This is epicenter episode 405 with guests, Joe Andrews and
Zach Williamson. Hi, welcome to epicenter of the
podcast where we interview crypto Founders, Builders and
thought leaders. My name is Sebastian quechua,
and I'm here with Dave Ocha, who's a new co-host on the
epicenter team. So Dave is the co-founder of
Osmosis. So he works very closely with
Sonny's been working with Sonny for several years on like Sitka
and other projects, so Dave welcome, welcome to the
epicenter host roster. He tell us a little about
yourself and introduce yourself to the audience.
Thanks Sebastian. I'm Dave.
The as Josh mentioned. I'm a co-founder of Moses with
Sonny. Yeah.
There's also another collab Center hosts, which probably
know I also like run the proof, stick validator sicko which
McNeely validates Cosmos trains and that's why I've been working
with Sonny for a number of years that I used to work on Tanner
McCoy and calls us DK. And I guess now working both
these actively N+ Moses prior to us, Moses.
I was like doing a lot of research on how to improve
snark, recursion and like, how to build starts with a
Alessandra Piazza and like, my other, great Folks.
At UC Berkeley. So privacy is starts acting a
very near and dear to my heart. So, uh, I'm pretty excited to
the podcast today with plastic. Yeah, it's I think it's really
fitting that you're here because today we're speaking with Joe
Andrews and Jacque Williamson head of product and CTO at a
search protocol. And so we had Zach and Tom.
Another team member on the podcast in March of last year.
And so we're here for an update today.
Thanks for joining us, guys. This is the pleasure to be here.
Yeah. Thanks for having us.
So before we talk Joe and Zach about Aztec and the evolutions
for that project since lat we last had the bond.
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So since last time we had you on, how is the company grown?
And you know, what's been the evolution of Aztec in the last
year, or so? Yeah, it will quite quite, a
lot, has happened in the last year.
I believe the last time we chatted, we just published our
latest picture overview, search plunk.
And since then, we put it into practice by releasing the first
private layer to, on ethereum, using that research.
It's a network that allows users to Shield the theory of another
tokens and send it privately and that's been the Main, the main
focus of the company for the last year and now we're now that
that's done. We really want to bigger and
slightly more ambitious, things that we yeah happy to dig into
as well. Yeah, I mean, last time you were
on, we talked a lot about, you know, how the Sheila
transactions contract worked and like, how that works for the
user and also under the hood, but we did talk about defy
little bit and I think that, you know, looking at what you guys
are doing now, that's definitely like more on your radar.
How has the growth in defy in the last year?
Or so like help shift your focus has it, you know was it Wizards
an accelerator and shifting your focus more towards defy or where
are you? Already sort of on that track.
Tell us about that Journey. Yeah, definitely said.
I think the explosive growth of defy, really shifted our Focus
from focusing on kind of more web to use cases and it's
created a market for previously. On web 325 was only kind of low
tens or hundreds of millions. There wasn't that much of a need
for privacy, but now we're in their kind of fifty to a hundred
billion of Market Capital locked inside defy.
There's a huge need for privacy there.
So it's definitely shifted our focus and the product offering
as well and the networks capable.
That is the focus. Pretty much entirely on D5 with
the upcoming release. Cool.
So for people who are not familiar with a stack, give us
the high-level overview of what you guys are working on and we
can kind of go from there. Show these plastic, he's is
state-of-the-art. Cryptography to enable users to
hide their identity when transacting on etherium right
now. One of the main, probably one of
the main problems with transacting on blockchains, is
the fact that everything is public, which means that's
everything that you do. Everything every transaction
that you make is viewable by the entire world.
Now this this isn't a necessarily he's much of a
problem and people that are standing around with
cryptocurrency, but one when we Been moving to a world where
more and more financial transactions are being moved on
chain. Because if its value in the
settlements, there it started. Bigger problem is going to be in
our opinion, the problem over the next few years, with regards
to blockchain. And so, and we're here to solve
it. We use a niche market ography
called the zero dollars, proofs to enable users to prove the
correctness of their transactions without having to
actually critical information. Summation to The Wider World.
Things like the identity of the amounts are transferring the
assets. They're transferring.
We're yeah, we're steadily building out our technology and
architecture to support more and more use cases.
What kind of use cases? This is a this is open that
because like Sheila transactions are cool, you know?
And there's lots of in people be working on that recently.
We had terminated cash although they've gotta think like a quite
different approach. But you know, what does a zero
knowledge, like a ZK, ZK, roll-up effectively.
What is what does that enable in terms of new types of use cases?
I think this culminated in March with the release of CK money and
zk- the front end on top of ZK. ZK, roll up, and it enables for
the first time. Let the rim transaction to exist
fully privately. So, you have Ironclad privacy
guarantees, very similar to the Z cash protocol.
The circuit is going to use a similar underlying kind of set
of nullifiers to get strong privacy guarantees.
But for the first time that transaction is actually cheaper
than a layer one bathroom transaction, so, For us it's the
seismic shift where users don't have to choose between privacy
and kind of being on a theorem and being kind of in a world
where lots of people are building applications.
You can have kind of your cake and eat it.
So to speak. You can have privacy.
But on the Chain whether it's the most developer activity.
I can expand a little bit as well with regards to the zkc.
Karela at the core of approach. This section is the idea that
well, instead of sending to the little chain, like the basic
information about your transaction.
You know who you are, who you're sending has sending cryptic to,
instead you serve, you send a signal screw.
So, basically say, well, here's my old encrypted banners.
And here's my new kept the balance.
And I can prove to you mathematically that I follow the
rules of the blockchain, you know, I've deducted something
for my balance and added it to somebody else's pants, but I'm
not going to tell you who I am. Who I'm sending my money to or
how much my Was however, zero has proved a very expensive,
computationally expensive to check requires a lot of like
dich cryptographic operations, which means that it costs a lot
of gas. So the question one of the
questions is how you get well in general, how to get cheap
transactions on a theory. But for us, the question is, how
to get cheap relatives. I can slowly filling and the
solution is is a little bit of inception ask, but you you go
wonderful deeper, instead of sending zeros, proofs to to the
blockchain, which represent private transactions you Create
a zero knowledge proof, which proofs of correctness of a large
number of materials proofs, and allows you to send one kind of
Mega transaction to the ethereum blockchain.
