so basically it's just this like self locking mechanism 539 00:33:47,040 --> 00:33:51,160 which which is like a little bit of a, you know, you know, kind 540 00:33:51,160 --> 00:33:55,120 of twisted idea to to get kind of wrap your head around because 541 00:33:55,280 --> 00:33:58,720 like we're all familiar with escrow providers in finance. 542 00:33:58,720 --> 00:34:01,440 When you're buying a house, you put some money in escrow and if 543 00:34:01,440 --> 00:34:03,800 the deal goes through, it goes through, if not, you get it 544 00:34:03,800 --> 00:34:05,040 back. That's familiar. 545 00:34:05,320 --> 00:34:09,920 But here the escrow provider is actually the chain itself, the 546 00:34:09,920 --> 00:34:12,159 Bitcoin chain, which is kind of cool. 547 00:34:12,840 --> 00:34:16,520 And I neglected to mention that all of this was like support for 548 00:34:16,520 --> 00:34:19,280 this stuff was really added, a lot of it or some of it was 549 00:34:19,280 --> 00:34:22,480 added in Taproot like Schnorr and and and something called 550 00:34:22,480 --> 00:34:24,840 PTLC. So Taproad was also kind of 551 00:34:24,840 --> 00:34:28,360 needed to make this, you know, viable or feasible. 552 00:34:28,360 --> 00:34:30,679 But but basically, yeah, that that's it. 553 00:34:30,679 --> 00:34:37,120 So basically in DLCBTC you lock with yourself and the presence 554 00:34:37,120 --> 00:34:41,040 of this, the fact that it's locked, let's the bridge mint 555 00:34:41,040 --> 00:34:45,320 DLCBTC which you can use and then when you're, you know, done 556 00:34:45,320 --> 00:34:50,080 using it, you can burn it and the burning action unlocks the 557 00:34:50,080 --> 00:34:51,920 Bitcoin and sends it back to you. 558 00:34:53,080 --> 00:34:57,160 And you know, in the case of a hack, if the hackers hack the 559 00:34:57,160 --> 00:35:01,160 attestors and they're publishing outcomes then that you just get 560 00:35:01,160 --> 00:35:05,000 your Bitcoin back earlier like it tanks the DLCBTC token, which 561 00:35:05,000 --> 00:35:06,840 is not great. So we don't want hacks. 562 00:35:07,200 --> 00:35:11,520 You know, if if like the hacker could kind of the the attestors 563 00:35:11,520 --> 00:35:12,720 don't know who these parties are. 564 00:35:12,720 --> 00:35:15,600 So they could kind of randomly unlock parts of the reserve 565 00:35:15,680 --> 00:35:18,280 behind the LCBTC, which is not good. 566 00:35:18,280 --> 00:35:22,920 So security's still critical but in the case of an attack you get 567 00:35:22,920 --> 00:35:27,800 your Bitcoin back and and and that's it and and so you're 568 00:35:27,800 --> 00:35:31,640 pretty much, you know you're not left holding the back so to 569 00:35:31,640 --> 00:35:36,320 speak or you're not left. Neither us nor the you know, nor 570 00:35:36,320 --> 00:35:39,520 another party could like drain the pool because there is no 571 00:35:39,520 --> 00:35:43,960 pool and and that's kind of the value out of, it's a very simple 572 00:35:43,960 --> 00:35:47,160 application of DLC. There's no the 2nd outcome 573 00:35:47,160 --> 00:35:50,440 basically doesn't really matter. It's just the locking mechanism 574 00:35:50,440 --> 00:35:55,560 secured by these attasters. So maybe one way of thinking 575 00:35:55,560 --> 00:35:59,080 about it is that, so in the beginning we are imagining this 576 00:35:59,080 --> 00:36:02,160 as like Alice that's kind of locking Bitcoin on one side and 577 00:36:02,160 --> 00:36:05,840 then printing an ERC token on the other side. 578 00:36:06,760 --> 00:36:10,800 And Alice is kind of like a retain user, if you imagine 579 00:36:10,920 --> 00:36:14,320 Alice as not being a retail user, but rather as a market 580 00:36:14,320 --> 00:36:17,600 maker of some kind, right, That this is a, this is an 581 00:36:17,600 --> 00:36:19,720 individual. They would like, I don't know, 582 00:36:19,760 --> 00:36:22,200 thousands of BTC. It's not an individual, it's a 583 00:36:22,200 --> 00:36:26,240 corporation with thousands of BTC in its treasury, like 584 00:36:26,240 --> 00:36:28,920 Michael Saylor's company for example. 585 00:36:29,440 --> 00:36:32,320 Yeah, Michael, we're we'd love to talk to you if you're 586 00:36:32,320 --> 00:36:38,400 listening. And so when they print Ethereum 587 00:36:38,400 --> 00:36:45,360 on the other side, they basically they could sort of 588 00:36:45,640 --> 00:36:49,600 create kind of like a fungible Bitcoin coin on on the Ethereum 589 00:36:49,600 --> 00:36:57,960 side and they can basically have that coined transfer and and 590 00:36:57,960 --> 00:37:01,600 they are there to always make the other other side. 591 00:37:02,880 --> 00:37:06,920 So if the coin ends up in the hands of a different person, and 592 00:37:06,920 --> 00:37:10,040 that different person wants that coin back into Bitcoin, they 593 00:37:10,040 --> 00:37:14,840 could always go to this corporation and kind of get the 594 00:37:14,840 --> 00:37:17,600 Bitcoin back, but then it becomes a trusted set up. 595 00:37:18,120 --> 00:37:21,520 Exactly, exactly. So no, but you're exactly right. 596 00:37:21,520 --> 00:37:27,200 So the, the, the, the depositors in this are like, if you're 597 00:37:27,200 --> 00:37:31,360 familiar with WBTC merchants, they're like DLCBTC merchants, 598 00:37:31,360 --> 00:37:34,880 they are KYC. That's also important for for 599 00:37:34,880 --> 00:37:37,760 regulatory reasons. They're like you know companies 600 00:37:37,760 --> 00:37:42,000 institutions that are exchanges, market makers, Bitcoin 601 00:37:42,000 --> 00:37:45,240 depositors could be like Bitcoin miners, companies that hold 602 00:37:45,240 --> 00:37:47,800 Bitcoin. You know asset managers who hold 603 00:37:47,800 --> 00:37:50,640 clients Bitcoin like it. It can be any of those you know 604 00:37:50,640 --> 00:37:54,480 sources but it's important that you know they they set up these 605 00:37:54,560 --> 00:38:00,120 you know DLCS and and because there's sort of an an issue with 606 00:38:00,120 --> 00:38:04,040 retail because it's kind of an unusual maybe UX people are used 607 00:38:04,040 --> 00:38:07,320 to like a permissionless like peg in peg out, send the 608 00:38:07,320 --> 00:38:10,920 Bitcoin, you know you send in one you get you know half out or 609 00:38:10,920 --> 00:38:13,440 whatever. This is not that you know this 610 00:38:13,440 --> 00:38:15,880 is clunkier. So you can have something we 611 00:38:15,880 --> 00:38:19,400 call like quote UN quote DLC abandonment where you know 612 00:38:19,400 --> 00:38:22,840 retail like or somebody pegs in maybe they lose their private 613 00:38:22,840 --> 00:38:25,280 key. They've abandoned that that that 614 00:38:25,280 --> 00:38:28,640 is not not actually part of the reserve at that point that is 615 00:38:28,640 --> 00:38:32,280 like fake you know kind of liquidity and if the the token 616 00:38:32,280 --> 00:38:35,000 drops and that could be an issue if there's a lot of that. 617 00:38:35,280 --> 00:38:39,360 So so the depositors end up being merchants and and then 618 00:38:39,360 --> 00:38:44,680 retail gets you know, can use DLCBTC as a safer you know 619 00:38:44,680 --> 00:38:47,000 wrapped Bitcoin than other alternatives. 620 00:38:47,400 --> 00:38:50,600 But then they should go to the, you know they need to go to a 621 00:38:50,600 --> 00:38:54,680 centralized exchange to redeem it which is exactly what I do 622 00:38:54,680 --> 00:38:58,760 with WBTC, you know when I use it so and and other forms. 623 00:38:58,760 --> 00:39:03,080 So basically, yeah, that that's kind of that ends up being the 624 00:39:03,160 --> 00:39:06,360 the structure, the logical conclusion of this. 625 00:39:07,160 --> 00:39:08,920 Yeah. OK, so I actually know how to 626 00:39:08,920 --> 00:39:14,000 express the the limitation of the DNC link protocol and and 627 00:39:14,000 --> 00:39:18,680 express it. So the issue here is because if 628 00:39:18,680 --> 00:39:22,840 you imagine party A depositing something on Bitcoin and getting 629 00:39:22,880 --> 00:39:28,600 a DLC link Bitcoin on the other side, and then the only party 630 00:39:28,600 --> 00:39:31,280 that can go back is party A itself. 631 00:39:32,120 --> 00:39:35,200 And similarly, if you imagine that interaction for party B, 632 00:39:35,920 --> 00:39:41,400 there are two two types of DLC link Bitcoin on the other side, 633 00:39:41,400 --> 00:39:43,800 one from party A and one from party B. 634 00:39:44,640 --> 00:39:48,120 And those two bitcoins are not fully fungible across each other 635 00:39:48,120 --> 00:39:54,840 because their origination DNC contracts have rights assigned 636 00:39:54,840 --> 00:39:58,760 to different parties, and those different parties have different 637 00:39:58,760 --> 00:40:02,520 liveness risks. The two Bitcoin on the other 638 00:40:02,520 --> 00:40:06,800 sides are not fungible with each other and ergo they cannot be 639 00:40:06,800 --> 00:40:12,960 represented as the same ERC token and that is a limitation 640 00:40:12,960 --> 00:40:14,640 of. Of the protocol. 641 00:40:14,640 --> 00:40:19,120 But that limitation is coming in, ultimately from the fact 642 00:40:19,120 --> 00:40:21,440 that Bitcoin doesn't have a smart contracting system. 643 00:40:22,200 --> 00:40:25,160 Yeah, exactly. It's that's exactly right. 644 00:40:25,160 --> 00:40:28,800 And actually not to further confuse the situation, but you 645 00:40:28,800 --> 00:40:32,400 can actually, when you log Bitcoin in the DLC, you can also 646 00:40:32,400 --> 00:40:36,600 represent it as an NFT. It's really it's really a unique 647 00:40:37,040 --> 00:40:41,120 you know locking and the NFT can have the address of the UTXO 648 00:40:41,120 --> 00:40:44,400 where it's locked. So but but the issue we ran into 649 00:40:44,400 --> 00:40:47,600 there of course is that you know D5 protocols aren't really set 650 00:40:47,600 --> 00:40:53,440 up for NFT 5 and and even today when people think of NFTS 90 651 00:40:53,440 --> 00:40:56,520 some percent of the time they're thinking of you know pictures 652 00:40:56,520 --> 00:40:59,280 and stuff and they're not yet thinking of it as a financial 653 00:40:59,280 --> 00:41:01,280 asset. But I say that because 654 00:41:01,280 --> 00:41:04,960 developers who want to implement DLCS can implement them as NFTS 655 00:41:05,240 --> 00:41:08,240 and you can also you know do different things with ordinals 656 00:41:08,240 --> 00:41:09,960 and then have an ordinal backed NFT. 657 00:41:09,960 --> 00:41:12,240 But that's like, you know, nobody really. 658 00:41:12,240 --> 00:41:14,720 It's a very, you know, it's like another mindwatch. 659 00:41:14,800 --> 00:41:17,360 So, So what we found was in order to make this 660 00:41:17,360 --> 00:41:20,560 interoperable, it would need to be an ERC 20. 