That proves the correctness of hundreds.
If not thousands of individual private transactions.
That's what a ZK, ZK. Roll-up is we taken to calling
it a private roll up because it rolls off the tongue a little
easier. It's like you're doing 100 proof
of a bunch of transactions, but those transactions are
themselves, like using zero knowledge proof still like be
valid or like get privacy. Exactly.
Correct yet. It'll set the The Entity
creating that meta magazine has proved doesn't need to know any
secret special information. So isn't this process like
starts, it's really expensive. So, how is this being done or
house? Like this?
Our Gator is sequencer doing, like be able to do without a
high fees. Well, that's being this being a,
that's the question and the something that we've been
spending the last two to three years, focusing pretty intently
on them. And we had to make several
relatively significant advances in the state of the art.
When it comes to use kinds of criticisms to get there,
specifically we needed a great as urinals proving system.
That was fast enough that you could make these gargantuan
proofs because yeah, generally if you want to create a zero.
North proof of a computation, the act of making that proof is
going to be about a hundred thousand to a million times
slower than the original pre-construction.
So so actually verifying journals, Prix inside as well as
previous one of these kind of computation like mares.
One of the one of the advantages that we have is as a company is
what we are chief scientist is alright that was like, he's one
of the best in the one of those photographers in the industry
and together. We've not just published the
plant cryptosystem which was one of the which is one of the
Extremely fast, Zs knock, but we've been able to modify and
update and and mold operating system to, to engineer it, to be
to be tailored towards our specific needs.
And so that meant that we have a lot of agency to make the
previous term, particularly good for things like verifying zeros,
proofs and doing very quite Advanced too difficult
computations. And that's that's really why
we've been able to create this kind of construction on the
theory, but you currently do. It's the this District as going
to be have as the only one. That's actually very viable on
the theorem blockchain given the limited cryptography.
You can do inside a smart contract.
Super cool. I've never been following the
story of plunk. I remember when the paper first
came out and made like such huge waves during a snark temper of
that year. Yeah.
What's the story of the name clock?
Like it's such an interesting name inches is one way of
putting it. Yeah, so it was originally it
was a placeholder name. So we really live a struggling
to come up with a decent over the name for the paper and, and
I suggested function as a bit of a laugh partially, because As
you said it was this this month's not temper like over the
last few months in that in that year 2019 and quite a lot of
seminal cryptography. Papers have been released and
welcome had like big ambitious names, you know, like powerful
names things like, you know, Sonic could dark some stocks and
Marlon and and and I just I felt like it would be I thought
basically our thought be funny. So it's an electron.
It's British slang for cheap, low quality wine, and I feel
like there's a lot of similarity because You know, I understand,
you know, get getting getting to the bottom of funk requires
making questionable Life Choices bit like bit like, you know,
real Plank and and and, you know, it gives you a headache.
If you spend too much time with it.
So basically, okay. So basically we call the plot be
published at your prints generally.
Print takes like a week or so that you press this big like
this website. That is a repository of
cryptography papers generally takes about a week or so, so to
approve a paper for Elites who thought and it says publishing
now deal with the name later. A publicist, whatever night.
And then people started tweeting about it and say, hey, what's
this Punk thing? And so basically the kind of
work that I do about it, and we figured it was a bit chilly to
change it and, you know, it's kind of funny.
So, here we are today. But it got kind of like
backwards name right there because I do yes.
Yes, it's quite obvious. So yes, I think one of the only
useful well not useful. One is one of the one of the
main skills that I picked up from a degree in particle.
Physics was elaborately named acronyms that stands for
permutations over the branch base.
That's the opinion. The L4 EG medical with me.
All day canvassing, non-interactive arguments of
knowledge, and the a is silent. That's great.
I love it. I hope it can push for Snorks as
Edwardsville Starks. I don't know.
We've lost this one though. Okay, medical and scared.
It's eight. I mean, it's me, it would be
nice, wouldn't it? Yeah, we got a few years of
inertia to push back against unfortunately.
So last time you were on, we talked about defying before, we
did this interview, I listen to that episode.
And one of the things that we talked about was, you know,
privacy and defy. And, you know, you mentioned
that privacy makes defy paranoid.
And the way you described that is by by using a, by using maker
as an example. Could you elaborate on what you
meant there? And you know how privacy you do
more? Idly are at least privacy
Technologies, break certain applications in defy.
Yeah, absolutely. So so yeah to expand on that
parrot, Paradise. So what basically the question,
what are the questions which is relevant when it comes to
privacy protections? Action is how in the blazes?
Do you make a private defense protocol?
Because it'd be really nice to have a private version of make a
double, you can make a CD p and nobody knows how much it is.
And you'll be nice to do things like have a privately privately
centralized exchange where you have a private order book, but
you can still match trades, but the Problem with these
approaches, is that in a private world?
You can't have public State because modifying a public very
public State variable leaks information about what you're
doing. For example, things like, you
know, swap you for your sort, you need to understand the total
amount, the total Supply. You have a bit of an asset to
perform such an established liquidity, you have.
And so, if you deposit into a liquidity pool, then you're
changing the total metal liquidity.
That's public variables. So people can see what you've
deposited. That's not private.
Similarly, for make a deal if you create a collateralized debt
position that's private. That means it's encrypted.
And so how in the blazes is anybody supposed to figure out
if you're becoming undercapitalized?
And if they are how they're supposed to liquidate your
position because it's encrypted only only, the CB Creator knows
how to decrypt it, and they're not going to help you liquidate
their position. So that's one of the fundamental
problems with with privacy and the parent icons.
For example, you could create a private, make a dowel where, you
know, you have a CD P where the weather's ubiquitous.
Constantly kind of scent effectively, Chris of Life.
They have to continuously prove that their CDP is over
collateralized, because they're the only person who can create
this proofs, and if they don't save the proof, there is proof
of life in the, you know, like a day or two, then they get then
there's the bad happens to their position.