661 00:41:20,600 --> 00:41:23,800 But it wouldn't have that limitation that you, you know, 662 00:41:23,800 --> 00:41:28,240 you described where if Alice, you know, refuses to peg out, 663 00:41:28,520 --> 00:41:31,480 you know she doesn't have to. But then the liquidity is less 664 00:41:31,800 --> 00:41:36,320 or if Alice cannot peg out maybe the, you know, because of just 665 00:41:36,360 --> 00:41:40,400 not lose on the private keys. A simple example or if Alice, 666 00:41:40,400 --> 00:41:45,000 you know, pegs in and then you know changes like swaps, the S, 667 00:41:45,040 --> 00:41:48,880 A/B, TC for USDT and then the price shoots up and now they 668 00:41:48,880 --> 00:41:52,160 have to spend a lot more to like peg out that they might not want 669 00:41:52,160 --> 00:41:55,760 to peg out because financially or economically So it it's kind 670 00:41:55,760 --> 00:41:59,120 of creates that complexity. So the solution it can only be 671 00:41:59,120 --> 00:42:02,880 just institutions where they have you know treasury 672 00:42:02,880 --> 00:42:06,840 management strategies and they have you know professional kind 673 00:42:06,840 --> 00:42:10,880 of risk managers involved. But for that audience it's it's 674 00:42:10,880 --> 00:42:15,240 very powerful because now you have a way where you where it 675 00:42:15,280 --> 00:42:19,440 the counterparty risk is not, I cannot say it's zero, but it's 676 00:42:19,440 --> 00:42:23,840 reduced to a significant extent, it's trust minimized to a 677 00:42:23,840 --> 00:42:28,040 significant extent over other options and and that's very 678 00:42:28,040 --> 00:42:30,760 powerful. You know in the practical world 679 00:42:30,760 --> 00:42:33,600 we live in where there's all this you know Bitcoin that 680 00:42:33,600 --> 00:42:37,040 already exists and and or or all this liquidity and then more 681 00:42:37,040 --> 00:42:41,880 about coming in it's you know it it it creates a powerful 682 00:42:42,360 --> 00:42:46,600 instrument or way for then that kind of takes us down the path 683 00:42:46,600 --> 00:42:50,640 of you know we can provide you know the user could use 684 00:42:50,640 --> 00:42:54,120 different financial instruments on you know EVM and options and 685 00:42:54,120 --> 00:42:57,240 hedging and things like that treasury management things you 686 00:42:57,240 --> 00:43:00,480 know it through this mechanism with the you know and and 687 00:43:00,480 --> 00:43:04,320 there's no there's there's physically no way the Bitcoin 688 00:43:04,320 --> 00:43:07,440 can be stolen that's sort of the but if that's just the one 689 00:43:07,440 --> 00:43:10,880 headline we gain with this then then that's you know that's 690 00:43:10,880 --> 00:43:14,400 that's a big deal. So maybe like the way the 691 00:43:14,400 --> 00:43:18,640 picture the DLC protocol is when you when you imagine a party 692 00:43:18,640 --> 00:43:22,480 like I don't know Coinbase could be one but it could also be like 693 00:43:22,480 --> 00:43:26,080 Bitcoin Swiss in Switzerland or Sebel Bank on Switzerland or in 694 00:43:26,080 --> 00:43:30,800 the future many like these companies that are building you 695 00:43:30,800 --> 00:43:33,480 know market makers or things like that. 696 00:43:34,640 --> 00:43:39,320 So these companies can essentially take their Bitcoin 697 00:43:39,320 --> 00:43:44,480 from the Bitcoin network bridge them over to Ethereal and this 698 00:43:44,680 --> 00:43:48,120 bridging process is quite trustless. 699 00:43:48,120 --> 00:43:53,120 They need to rely on the liveness of these additors, but 700 00:43:53,800 --> 00:43:57,680 they they only need to rely that on on a subset will remain live. 701 00:43:59,040 --> 00:44:02,640 And so with with very low trust they can bridge them over to 702 00:44:02,640 --> 00:44:05,880 Ethereal. And then these parties could be 703 00:44:05,880 --> 00:44:12,840 issuing fully fungible Bitcoin ERC 20s on on on Ethereal that 704 00:44:12,840 --> 00:44:19,280 in the end finally retail users would likely use to basically do 705 00:44:19,280 --> 00:44:21,320 anything they want to do in in D5. 706 00:44:21,760 --> 00:44:26,960 That is kind of like the the end goal that your protocol could 707 00:44:26,960 --> 00:44:29,040 brings. Exactly, exactly. 708 00:44:29,040 --> 00:44:34,040 And and the the requirements for using this DLCBTC bridge can be 709 00:44:34,040 --> 00:44:38,280 kind of more simpler or more easily accessible. 710 00:44:38,560 --> 00:44:41,400 You know, we just have to qualify this an institution. 711 00:44:41,600 --> 00:44:43,920 They have a way of safeguarding their private keys, you know, 712 00:44:43,920 --> 00:44:48,400 kind of standard stuff and and and then they can, you know, and 713 00:44:48,400 --> 00:44:51,360 obviously with centralized exchanges, The good thing about 714 00:44:51,360 --> 00:44:54,360 Bitcoin with exchanges is there's a lot of it already. 715 00:44:54,760 --> 00:44:57,480 So they already have large amounts of Bitcoin. 716 00:44:57,480 --> 00:45:00,840 So it's not like listing a new, it is listing a new token. 