And so they're always getting around this, we wouldn't be
doing what we're doing. If we didn't think that we
could, we could provide practical and valuable privacy
to defy. The the Holy Grail solution is
to use multi-culti computations where, for example, if you want
it, If you want a, for example, a decentralized exchange with a
private order book, but you can still match trades.
Amongst people in theory. You can do that through
multi-part computations where you have, like a ring of
individuals. They will have their own orders
and prices that are all encrypted and they slowly engage
in these NPC's with one another to kind of drip feed information
about their orders to counterparties that have
matching orders and innovate. You can, you can achieve very
high quality high quality ability of its kind of
approaches. However, the Texture of these
approaches is is absolutely enormous and we're nowhere near
the point today where you can, you can bootstrap you kinds of
these kinds of protocols, you know, hardly hardly anybody in
the world who can, who can develop them to be efficient
enough to work. And and so you don't.
You don't have that kind of that Mass Appeal that you have a
theory where you know, anyone can code up a smart contract,
but we do have a much simpler solution for privacy when it
comes to defy which we could expand on.
That would be a I don't know. Preempt any questions, then,
please go ahead. Let me explain.
So yeah, so, how do you get? So how do you, how do you, how
do you get private defy? Well, the the the simple answer
is you don't basically you. Leave you make you keep the
default protocol public, you know, you know swap.
Make it out. You leave them where they are.
Yeah, hang out, on layer 1, completely public.
Everyone can see what's going on.
And what you do is you make the assets private, you ensure that
individuals have that their Holdings of various
cryptochrome. Is anonymous.
So if, for example, let's consider the make it up addition
again, imagine, you know, you know, make those public.
So you can see, when I see the piece created, you can see its
value. You can see what it comes on the
colors liquidated, but you don't know who upholds it.
And that's very high quality previously because at that time,
it could be anybody. And so, the most important thing
isn't to an opera need to make that the the D5 protocols
private. It's not to make the the
effectively, like the sites, which interact with the value
private import things, to make the value holders private and
give them an anima anonymity. And and that's how we're
planning on doing a non on achieving privacy.
So it's like a you have you hide all the addresses then you kind
of public hearing when you do a trade.
It's what's public. Is that a this amount is going
from some a dress that has some the right thing does public
action and it goes back to a new like price.
Exactly. Yeah, so you can see in the
video, you can see like, you know, 10/10, for example, like,
you know, 10 teeth is gone from my dress question mark question,
mark, question mark is going to you to swap got a bunch of doing
that's going back to address question mark question mark,
question mark. And so That kind of quite we
think quite effectively solves a problem.
You know, these these protocols can still exist in all the
little their magnificent complexity, without having to
kind of re white V, right. Themselves to be private, but
you still get the benefits of privacy that users care about.
I've got an analogy of it. Be helpful for the listeners.
We internally, we call it the D5 bus, so you kind of see that the
Aztec roll up contractors being like a bus station and there's
all these buses that have kind of tinted windows and you can
see the front of the bus. It says I'm going to use Up to
swap if die and people can get on the bus and you can't see
who's getting on the bus, but it will go to UNI swap.
Take the F. Do you need to open?
It will bring back a load of died on the return journey of
the bus, and give it back to the users in the asset Network.
And so, so I think is a good analogy for kind of showing how
this network interacts with the rest of the, the defy ecosystem.
And whilst most giving strong privacy guarantees to everyone
who's on that bus or in that transaction.
So from a user perspective, I just want to like walk us as I
understand it, walk through the transaction flow here.
I want to trade on you swap, in order to do that.
Let's say I want to trade like, eat for die.
I send the eith to the Aztec contract.
I get into the bus effectively then that tree gets made.
And then I'll get say die back at some point.
Couldn't someone just be watching my address and see that
I interacted with the contract? I Acted with, as you call it,
this, you know, swap bus and just deduct that.
I've just made a trade on. You just swap.
I mean says a bit more. It's a bit kind of AP to direct
deposit like that in the same transaction.
That would be kind of a way to link your lair one address to to
that trait, but the floor actually is a bit more.
It's going to one more step so users have funds already on the
Aztec Network. So they're already shielded.
So you would have in a separate transaction, your teacher, even
yours. Make it as you get you.
And then you have these encrypted, you txo notes on
Aztec and you can use those to interact with any L1 smart
contract through our defy Bridge.
As in this case, you're choosing trap interact with the uni swap
each dipole. So you kind of send a
transaction that says, I want to put one equally into the next
bus. Going to the that ball and the
owner of that teeth could be anyone who's ever deposited e to
the Aztecs Park on track. See identity is completely
hidden throughout that process. The roll-up provider will then
bundle all those transactions with any other user who wants to
do the same trade. So, say Zach also wants to trade
to Rican. A few other.
People are also getting on the bus.
So we'll send an aggregate then transaction from the role of
contract out to UNI swap say five even total and we'll bring
back die to the Aztec roller contract, and that will then be
dispersed in zero-knowledge notes.
To the holders who participated kind of in that transaction.
So you're actually not getting the proceeds at the Depot
interaction on layer one. You're getting it in encrypted
form on there too, which is how the strong privacy guarantees
kind of maintained through that. Think it's quite an interesting
way of doing it and that can talk about the actual
cryptography because it was a bit of a breakthrough moment for
us to actually get their identities hidden through the
process. Hmm.
Okay, so it uses the same note system as like the previous
version. I think that's what I miss.
The new systems actually not graded Forum because the old
Aztec just had confidential note.
So here, both the balance and the owner is encrypted.
So that's what gives us kind of the anonymity.
What we need to do these transactions.
I was looking like from user perspective, you know, right now
as a connect better, masking yourself website and just press
about to do a transaction. So is it?
Like I said, it's still pretty similar.
We're on on like the Aztec site. There's still a fact, my wallet
and just do the trade that the transaction like does all these
three steps like go to L1 Swap and go back to L2.