717 00:45:01,000 --> 00:45:04,280 It's a synthetic token. But but it's a it's an easier 718 00:45:04,280 --> 00:45:08,480 one from a lot of standpoint. And then, yeah, retail can then 719 00:45:08,480 --> 00:45:11,600 use it. You know, hedge funds, you know, 720 00:45:11,600 --> 00:45:14,520 can trade against it, whatever. You know, it can be used in 721 00:45:14,520 --> 00:45:18,160 finance in different ways, but but you just know that the 722 00:45:18,160 --> 00:45:21,800 underlying security model is a decentralized security model and 723 00:45:21,800 --> 00:45:25,280 not centralized. And so there's less of that kind 724 00:45:25,280 --> 00:45:28,360 of counterparty risk. And then, yeah, you still need 725 00:45:28,360 --> 00:45:30,680 like the exchanges and stuff to participate. 726 00:45:31,000 --> 00:45:35,480 I would probably say that that just is kind of a endemic to the 727 00:45:35,480 --> 00:45:39,120 financial system overall. Like if, you know, if if we are 728 00:45:39,120 --> 00:45:43,760 on one exchange and they refuse to redeem, you know, maybe we 729 00:45:43,760 --> 00:45:46,720 should have more exchanges, You know, we can kind of work with 730 00:45:46,720 --> 00:45:48,080 that. But that with any kind of 731 00:45:48,080 --> 00:45:51,360 financial instrument, you know at that point it's like an 732 00:45:51,360 --> 00:45:54,920 economic system and there are the good news is there are a lot 733 00:45:54,920 --> 00:45:58,000 of economic you know systems like that that we can you know 734 00:45:58,200 --> 00:46:02,240 leverage and risk management processes and even we can look 735 00:46:02,240 --> 00:46:03,920 at insurance and things like that. 736 00:46:05,280 --> 00:46:07,320 Right. So presumably it should be 737 00:46:07,320 --> 00:46:12,720 possible to for kind of this financial institution that's 738 00:46:12,720 --> 00:46:17,760 that's doing this, this kind of bridging to have a system where 739 00:46:19,080 --> 00:46:22,600 they bridge from Bitcoin onto Ethereum and it lands directly 740 00:46:22,600 --> 00:46:26,320 in some kind of uniswap pool against USDC. 741 00:46:26,400 --> 00:46:31,560 So as a retail user I could deposit USDC into the pool and 742 00:46:31,560 --> 00:46:36,880 get kind of BTC, that institutional BTC or directly 743 00:46:36,880 --> 00:46:39,200 into a transaction and then I can do things with that. 744 00:46:39,360 --> 00:46:43,080 So BTC. So kind of like that that flow 745 00:46:43,360 --> 00:46:46,680 that hand over to the user is kind of like made really easy. 746 00:46:48,360 --> 00:46:54,360 But the one thing that does that seems pertinent here is do you 747 00:46:54,360 --> 00:46:58,800 sense that there is like there is like an argument here that 748 00:46:58,960 --> 00:47:01,560 you have one blockchain Bitcoin and then you have other 749 00:47:01,560 --> 00:47:06,480 blockchain bit Ethereum. And if a professional company is 750 00:47:07,360 --> 00:47:12,000 moving stuff from this chain to that chain that they are a money 751 00:47:12,000 --> 00:47:14,440 transmitter. And if they are a money 752 00:47:14,440 --> 00:47:18,400 transmitter then they are subject to various forms of 753 00:47:18,560 --> 00:47:21,640 regulation in the in the United States and one of which is to 754 00:47:21,640 --> 00:47:23,520 actually get licenses in 50 states. 755 00:47:24,240 --> 00:47:28,720 And that being a difficult part of your protocol getting 756 00:47:28,720 --> 00:47:31,920 traction? It's a great question and we 757 00:47:31,920 --> 00:47:36,560 worried about this a lot earlier this year until we realized that 758 00:47:36,880 --> 00:47:39,320 you know innovation. I mentioned around that the 759 00:47:39,920 --> 00:47:44,560 payout address of this, like all the payout addresses basically 760 00:47:44,560 --> 00:47:48,600 can be set to the depositor. So if there's no scenario in 761 00:47:48,600 --> 00:47:52,880 which we can ever receive funds and the, you know the funds are 762 00:47:52,880 --> 00:47:56,520 all directed by immutable smart contracts running on various 763 00:47:56,520 --> 00:48:00,680 block chains. And we also mean the, the, I 764 00:48:00,680 --> 00:48:05,240 think the, the with any kind of of course, you know crypto or 765 00:48:05,240 --> 00:48:06,920 financial protocol, there's some risk. 766 00:48:07,000 --> 00:48:10,520 You know this is a synthetic asset, it has risks, but the 767 00:48:10,680 --> 00:48:13,600 because the risk profile is really the attester. 768 00:48:14,200 --> 00:48:17,320 So you know there isn't anything really on the Bitcoin side that 769 00:48:17,320 --> 00:48:19,560 would constitute money transmission. 770 00:48:19,920 --> 00:48:24,480 And then the Attester is just, you know, running software we 771 00:48:24,480 --> 00:48:28,240 made to execute instructions it gets from a protocol that the 772 00:48:28,240 --> 00:48:32,760 user has chosen to trust. And so the user has self wrapped 773 00:48:32,760 --> 00:48:37,040 and chosen the protocol and that protocol is directing, you know, 774 00:48:37,040 --> 00:48:40,720 our node operator partners, you know, the nodes running there to 775 00:48:40,720 --> 00:48:43,880 kind of fire these instructions. We are completely just a 776 00:48:43,880 --> 00:48:47,000 software you know, provider in that definition. 777 00:48:47,000 --> 00:48:51,400 There's, you know, I, I don't, I'm not a liar, so I can't say 778 00:48:51,400 --> 00:48:55,320 0, but there's near 0 or like maybe on the list of, like on 779 00:48:55,320 --> 00:48:58,800 the crypto hit list, we're at dead bottom, most likely. 