Yes, sir. So we have a kind of we call it
CK money, and it's kind of like a Showcase of what's possible
with drastic SDK. And so the next kind of three
months, the, the main venue for these trades will be seeking
money and you'll be able to connect metal mask.
Kind of, it will show you either.
If you have aleurone or if you've already kind of use the
Aztec Network, it will show you as you can eat, and you'll be
able to kind of do these various default interactions.
And yet, all of that will be abstracted from the user.
Via SDK the kind of three to six-month goal is the sdks
integrated on a lot of these L1 front-end protocols.
So you can actually just go directly to UNI swap or are they
or some of those protocols and perform have the option to
perform the interaction privately?
Very cool. I feel like this General
approach is like the future of a practical privacy for a D5
things. It's often like, you know, if
you want public information like, you know, constant Park
market makers, our cost function, then you have to have
this false in public. And I'm saying, yeah, I think
it's kind of The Best of Both Worlds because you get the kind
of the transparency of layer 1 D Phi, which is what made it grow
to be so popular, but you also don't have to sacrifice.
What a lot of people take for granted in the web to world is
just basic transaction. Percy.
No one can see my Robin Hood account.
No one can see kind of my Revenue accounts.
I think this allows new types of kind of user experiences that
give you the best of I think our one defy, but also strong user.
Crt's. Yeah.
Sorry. I just want to like, stay on
this defy topic a bit. So in that case, then you need
to create a me like UNICEF. We need to add a like a sty
Keith Aztec die pair I suppose. And if you wanted to trade those
assets. That's one of the one of the key
parts of our precious. That's, we're looking at the
lick, the the kind of evolving layer to landscape in right now.
Kind of the the impetus is on having strict liquidity because
if you want to benefit from the fee reductions that you get from
where operational are to, you've got to move that it - will defy
protocol into the layer 2 and it has a principal balance earlier
liquid asset, pairings Etc. But for us we felt we wanted it
to be very much help. Users want is to leave the the
actual source of the pyncheon layer 1 because that's where
they're going to get their the best prices, but interact with
the cheaply. And so even if you have shielded
Aztec assets and you're using our defy bridge to interact with
it that the male element smart contract, like, units, of,
you're still talking to the Unis.
Swaps layer. One liquidity pool.
So the E to die pairing that you're getting and the
associated price. It's still, you'll see it's
still based on the global unit circle.
So in order to perform a name like Performing integration with
that steak. You you you need a facility did
some kind of facility ability to Shield user funds using the
Aztec network, but that won't be tearing affect the prices that
getting from using our protocol. Okay, interesting.
What about collateralization? How would collateralization work
using Aztec? First cdp's to me.
Yeah, like make like like a CDP. For example, yea, it says 2
because 2 methods ready. You can have a sack kind of
mentioned earlier on like a unique.
CDP for you where you don't really benefit from huge gas
savings, but you have a strong privacy guarantees, or you could
have kind of TSE DPS. So you can kind of have a system
where we all agree with a load banded other users that we want
to enter into a three month term CDP.
And the LTV ratios can be kept at a certain amount and then
everyone's kind of doing the same thing.
So you can get really strong gas savings as well as prophecy
savings from doing that. So, it depends on kind of the
end-user product. We're starting to see a lot more
fixed rate, kind of protocols come online in defy.
So, I think that's where I think the kind of retail users will
end up, is kind of on, on more Structured Products rather than
wildly slowly swinging. Pause, but that's kind of a I
think your approach to we take with a transition of blends.
I didn't click all like, are you imagining that the collateral is
held, like can just like one big collateral pool held by the
contract or imagine that there's some out like a and like my
share of the pool is private but Hannibal on the role of side.
Yeah, so you could have like Aztec q4e CDP and you could have
different characterization ratios.
So this will be the hundred and hundred fifty percent cloud
rotation ratio. We all enter on a certain date
and it will be a three month term and kind of that would be
one approach to doing it. And then, in that case, you get
like a much better gas cost per user.
Actually taking out that form of that form of debt.
You could have the case where, if you're a large user and you
don't mind paying kind of the L1 cache, fees yourself.
You can just have free flexibility by entering in kind
of any CDP of your choosing but you wouldn't get any batching in
that circumstance. You'd still get batching on the
cost of privacy. So you'll go to have your
transaction backed with other zero knowledge snarks that are
doing different things that you would pay the full cost of the
entering the CDP position. So you get kind of a bit of
scaling in terms of privacy. Those are but still find, like,
hold the collateral in this or sorry.
You have the loan amount being, it's private as cycle to us, but
just collateral has got to be on chain since.
Yep, you need liquidations, go to see it or yeah.
So, in that case, it would be like, in a single user case.
It would be like smart contract would end up position and that's
what control be like a crate to opcode.
So you have kind of a and use my contract for every kind of CDP
that. Ratings, when I was just one
user kind of behind that, CDP just the source of funds that
do. The initial characterization are
coming from the state network, not from kind of a tainted one
address. Very cool on this like, privacy
idea. So I don't really see caps.
There's a problem of people would go from the transparent
pool into the shielded pool and then it can almost immediately
go from shielded pull back to transparent.
Or in this case would be like shielded pool to, you know, salt
trade the exact same balance. I would, how are you thinking
of, like, mitigating like the link ability their of exact
amounts? You know, it's like, he's a full
amount, you know, it's a big problem in a synod positivism.
Location issue in part of it, as ux and design issue because what
because the discrepancies tank is still relatively new.
I think a lot of users don't fully understand how it works
and that you'd be effectively your by when you Shield your
tokens your, the active that of deposit against the Shield, it
was public. So they can see for example,
that, you know, Dave puts anything to Aztec and but, and
then. And so, if you then immediately,
withdraw, its very easy, what's happened?
You know, you see, you see, there's the positive.
Teni interesting. And then in the next block it
was just any traffic tickets. I mean, yeah, it's kind of
obvious. But what you really need to do
is deposit your value into Aztec.
Wait a little bit and then withdraw to a different address.
Your is the one you originally deposited from because let's
say, because we try to encourage through our through our ux UI
people to deposit and relatively fixed amounts like once anyth.