780 00:49:00,120 --> 00:49:02,120 So. So that seems, you know, so then 781 00:49:02,120 --> 00:49:04,560 I can sleep, you know, while at night, 'cause I'm in, I'm in New 782 00:49:04,560 --> 00:49:05,680 York. And we take, you know, 783 00:49:05,680 --> 00:49:08,920 regulation seriously, especially because our, you know, our 784 00:49:08,920 --> 00:49:12,760 target market, our institutional Bitcoin depositors, of course. 785 00:49:12,920 --> 00:49:16,840 So we are reaching out to the CFTC to you know kind of have 786 00:49:16,840 --> 00:49:19,440 conversations and get their initial feedback that kind of 787 00:49:19,440 --> 00:49:21,560 thing. But on the other hand you know 788 00:49:21,560 --> 00:49:24,880 we kind of even just looking at chain link, I believe chain link 789 00:49:24,880 --> 00:49:30,800 as the financial Oracle provider is not subject to CFTC or ICC 790 00:49:30,800 --> 00:49:33,000 you know regulation for that service. 791 00:49:33,000 --> 00:49:37,200 So our tester which doesn't even do that much probably is is 792 00:49:37,200 --> 00:49:40,560 quite safe but but we are you know proactively there could be 793 00:49:40,560 --> 00:49:42,640 things we don't know as as engineers. 794 00:49:42,640 --> 00:49:44,520 So we are reaching out to the CFTC. 795 00:49:45,840 --> 00:49:48,240 Cool. So let's talk about kind of the, 796 00:49:49,400 --> 00:49:51,440 the environment around this technology. 797 00:49:51,440 --> 00:49:56,840 What does your company look like and how is it financed? 798 00:49:56,840 --> 00:50:01,200 And yeah, and how are you developing this, this protocol? 799 00:50:02,040 --> 00:50:05,160 Yeah, Yeah. So we you know I guess I would 800 00:50:05,160 --> 00:50:09,400 characterize our company as we have two, two focus areas and we 801 00:50:09,400 --> 00:50:13,680 have had this from from day one. One is the commercial business 802 00:50:13,680 --> 00:50:18,360 where we are you know selling this, this we're pitching the 803 00:50:18,360 --> 00:50:22,240 idea of you know Bitcoin holders, institutional Bitcoin 804 00:50:22,240 --> 00:50:26,240 holders gaining yield or or buying you know financial, you 805 00:50:26,240 --> 00:50:29,960 know derivatives options, hedging products or or taking 806 00:50:29,960 --> 00:50:31,960 loans on their Bitcoin in a safer way. 807 00:50:31,960 --> 00:50:34,720 And we're you know we're presenting that you know we're 808 00:50:34,720 --> 00:50:37,680 presenting the options. Obviously we're not a broker 809 00:50:37,680 --> 00:50:40,880 dealer so we're not like doing loans and stuff but but we can 810 00:50:40,880 --> 00:50:45,560 just showed that DLCBTC gets them a step closer to working 811 00:50:45,560 --> 00:50:48,840 with these protocols they want to work with in a safer way. 812 00:50:49,000 --> 00:50:52,880 So so that's the commercial side and that you know we we also 813 00:50:52,880 --> 00:50:56,640 take a mint, you know fees on mint and burn so when people you 814 00:50:56,640 --> 00:50:59,680 know peg in or peg out we take a fee in Bitcoin. 815 00:50:59,920 --> 00:51:04,080 So that's you know that's our business model and then the we 816 00:51:04,600 --> 00:51:08,080 don't have the community side where we just support the DLC 817 00:51:08,080 --> 00:51:11,840 community kind of honoring short bits and and all the stuff that 818 00:51:11,840 --> 00:51:14,400 they did to set it up and all the other participants in the 819 00:51:14,400 --> 00:51:17,360 DLC community. Right now it's Atomic Finance 820 00:51:17,360 --> 00:51:20,240 10101 Lava. There's like a few of these crew 821 00:51:20,440 --> 00:51:24,160 that have been around for years Tebow Crypto Garage like the the 822 00:51:24,280 --> 00:51:26,840 and they've been doing just working on this and and so we 823 00:51:26,840 --> 00:51:29,320 want to get more people building on DLCS. 824 00:51:29,400 --> 00:51:32,800 We want to get more chains obviously you know on the on the 825 00:51:32,800 --> 00:51:36,200 community side I want to focus on every, every chain. 826 00:51:36,760 --> 00:51:41,960 Bitcoin L, twos you know can use this to enhance their their peg 827 00:51:41,960 --> 00:51:44,000 in and peg out into their ecosystem. 828 00:51:44,000 --> 00:51:48,520 So we partner with them pretty much anyone you know ordinals, 829 00:51:49,080 --> 00:51:53,160 you know Bruins BRC 20s, you know whatever you want to might 830 00:51:53,160 --> 00:51:56,560 want to lock into DLC, you know to wrap it to get a 831 00:51:56,560 --> 00:51:59,720 representation on another chain so they can do more advanced 832 00:51:59,720 --> 00:52:04,040 stuff like auctions or lending. You know, we want to support all 833 00:52:04,040 --> 00:52:06,880 of that. There's also some work that's 834 00:52:06,880 --> 00:52:09,640 been done on DLCS on Lightning, so it could have taproot acid. 835 00:52:09,640 --> 00:52:15,320 So, so we're just kind of a you know, a just a general, you know 836 00:52:15,320 --> 00:52:18,600 advocate of DLCS there. And then we can also leverage 837 00:52:18,880 --> 00:52:21,600 the infrastructure we've developed for to support the 838 00:52:21,600 --> 00:52:25,080 commercial side and make that available for developers that 839 00:52:25,080 --> 00:52:27,800 obviously a highly subsidized cost. 840 00:52:28,480 --> 00:52:31,160 So you know you can access our tester network. 841 00:52:31,400 --> 00:52:34,640 There's there's other things that we built too like these the 842 00:52:34,640 --> 00:52:38,840 CE TS and the original design they were just stored in the 843 00:52:38,920 --> 00:52:42,240 Alice and Bob's wallets. So we have you know other 844 00:52:42,240 --> 00:52:46,160 storage to provide redundancy so the CE TS don't get lost. 845 00:52:46,800 --> 00:52:49,480 You know, Bitcoin wallet integrations is actually 846 00:52:49,480 --> 00:52:54,240 probably most of our, you know, work is in order to actually do 847 00:52:54,240 --> 00:52:57,240 this DLC. The Bitcoin wallet you can use 848 00:52:57,240 --> 00:53:00,520 any, you know, ERC 20 wallet doesn't matter, just it's an ERC 849 00:53:00,520 --> 00:53:03,880 20, it's fine. But the Bitcoin wallet has to 850 00:53:03,880 --> 00:53:08,080 have a feature, has to have a capability to to lock this DLC, 851 00:53:08,080 --> 00:53:10,840 to actually create the DLC and do these signatures that 852 00:53:10,840 --> 00:53:13,080 requires something called adapter signatures. 853 00:53:13,480 --> 00:53:19,840 So anyway we build, you know DLC support using basically all open 854 00:53:19,840 --> 00:53:22,840 source stuff and stuff that we developed to to make it kind of 855 00:53:22,840 --> 00:53:25,120 easier to to build in. But we have sort of like a 856 00:53:25,120 --> 00:53:28,480 wallet SDK if you will for for plugging in. 857 00:53:28,480 --> 00:53:31,800 So we have plugged that into leather wallet which used to be 858 00:53:31,800 --> 00:53:36,280 called Hero and X Verse and now we are hoping to talk to you 859 00:53:36,280 --> 00:53:40,600 know, Ledger and OK X Wallet and so on to to just have kind of 860 00:53:40,600 --> 00:53:44,840 widespread adoption of this DLC signing capability. 861 00:53:45,040 --> 00:53:48,240 So that's also you know big focus that then benefits 862 00:53:48,240 --> 00:53:50,880 everyone who who wants to you know use DLCS. 863 00:53:51,920 --> 00:53:54,760 So I think we made some good progress with those two wallets 864 00:53:54,960 --> 00:53:59,480 over 2 / 200,000 people use either leather or expers. 865 00:53:59,720 --> 00:54:02,840 So that's a good start. And then obviously once for our 866 00:54:02,840 --> 00:54:05,800 customer base, once we're at Ledger and Trezler and any kind 867 00:54:05,800 --> 00:54:09,920 of hardware wallet then you know then then then there's 868 00:54:09,920 --> 00:54:13,000 institutions can can create DLCS from there too. 869 00:54:13,160 --> 00:54:15,600 So that's a big goal of ours in the next few months. 870 00:54:16,960 --> 00:54:20,960 So what's the current status of the protocol and the? 871 00:54:22,120 --> 00:54:25,400 So let's let's start with the protocol first, the the Addester 872 00:54:25,400 --> 00:54:29,440 network and the the code that you need on both sides, the TDM 873 00:54:29,440 --> 00:54:31,720 side and the Bitcoin side. What's Seriously? 874 00:54:32,120 --> 00:54:34,920 Yep, the code it so we're live on test net. 875 00:54:35,160 --> 00:54:40,320 Last Saturday actually, we demoed the DLCBTC bridge to ABCD 876 00:54:40,320 --> 00:54:43,000 Capital on investors and OPX Ventures. 877 00:54:43,000 --> 00:54:47,440 They had a Bitcoin hackathon and so we just I just yesterday 878 00:54:47,760 --> 00:54:51,280 posted the the test net demo on our YouTube channel. 879 00:54:51,280 --> 00:54:56,880 So it's the first time it was shown publicly and the second 880 00:54:56,880 --> 00:54:59,120 time I had seen it. So anyway we've got that in test 881 00:54:59,120 --> 00:55:04,320 net and then in SO for the Attesta network we've got a 882 00:55:04,320 --> 00:55:10,520 couple of verbal commits from the Republic and all nodes and 883 00:55:10,520 --> 00:55:13,120 this week through through you I met Chorus 1. 884 00:55:13,120 --> 00:55:15,880 So we would love to have just top tier attasters. 885 00:55:16,160 --> 00:55:19,600 We have been when we launched we're just going to have six 886 00:55:19,600 --> 00:55:24,360 attasters and us as the 7th, so you know six individual 887 00:55:24,360 --> 00:55:28,120 attestation or certain node operator companies and the main 888 00:55:28,120 --> 00:55:31,440 job of the Attester is just to safeguard the private key that's 889 00:55:31,440 --> 00:55:33,640 that's the most important thing. So. 890 00:55:33,800 --> 00:55:36,600 So that's why we are kind of, you know, reducing risk by 891 00:55:36,600 --> 00:55:41,480 having six different ones. And obviously for some degree of 892 00:55:41,480 --> 00:55:44,880 censorship resistance in the future, we might have a token 893 00:55:44,880 --> 00:55:47,760 that lets anyone run in a tester and stake the token and that 894 00:55:47,760 --> 00:55:51,600 would be a a broader set of decentralization we're 895 00:55:51,600 --> 00:55:55,760 implementing also something called well we're implementing 896 00:55:55,760 --> 00:55:59,400 an MPC solution potentially one called Frost, but but it might 897 00:55:59,400 --> 00:56:03,520 just be a different MPC to where like an infinite tester has 898 00:56:03,520 --> 00:56:08,120 opened ADLC or participated in the opening of ADLC and it has 899 00:56:08,120 --> 00:56:11,120 to leave the network. Maybe the company stops doing 900 00:56:11,120 --> 00:56:13,040 this or goes bankrupt or something happens. 