So the way we would ideally work, like if you're if you're
for an educated, Is you deposit anything to ask Tech, you know,
you wait a few hours and then to a different dress, you withdraw
the 20th nest egg. And that's how youth could have
come from anybody who like, you know, from from now to the dawn
of the process, start start the protocol deposited teeth into a
state called or acquire teeth within the asset Network somehow
perhaps 255. But most of it I think it's just
making sure in the in the in the user interface that the user is
informed of what they're doing. And so that if they're if they
do this this fluid humidity deposit withdraw in the UI goes,
you know, hey you sure you want to do this and Joe, I think you
can you can expand on that a bit.
Yeah, there's a few cases but we're kind of touting this idea
of privacy school. So kind of just really helping
to inform the user of how private a transaction are about
to do is an exact was saying that can be anything from a your
your unshielded to the same address you deposited from.
That's that's not private. And or there's a high link
ability risk there or things. Like if you're kind of and
shielding to a very large significant number of decimal
places, and then there's also So kind of can add to the link
ability of those transactions. The great thing about the kind
of the default bridge and it doesn't fix all of these things,
but it's the first step in the road is the Privacy kind of
starts to become by default not opt in.
And I think they're that the issue was some like other
privacy systems. Is that when you have to choose
between privacy and not having it traditionally, the user
experience has always been worse or always been more expensive.
So it's always been the incentives is to get out of the
Privacy shield and What we're trying to do with the next
couple of versions of Aztec is change that flip it on its head.
So that users should be comfortable keeping their funds
in the Aztec Network. And then those kind of
opportunities for a privacy breach should become a bit more
reduced, but you still have to kind of be a bit careful when
you're interacting with the depot bridge.
If you kind of deposit, I don't know, 90% of one token to the
Aztec Network and then there's a defect which trade for 90% of
that that token. You can kind of start to.
Pick figure out what's happening, but where the defect,
which I think comes into his own as if you have kind of smaller
trades that have drip fed into the market over time.
If that trade, is kind of pretty homogeneous compared to, like
the normal size of a transaction on the network for that asset
pair. You have great privacy, and and
that's what the you. I will kind of enforce and try
to guide the user around, where the Privacy School.
Post, very cool. So you're like, detecting these
cases, where you think it's easy to I can link back and then
giving a warning, right? Then saying look this
transaction is likely linkable. Maybe you want to break it up or
wait some more time. Yes, that's the idea.
And I think, like, on day one. It may be kind of just like on
this possible indicators. It's kind of like strong weak or
kind of extra strong, but we're working on kind of the metrics
to put into it right now, but I think that's because the easiest
way that to identify the user of a potential issue because a lot
of this is just user experience. It's you haven't had to think
about this in a web to world because you have kind of privacy
from everyone except your service provider, but in a web
three World, there are kind of these different cases where you
do need to kind of be notified and users have to kind of accept
different norms. And I think it's on that some
applications to start to think of better user experiences to
notify what data is public and As you can see what.
And this is just one thing. We're trying very cool.
And I guess there's also sort of thing where the amount of
warnings you get really goes down over time as more assets or
more historical records. Are there to be selecting from
definitely. Yeah.
As the kind of privacy set
grows. You should see that's a mess
warnings. And yet the, the kind of network
effect around previously announced a network or stronger
and I think also the amount of times you want to kind of leave.
The Aztec network will also Kind of shrink.
So you should kind of have less of these these opportunities to
accidentally break a privacy think we can we can talk a bit
more about like how we get past kind of defy and and the longer
term goal and that would kind of explain a bit more about kind of
how Noir fits into all of this and how long term we think a lot
of lot more applications will happen within the network.
So they'll be less and less chances for those privacy
breaches. Yeah, sure.
I guess John talked about how you're imagining nor and more
privacy or more applications on the private side.
Yeah, so this is this. This kind of default bursting
were building is is merely the stepping stone to our of kind of
a grander aspirations. And it's an architecture that
we're calling is like the working title.
Is that step 3. Well right now with will be
released in March, you can Shield cryptocurrencies.
You can still run privately in the Universal way, which is,
it's useful, but it's doesn't really tap into the massive
ecosystem of innovation. That's happening in the
blockchain space, which is where The defect which comes in but
even that only provides it provides.
Good access to publicly one protocols, but where we think
privacy really starts to shine is that it opens up a whole new
category of interactions that just can't exist today on a
blockchain because of the, because so many so many
applications in for example, like traditional Finance or
payments, or like the kind of use cases.
I like it. Everyday individuals, desire,
require. Strong user privacy guarantees.
And so what we want to do is effectively, recreate the
etherium, smart contract ecosystem inside Aztec, but
where privacy is preserved, so that to give developers
Engineers users, the ability to write their own smart contracts
that have privacy baked into the core so that you can just sooo,
not just so you can. It's not just that you can have
a private token, but you can decide how it's transferred who
can own at how to meant it. However, subtle.
It. Because what this really
enables, what was what really excites us is that this is the
first time that you can meaningfully put your identity
on shame and Link it to your crypto currency accounts.
Without splashing your personal information all over the
Internet. It means that you can condition
you prove Parts about yourself without revealing at to anybody
else in the wider world. For example, you know, you can
have you know, an identity token that you that you can have some
some Cryptocurrency that's condition but holding its
conditional having one of these identities, infants, or if it's
more like more, it also opens up like more other Innovative
spaces, like for example, private entities where you can
have some data fields that are private, but you can like prove
Parts about your private entity to other people under certain
conditions. You can have it opens up a whole
Innovative tranche of blockchain based games where you can.
Eating for you can actually have information asymmetry.
So, you know, the players of the game, actually, you can not know
things about their about their counterparts which isn't really
the case with with a fully transparent setting, but all of
these things require programmability requires the
community to decide how they best want privacy to be used in
their applications and to be, and to have the tools and
ability to program it themselves.
And that's where you on a 6-3 comes in, nor is our highly
efficient. See, it's not very Language
spearheaded by by us, but by I kept quite a bit about them and
it's, it's a rust based on text language that compiles directly
to a highly optimized clock seconds.