901 00:56:13,280 --> 00:56:16,960 Then another tester could take its place from another provider 902 00:56:17,160 --> 00:56:21,520 and we can heal the the network. So, so that's the last feature 903 00:56:21,800 --> 00:56:25,920 we need to implement and we have already done one smart contract 904 00:56:25,920 --> 00:56:29,040 audit through Coin Fabric. Now we are selecting the second 905 00:56:29,040 --> 00:56:31,960 smart contract audit firm. So all of that together we 906 00:56:31,960 --> 00:56:35,640 should be ready to launch. We're also getting verbal 907 00:56:35,640 --> 00:56:39,240 commits on the initial set of Bitcoin depositors for our 908 00:56:39,240 --> 00:56:42,760 initial set of merchants. We have some investors who are 909 00:56:42,760 --> 00:56:45,920 you know who who have been early movers in Bitcoin like like 910 00:56:45,920 --> 00:56:50,200 Bitcoin miners like a water drip capital in Asia and and some 911 00:56:50,200 --> 00:56:52,800 other big we have another Bitcoin whale who is invested. 912 00:56:52,800 --> 00:56:55,080 So basically getting some Bitcoin lined up. 913 00:56:55,280 --> 00:56:57,800 So we have some initial liquidity, you know picking it 914 00:56:57,800 --> 00:57:00,320 out to all of that we will launch on in March. 915 00:57:00,840 --> 00:57:04,200 So I think we're on track to to hit the March punch date. 916 00:57:04,520 --> 00:57:07,800 And then you know we'll start creating a curve pool and maybe 917 00:57:07,800 --> 00:57:11,800 other decks's and having at least one centralized exchange 918 00:57:11,800 --> 00:57:14,280 and then having at least a market maker and kind of build 919 00:57:14,280 --> 00:57:18,800 up the ecosystem from there. Really cool. 920 00:57:19,360 --> 00:57:24,040 So I'm I'm actually curious that like there's there's a space of 921 00:57:25,000 --> 00:57:28,440 a lot of protocols, a lot of companies that have built 922 00:57:28,440 --> 00:57:33,920 Bitcoin bridges in the past. Who do you respect the most in 923 00:57:33,920 --> 00:57:37,680 these alternatives? Yeah, you know, great, great 924 00:57:37,680 --> 00:57:40,200 question. I mean just in the in the space 925 00:57:40,200 --> 00:57:44,720 of Bitcoin bridges I have to really say hats off to Threshold 926 00:57:45,080 --> 00:57:50,600 TBTC you know that that team there I was fortunate to work 927 00:57:50,600 --> 00:57:55,200 with someone from there for a few months just even helping 928 00:57:55,200 --> 00:57:59,120 think through this project and I think they've they've they have 929 00:57:59,120 --> 00:58:02,240 a different system something based on the keep network or 930 00:58:02,240 --> 00:58:06,280 keeps which was I think invented like four or five years ago or 931 00:58:06,280 --> 00:58:10,240 developed but but they're really in terms of you know their goal 932 00:58:10,240 --> 00:58:14,760 of having Bitcoin in E4D Phi in a Safeway. 933 00:58:14,760 --> 00:58:19,240 I think that vision we share that vision so we're really big 934 00:58:19,240 --> 00:58:23,040 fans of of what they've done and and they also have done a lot of 935 00:58:23,040 --> 00:58:25,800 really smart engineering and and and so on. 936 00:58:26,160 --> 00:58:28,520 So it's really, it's really cool. 937 00:58:29,040 --> 00:58:33,000 But basically, you know, we, I mean we we try to be respectful 938 00:58:33,000 --> 00:58:37,560 to everyone, but we, we love people who, you know, don't see 939 00:58:37,560 --> 00:58:41,320 it, don't see block chains as sort of religions. 940 00:58:42,200 --> 00:58:44,600 It can, it can kind of go down that way. 941 00:58:44,600 --> 00:58:48,080 And of course everyone, if you are invested, I mean, one of the 942 00:58:48,080 --> 00:58:50,560 goals is of course to have ownership. 943 00:58:50,800 --> 00:58:53,280 And when you have ownership in something, of course you have 944 00:58:53,280 --> 00:58:56,200 some human biases where you favour that over other things 945 00:58:56,200 --> 00:58:58,600 that you don't know or are less familiar with. 946 00:58:58,960 --> 00:59:02,400 But it should not as elevate to the level of religions where you 947 00:59:02,400 --> 00:59:05,000 know they're warring or so on you know so. 948 00:59:05,000 --> 00:59:09,680 So anyone who you know wants to have Bitcoin in Ethi Fi or 949 00:59:09,680 --> 00:59:14,240 Bitcoin in Solana or any other chain D Fi or you know D Fi 950 00:59:14,240 --> 00:59:17,560 rebuilt on Bitcoin in different ways also great. 951 00:59:17,720 --> 00:59:21,560 You know anyone who's kind of you know is open minded to two 952 00:59:21,560 --> 00:59:25,440 or more things. We we we love those kind of 953 00:59:25,440 --> 00:59:31,320 inter interdisciplinary people and and so and and so we also 954 00:59:31,320 --> 00:59:34,840 like to talk to developers a lot and people who are you know 955 00:59:35,160 --> 00:59:38,680 close to the engineering behind this stuff because I mean I've 956 00:59:38,680 --> 00:59:42,520 sort of simplified a lot of you know math and so on some of it I 957 00:59:42,520 --> 00:59:45,520 understand some of it I don't but there's a lot of you know 958 00:59:45,520 --> 00:59:47,520 the devil's in the details with the engineering. 959 00:59:47,520 --> 00:59:53,120 So, you know, our our hope is that by getting DLC capability 960 00:59:53,120 --> 00:59:57,320 and infrastructure to to a lot of smart people, they'll come up 961 00:59:57,320 --> 01:00:00,080 with more unique and more interesting solutions. 