And we're planning on using that in that in, in a, in a, in a
kind of the next iteration of our protocol design where
instead of our kind of zeeky zeeky roll-up, verifying the
same transaction, type over and over again.
There's this dislike private transaction.
It's private owners of Brothers directions.
Instead what the role of verifies is a zero, knowledge
proof. That's Work has come from a,
from a one of these circuits that's been written into our and
upload it into our Network by anybody.
Basically, it's the Gnostic Eastern technology, which allows
us to create a fully permissionless, private
programmable. Cryptocurrency Network.
And that's, yeah, that's pretty much once once, where once we
put out the defy pitch. That's where that's where we're
heading with all our energy and attention and resources.
Well, very cool. But I'm packing this is that
there's a bunch of grown-ups. They're soaked for the
programmability ideas. Like I want to be able to put
my, its kind of, is it like the sexy model where I guess, you
know, a couple of things try to do that where you have a public
or you have like a program on chain or on the Ambassador chain
that users can interact with and sort of a private manner, where
this, the contract can maintain both a public State and private
State and you every interactions updates both of these.
Yes, exactly. But where were things?
Things differ is the fact that we've been very much trying to
structure this architecture to look a lot more like a systems
platform. That would be more very familiar
to software Engineers. So it begs it's a kind of eight
familiar, blotching Concepts. Like you have a video questions
actually, have a concept of a call stack of contract.
I can call the contract, you can have one contract with multiple
functions and You can kind of have a reasonably, like somewhat
arbitrarily transaction depth. So you can have, you know,
contract past people, call. It conscious call each other
countries called by the contracts over and over and over
again, you don't have the some of the restrictions that other
systems have, like, sexy, because of the well, their
restrictions come down to the fact that the the protocol was
designed for this kind of limited recursion technology
that was available at the time and think things have moved
along a bit like a little bit. Like there's been a lot of
Development on these like Don cycles of elliptic curves with
this Halo recording system with the stuff and a 16, which means
you can get this kind of arbitrary deaf recursion, where
where you can have, you know, zika, Forest aggregate,
verifies, you give your surroundings.
You can press all the way down and this enables.
Yeah, it enables your, you will see, case knock circuit to
encode an algorithm, which starts to look a lot like VM
base cryptocurrency protocol, where you don't have to like
learn new and like kind of a diff.
Oblique different types of transaction, semantics.
In order to program it. Oh cool.
So it's like starting to look more like basically Reef where
it's solving, the old problem of, really only impact.
One contractor, like small set in one transaction because we're
limited proving tech for some curves, but now, it seemed like,
with the aspect, Unbound, recursion in this is like fixed
you can. Now, in theory, I'm gonna throw
my hands. Okay, we've not built yet.
So that the, the mission for our company is putting this in
practice over the next 12 months.
Poor I guess a question. Maybe this is a bit technical
for folks. But like, how does the proving
work here? We're essentially you're having
a this will give us like large something on multiple
transactions. Interacting the same contract
per block, but they all affect state.
Do you have some like out off chain?
Aggregator like bundle these together and make one proof or
is are some parts that are like available to the block or
opposer for them to do the proofs to get many transactions
to 1. On track for vlog.
Now, it's a good question because you do run into some
some circle decreased conditioners.
When you're dealing with these kind of off chain aggregation
Services, particularly, with the private, with, when protecting
privacy, where if you have multiple individuals, who wants
to talk to the same contract, then they're kind of that.
They want to update their Factory, modifying the steam
database and you can kind of get into problems with in a lot of
people kind of it's bit like lost people wrestler over the
same, the over a single piece of cake and And I will just kick
out a mistake. I don't know.
That's a great way of describing a race condition.
But there's a fairly simple straightforward way of solving
that which is basically to have this aggregated, be the entity
performing State updates. So that when individual centers
actress Tara Gator, they they request State updates to be made
on their behalf. And if they're private, that
they'll be encrypted at the public.
They won't be but it's actually the the aggregator he's doing
them at during the mechanical process.
Of putting these variables inside eight inside a database
modifying, this database values. So yeah, I think I think at this
point it's a relatively soft problem.
Okay, so suddenly privacy leak, in that era Gator already
access, the private database sort of like a private state.
So that's like there's no new information are getting exactly
that. I mean, if they agree that
you'll basically when you create your privacy proof, that that
proof will spit out a bunch of variables, but they're all
encrypted and those variables. Not in the database, but the the
abrogation doesn't have like doesn't know anything about
those those variables to them if they just look like random
numbers. So if they don't need to know
these random the actual data entries to handle State
conflicts. Well, the idea is basically you
don't you don't have a steak conflict.
So well, this may be getting into the weeds but dealing with
private State and public States, they need to be treated
differently. So, with private, the way that
the way, one handles private State modifications is Are you?
Well using this kind of this Bitcoin?
So I'm spent transactional check.
The idea is instead of having an act like a like an accounts
where you, you have a like something like a balance, which
you can modify over time you instead have these notes, that
you cannot be created or destroyed.
And so the base. So this makes the the state
model quite simple because the note can either exists or
doesn't exist. It can't change value.
And so, if you want to perform a state update for if there's a Is
easier to get some privacy variables.
Then you basically you basically you want to create a bunch of
these you to Excellence and you want and you want to delete a
bunch of existing utx sentence. And so, basically, you go down.
If you get a, hey I want to make these you txo notes and I want
to delete this. These other like you take Senate
but the key thing here is that they're all encrypted the, the
notes you'll be in created an encrypted and then it's, you're
destroying. They are, they're encrypted to,
but they're encrypted, but that this is really going to use the
reason I think maybe it is, I'm going to struggle to explain
this properly in the time you have available.
But the basic idea is when you want to destroy a note in Aztec.
The way we might be recorded as being destroyed uses, a
different encryption algorithms the way that we recorded a being
created. So basically the Mark and I are
in our kind of Ledger, which says I noticed be destroyed is a
different gription algorithm to the mahkum ayat, which says a
note has been created. So you can't ever link it like a
destroy notification to accrete its application.
Oh cool. So it's like you're making
everyone has to you to EXO's these private contracts defined
like literally predicates to eat EXO's, but then when you do a
transaction the new utensils to get created, but you break the
linkage like intra batch between inputs and outputs.
Yeah, exactly. I mean it's a very it is
extremely submissive. So to how easy catch handle
this. I think they were there very
much kind of Trail Blazers on this with as regards.
Cool, so, okay. So then like nor spin into this,
by making this like DSL for folks, to be able to write these
contracts that aren't in this cute Excel model, compiled
programs. Exactly.
So no I was going to have quite a lot of layers to it because
like the first the first thing that 9 is to solve is that these
programs that people are creating you to be turned into
extremely efficient journalist proofs because one of the main
problems with xenos cryptography is constructing.
His proofs is generally quite. So as I said, it's like early
Factor hundred K to a million times slower than running a
computation. Now, one of the ways that this
is can be sold is by delegating. Roof construction to third
parties. So a lot of scaling solutions
that don't that aren't private take this approach because it's
a bit of a no-brainer, you know, it's hard.
Copy is usually will just send it off to.
So, you know, hundred thirty-two kws machines and it'll, you'll
get it done in a few seconds. But because we'd had we're
dealing with private transactions.
You can't Delegate pre-construction for third party
because then you're leaking information and secrets to that
third party. So in so effectively all of
these programs that have been created and while they're all
took been tend to 0 as proofs, that will accrue construction is
happening. Be Directly by the user.
You know, I people with old laptops crummy phones.
And so you're very constrained in how much horsepower you have
available, which is why you need to be efficient, which is why we
developed a ton of like advance of the with our printing systems
and then, so not. But then you've also got to make
this thing easier to program, which means you've got it, have
the abstract kind of smart contracts, semantics State,
modifications semantics, you know, and all of that Associated
paraphernalia. That's easy to understand to the
user. And so there are two like, to be
crisp and that is still very much a work in progress.
I'm not going to, I'm not going to be arrogant enough to see,
we've solved that problem yet. But but I have every confidence
that we will let me know. I think, the first step is, is
abstract in their cryptography from from the developer, and
then the second step is kind of baking and more functionality,
and that's where the kind of the bit were working on.
But at the moment, you can kind of used more to just kind of
write a snark. But it doesn't really fit in
with the rest of the kind of Aztec roll up ecosystem.
So that's kind of the next focus of the company.
Post, Devo Bridges to build that, that part of things that
they're the actual language kind of early syntax is written, and
we're actively getting feedback on it right now.
As kind of a new way to write snack or prompt circuits.
How important is is that all this to I mean it's sort of
broader adoption of zero knowledge Technologies, you
know, in and outside of crypto. I guess like privacy-preserving
Technologies. Like I think if you take the
average web developer like or even iPhone developer or
whatever. Oh, I think a lot of these
developers have very little understanding of how the zero
knowledge Technologies work and how did Implement them?
And so how important you think this this work is to Broadening
the scope of use cases for, for zero-knowledge deck.
May, I think it's foundational? I mean, we just just have to be
asked us to look at why if they're in became so successful.
It was because anyone could write a smart contract, you
know, you have this incredibly powerful technology.
This just just just do it a letter that has suddenly stopped
becoming, it wasn't this kind of this, this, this incredibly
difficult concept to wrap your head around it, difficult to, to
interact with. But instead went it went from
that to going like, you know, his how you make a
cryptocurrency token, in three lines of solidity code or have
it. However many watts.
And it was very easy to access and I think it's absolutely
essential to propagate zero knowledge proof Sanders.
Kind of good trick photography to a wider audience.
You gotta you gotta explain it in terms that people understand
that are familiar to them and you got to extract the
cryptography away. As you said people, most people
are probably quite ready, like incredibly intimidated by this
comment ography. And, you know, there's the very
comment on that, as, you know, General different group to
control your own crypto, it'll end badly, and I see it as a
photographer. So creating an Action layer,
which presents very complicated. Drip systems as easy as some
programming languages with clearly understandable.
Semantics where the where, you know that whatever you produce
the cryptography behind, it will be sound.
And secure is absolutely essential for the, for the
Westfield adoption of this technology.
And what are the risks here? Because I, you know, we've seen
in in crypto that, you know, the bugs can be catastrophic.
We've also seen so the cascading effects of, you know, layers
upon layers of dependencies, you know, breaking large-scale
applications on the web like recently with like all this npm
kind of stuff that stuff happened around there.
If for a developer, I'm speaking mostly like developers outside
of crypto, but even the people coming into crypto and who are
like some background of development.
How do we ensure that? They use cryptography
responsibly, and that they're using the write that using
libraries, that are vetted and audited?
And even if there are developing at a higher level of
abstraction, but that, you know, someone doesn't use like a
cryptography library and like to build.
I don't know, some kind of messaging app.
Example and exposes everyone's messages or like something
catastrophic like this, right? Like what's the, what's the
right balance of like expertise to General availability or that?
We're looking for here? It's a good question.
And I'm not sure it's one without with that particular
easy answer. Because like the risks are real
and not going to try and trivialize what we're doing.
I mean, the complexity, the amount of complexity involved in
these Advanced cryptosystems is absolutely astronomical.
And then if you add on the, the complexity of a very complicated
systems level architecture that someone's building using tools
that have been developed to turn it into a creek into it, like,
into a journalist proof. Then there are certainly risks
there, but I think that It's going to be an evolving process.
You know, I do think that it's obviously there are set there
are some basic things you can do right now.
I mean, like you can make sure that at every layer your
technology stack has been fully audited and that, you know, it's
been written by the people who are the experts in their fields,
you know, like we're very lucky as to have our elbows on his
like, you know, to be able to like tables and but to help us
with like internal audits, which to be honest before we released
at our primary objective, reveal, several security.
Issues that we've done the resolved because this is
complicated beating a stuff and it's very, very, very easy to
get it wrong. So I do think that there's going
to have to be about a bit over a period of time.