962 01:00:00,400 --> 01:00:04,520 That we haven't thought of. So we see DLCS as as not it's 963 01:00:04,520 --> 01:00:07,440 not a layer two or anything, but it's like a technology that 964 01:00:07,440 --> 01:00:10,680 people can build on and there's a lot of it like building on 965 01:00:10,680 --> 01:00:12,480 Bitcoin interest that's going on. 966 01:00:12,480 --> 01:00:16,200 So I think we should you know really look at building on DLCS 967 01:00:16,200 --> 01:00:20,080 and and there as even in this call we mentioned several 968 01:00:20,080 --> 01:00:23,200 different parameters that are very impactful that you can 969 01:00:23,200 --> 01:00:25,960 choose on how you design the application. 970 01:00:25,960 --> 01:00:28,160 So you can have different applications and and that's 971 01:00:28,160 --> 01:00:31,280 great and we can support also sports betting not to poo poo 972 01:00:31,280 --> 01:00:33,720 that that's a big industry in in the real world. 973 01:00:33,920 --> 01:00:37,560 So that's one thing or you know there's so many others that 974 01:00:37,560 --> 01:00:41,000 we've heard especially when it comes to like ordinals and the 975 01:00:41,000 --> 01:00:42,800 new types of assets you can put in. 976 01:00:42,800 --> 01:00:46,520 So anyone who's building and is open minded, you know, we 977 01:00:46,520 --> 01:00:49,560 respectfully. Cool. 978 01:00:49,560 --> 01:00:55,080 So if people are interested to connect to you or to the DLC 979 01:00:55,320 --> 01:00:57,520 link work with, where should they go? 980 01:00:58,360 --> 01:01:01,960 Yeah, I would start with you know started our website DLC dot 981 01:01:01,960 --> 01:01:07,040 link and kind of an all Inge to the first company we partnered 982 01:01:07,040 --> 01:01:11,280 with Chain Link, but again not strictly affiliated from a 983 01:01:11,280 --> 01:01:13,760 technological standpoint, although we respect them 984 01:01:13,760 --> 01:01:16,040 tremendously. We are looking at Chain Link 985 01:01:16,040 --> 01:01:18,720 proof of reserves. We're looking at chaining CCIP. 986 01:01:18,720 --> 01:01:20,960 So there's, you know there's there's a lot of, you know, 987 01:01:21,000 --> 01:01:23,760 partnership there. But anyways, start with DLC 988 01:01:23,760 --> 01:01:27,360 Link, our docs are there docs dot DLC dot link. 989 01:01:27,680 --> 01:01:29,960 Also I usually recommend our videos. 990 01:01:30,120 --> 01:01:33,320 We have a video on our own page, it's one minute long, it 991 01:01:33,320 --> 01:01:36,200 explains it. We have some blog posts around, 992 01:01:36,360 --> 01:01:39,400 you know, how does this at the station work in detail. 993 01:01:39,640 --> 01:01:42,000 You know, what are things you need to know about the testers, 994 01:01:42,320 --> 01:01:44,800 What are the things you can do like advanced features. 995 01:01:44,800 --> 01:01:47,640 This enables for ordinals, people building with ordinals or 996 01:01:47,640 --> 01:01:51,000 other Bitcoin based assets. You know, we try to just have 997 01:01:51,040 --> 01:01:54,600 you know content that describes it it. 998 01:01:54,600 --> 01:01:57,760 We're also now making Chinese language, Mandarin language 999 01:01:57,760 --> 01:02:00,640 content, so that because now we're working with diverse 1000 01:02:00,640 --> 01:02:04,200 audiences, in the future we should have Spanish and other 1001 01:02:04,200 --> 01:02:06,920 languages as well. And yeah, we're just, you know, 1002 01:02:07,240 --> 01:02:08,960 drop us a line. There's a chat bot. 1003 01:02:08,960 --> 01:02:12,280 You can join our Discord. I'd be totally remiss if I did 1004 01:02:12,280 --> 01:02:14,520 mention that. Join our Discord. 1005 01:02:14,520 --> 01:02:16,120 The link is on the bottom of the website. 1006 01:02:16,400 --> 01:02:21,760 There's also a a ADLC community telegram for engineers 1007 01:02:21,760 --> 01:02:25,200 specifically interested in DLCS. We'll put that somewhere on the 1008 01:02:25,200 --> 01:02:27,200 site. It's not there today but we'll 1009 01:02:27,200 --> 01:02:31,280 we'll get it added and and yeah, just you know engage with us, 1010 01:02:31,280 --> 01:02:33,520 ask us questions. Come to our Discord, ask 1011 01:02:33,520 --> 01:02:36,320 questions, and we're here to help. 1012 01:02:37,720 --> 01:02:39,360 Cool. It was great to chat with you. 1013 01:02:39,360 --> 01:02:41,960 OK. And I wish you the best of luck 1014 01:02:41,960 --> 01:02:45,640 for for the upcoming launch. Thank you so much. 1015 01:02:45,920 --> 01:02:48,960 I'm, I'm glad we got a chance to go through on a technical level 1016 01:02:48,960 --> 01:02:53,640 because as you can see, this is like a set of meandering, you 1017 01:02:53,640 --> 01:02:56,040 know, startup discoveries over 2 years. 1018 01:02:56,040 --> 01:02:59,360 So I'm I appreciate you taking the time to kind of walk through 1019 01:02:59,360 --> 01:03:02,040 the full picture. Cool. 1020 01:03:02,360 --> 01:03:06,040 And thank you to our listeners for tuning in to the episode. 1021 01:03:06,280 --> 01:03:11,520 I'll catch you in the next one. Thank you for joining us on this 1022 01:03:11,520 --> 01:03:13,920 week's episode. We release new episodes every 1023 01:03:13,920 --> 01:03:15,960 week. You can find and subscribe to 1024 01:03:15,960 --> 01:03:19,680 the show on iTunes, Spotify, YouTube, SoundCloud, or wherever 1025 01:03:19,680 --> 01:03:22,080 you listen to podcasts. 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