Where once these kind of these Advanced abstraction layers, is
these programming languages start to become easy to use easy
to use and will widespread that they will need to be approached
with caution because I think like we see with the adoption of
cerium, sometimes the only the only cure is time but like a lot
of like I don't think I'm being. Unfair, when I say that like the
solutely smoke entrepreneur in which is widely considered to
be, you know, somewhat insecure like it's not, if you were to do
that, if you're going to rewrite a three more layering of them
scratch, you would design Selena very different way to make it a
lot more secrets program, but obviously back in 2015, you know
that the government was doing this for the first time, you
know, so it's so nobody was aware of the issues that would
result but that being said today in 2021.
I would argue that if you're going to write a smart contract,
so that is the best language to a certain because it's been
battle tested and he's barbecues exports is problems that have
been, you know, found out unfortunately sometimes through
through, through hacks and attacks, but it means that you
have this, this large kind of ethology of security practices
and principles of drawn. Now, we don't have those for
fers, you can start creating languages because they're
completely new in their infancy and that book will have to be
written. And there's a question about
like how many how much of that book is going to have to be
written is going to be written ahead of time through thoughtful
and careful, too. My hand is up assistance the
built and how much of that book is going to be written
effectively in cash from people, losing money through hacks and
exploits. And yeah, it's something that's
very much one on mind. But I think the only thing you
could do is what everything develop things Star Eddie may be
very, very considerate about the technique about the what changes
you're making to your cryptographic architecture and
you're getting the best people, the industry to work on it, you
know, sometimes even auditing isn't good enough or it's
questionable a because for example People like with the
kind of cryptography but developing, you know, like cute,
who can who can audit Advanced Auto plant site.
Because I mean like, you know, I can count the number of people.
I trusted you that on the fingers of both my hands and
they're all busy with their own projects.
So, you know, I think it's I think it's one of the point of
this issue sets that can only be solved with time and attention.
I got one thing as well. It's about the, the amount of
the protocol for kind of it. If you take the iPhone,
developer example, like how much of what they're building needs
to be in Noir and requires those kind of fundamental principle
guarantees. Like how much of it is can be
written a letter, one, kind of sin, in terms of like, this
person is allowed to see and it's about assembling that kind
of stack of that. I guess different kind of
languages and different pieces of technology to get the The end
product that the users need, I think trying to do that all in
kind of modern-day one would probably lead to a lot of
catastrophic bugs, but doing bits of it in water, to give the
Privacy, that's required bit, slow to see, bits of it, don't
need to be on chain. And I think there's a lot of
kind of learnings in the space generally from 2017, where
people were planning on putting social networks on chain and all
these things that were meant to be built on a blockchain that
don't need to live there. So I think it's about kind of
careful design of What needs to live where, and in the stock and
that will kind of evolved over time and more things will be in
the private end. That's kind of all that but it's
about making sure the right things are in the right place to
kind of do damage, limitation in case something does go wrong.
Oh, cool, like trying to mitigate the foot guns a year
where like, you know, but little make it harder to make an
accident that the, I guess. Such a question of this about
that appears long like the snark dsls.
Is that? How much do you expose like
snark optimizations? Like in the language?
Like, do you expect just want the big ones like
non-determinism or like if I know the answer to?
And if statement dude, I just have how can I use that?
Sort of computing. The answer or but I guess in
your case. It's actually a lot.
More like with all the turbo clunk and lookup table work.
So it's a general approach that you want to hide this
complexity, or you want to like, give it as available to like,
Advanced Developers. The first step is to hide it
away because it produces a simpler language.
We can then move now to the next phase, which is to gradually
exposed the some of the inner workings to to Advanced
developers who want to play around with it.
The first that we currently taking is in-house, we're
writing for the common algorithms that people use marks
for so, you know, things like binary arithmetic, Insurance
mistake, you know, hashing algorithms that have to cover
with my tech digital signatures that kind of thing.
We're writing our own highly. Optimized gadgets that use the
latest trunk and lookup table techniques that have a very,
very small number of constraints.
And then those are getting exposed in the language as
primitive of like like primitive up kids.
So, you know like in why you can you can do a shot of a
succession of another string and that shot.
If x is called will go be plugged directly into our
optimized widget. And so that's that's kind of how
we abstract away the complexity. But by giving people these
common building blocks that are already got pre-optimized.
And the idea is then that the all of the Plex heavy lifting is
done by they optimize widgets and what's actually programmed
into our is more is closely for you logic.
That ties these components together.
Oh, cool. That make sense.
Then like yeah, hiding is complexity by you building.
The expensive components of people are tempted to rewrite
themselves. Exactly.
Yeah, we saw it a lot. I mean, a lot of projects, kind
of put have their own, hash implementations, and kind of
itself wondering the same work and having a reference
implementation. I think longer term is
definitely the the right approach here, but it needs to
be open source and needs to be kind of reviewed by everyone.
And we're beginning to that step for it to be kind of clustered.
So what's your call to action to your audience?
And where can people find you? Yeah, I think right now if you
want to do private transactions head-to-head Tzatziki money and
over the coming six eight weeks. We'll be upgrading UI to enable
you to do all of your favorite device interactions with strong
privacy guarantee. So we're looking for kind of
feedback on the early version of that over the coming months and
for developers. We've also got a test that if
you want with your Keen to write out your own defy Bridge
contracts then head over to our Discord.
Links in the description after and we can kind of provide you
with some docs to help build some of these defy Bridges to
make these private interactions possible.
If it would be curious and I could beside, you know, had I
had to, I just go ahead. So I get 1/2.
Check out nor play around with it.
We're always searching for more feedback.
Thanks a lot for coming on and we look forward to you.
Having you guys on again, at some point in the future to dive
deeper into how things are progressing.
Thanks a lot. It's been a pleasure.
Thank you very much for having us.
It's been great and Dave. Congratulations on your first on
your first interview. How did you like?
It Banks was really fun. I mean aspects, one of my
favorite projects. I was a very cool to learn more
of the details of how they're getting private any threat.
Now. It's fun being on the side of
the podcast. Yeah.
Well you did an excellent job. So hopefully we will do this
many more times. Thank you for joining us on this
week's episode. We release new episodes every
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