C (3:04)

Today's topic is Ethereum Privacy, and here.

A (3:07)

To discuss are Andy Kuzman, PSC Lead.

C (3:10)

At the Ethereum foundation, and Oscar Torin, Technical Lead of the Institutional Privacy Task Force at the Ethereum Foundation. Welcome, Andy and Oscar.

B (3:17)

Yeah, thank you.

D (3:18)

Thank you.

C (3:20)

So in early October, the Ethereum foundation announced that it was establishing what it was calling the Privacy Cluster, a team of 47 researchers, engineers and cryptographers coordinated by Blockscout and XDAI founder Igor Baranov in order to establish privacy as a first class property of Ethereum. Explain what the Privacy Cluster is and what its mission is and Andy, why don't you start?

B (3:43)

Right, so I would say the Privacy Cluster is this very focused effort on trying to make Ethereum more private and bring it more and make it a default. So actually the Ethereum foundation has a long history into just bringing more researchers, engineers into this area. PSC, or Privacy Stewards of Ethereum is one of these teams who has been running from since 2019, exploring new use cases on privacy on identity at the application layer, privacy on reputation, privacy on many different aspects that I can go deeper later. But this is a renewed effort with more resources, with more people into just expanding and pushing this space of privacy. So the privacy ecosystem on Ethereum is already very big that it needed to have a bit more of like coordination, focus and focus on different areas that perhaps before we were exploring.

C (4:31)

And Oscar, why don't you explain what the mission is for the Privacy Cluster?

D (4:36)

Yeah, so IPTF is a new team, so Institutional Privacy Task Force. And basically what we're trying to do is we're trying to get institutions to build on top of public blockchains like Ethereum, specifically with the focus on solving their privacy requirements. That's basically the mission. And I think that also is very much in line with the recent changes at the Ethereum foundation with the sort of new executive leadership coming in and an increased focus on sort of ecosystem developments and so on. So I guess more broadly at the EF there is the protocol cluster which focused on L1, and then Ecuadev cluster and then the privacy cluster and IPDF. I guess it's a little bit between mostly in the privacy cluster, but also with some connections to the EcoDev cluster and specifically the enterprise team that talk to some of the biggest institutions in the world. And I guess what we've seen is that it used to be that regulation was the primary blocker, but nowadays or especially this year in the last few years, privacy is actually the main blocker in terms of these institutions moving on chain.

C (5:34)

Yeah, so privacy has become a huge trend in crypto, as I'm sure you guys are aware. And to me it feels like this wave started with zcash back in late September and then the announcement from the EF about the Privacy cluster came in early October and I couldn't help but wonder if it was sparked by what we were seeing in the market or if this initiative had been in the works. Just explain generally how it came about.

B (5:59)

So I would say that the renew focus just started beginning of this year, even with more. So it's been like a long brewing and again as I've said, the team has been expanding and growing and I would say it's just very nice timing and convenience that the market recognized the importance. So we were already seeing the need, the adoption, the force, I guess. So perhaps, yeah, it could have seemed like we kind of reacted. But in reality this team and you know, the blog post, the mission statements, the kind of the investment and the roadmap and strategy has been, you know, preparing all this year, more specifically in the last kind of like second half of the year. So yeah, it's just like nice coincidence.

D (6:38)

Yeah, I would echo that and also say like in the privacy space and related to Ethereum for the last seven years or so. So I think this has always been a very big focus, like privacy in terms of the Ethereum ecosystem and obviously projects like CCAST started early and done a lot of pioneering work, but I think the Ethereum ecosystem is like also been very early and building a lot of these kind of core technical primitives that are then being used and creating these kind of new verticals, if you will, like if it's CKID or CKTLS or CQMS and all of these things. And I think historically also going back to what Andy mentioned is that PSC used to be kind of its own organization. So it's already been like a massive effort funded by the Ethereum Foundation. I think what is new this year is that it sort of focuses missing that mission a little bit and focusing on privacy on Ethereum specifically and not sort of privacy broadly in sort of the ecosystem. So I think that is the main shift. So it was very much like a proactive thing. And whatever's been happening recently, that's more of a coincidence, I would say. Yes.

C (7:37)

Okay. I didn't, I don't think I knew that before. So Privacy Stewards of Ethereum started as a separate organization and then it kind of got folded into the ef.

B (7:45)

Right. It has always been part of or supported by the Ethereum foundation, but it operated a bit more externally. And I think that makes sense in that earlier years because like the primitives, like the kind of like creativity or most of like kind of like just needs or explorations where it made sense. But right now it made a lot more sense to kind of like refocus 100% on the Ethereum space and as broadly and also to just better connect and collaborate with the rest of the Ethereum foundation teams that existed.

C (8:14)

Okay. And so explain what PSE is and a little bit about the history.

B (8:19)

So PSE is a group of teams, collection of teams that focus on bringing privacy and its history span from I guess 2019, 2018, where it started with a small group of cryptographers and cryptographers, researchers and engineers exploring this new frontier that was zero knowledge proofs. So it started with experiments on private identities, primitives and libraries and applications in which you can prove your identity that you were part of a group without revealing all the details of yourself. And these experimentations were looked by the Ethereum foundation and basically started supporting this team into growing from 1, 2, 3, 30 up to I think almost like 50, 60 or 80 at some point. So it started as a team who we're kind of like one of the first teams exploring rollups, one of the systems that Ethereum uses for scaling. The first team within the PSE, the first people who explored CKEVMs. So also one of the main kind of scaling strategies that Ethereum uses, the team that supported TLS Notary, which is the pioneer in all that we call CKTLs. So all these space in which we can make proofs about TLS connections and it just like. And a bunch of other examples like those that basically just expanded the use cases that we can bring to Ethereum. So before PSE was broadly, you know, exploring all these use cases in both privacy and scalability. So that was what, what it used to stand for. And now it's 100% focused on privacy for Ethereum.

C (9:52)

Okay.

D (9:53)

And I would also say that it used to be that because so much of this was like Cutting edge research. And at the time we didn't even know if it was possible to. To do any kind of have any meaningful impact there. But I think what ends up happening is that there's been so much development in actually making these tools practical. And we see that now in the industry as a whole. And I think E3 Information has played a big part in making that even possible. And that also has led to this like, renewed focus in terms of actually bringing this into production and more having a larger impact beyond sort of smaller R and D toys kind of thing. Yeah.

C (10:26)

And then is the institutional. Institutional policy. Why do I keep saying that? Institutional Privacy Initiative is that. Or whatever it's called, Institutional Privacy Task Force. Is that within pse? Is that like a group?

D (10:41)

Yes, within the privacy cluster. And it's. But it also has close collaborations with, for example, the enterprise team at any couldev. Yes.

C (10:47)

Okay, and how did that get started?

B (10:49)

Sorry?

C (10:49)

How did that get started?

D (10:50)

Oh, so that gets started, I guess only two or three months or so. We have talked about it a bunch. I think what ended up happening is that as EVE sort of did the restructuring and there was more focus on being someone that, that institutions and enterprise would come to and have someone to talk to. It became very, very clear. And especially now with like stablecoin acts and things in the Genius Bill or Mica, like all these things are happening in the US and Europe and Japan, Hong Kong, Singapore, all this regulation, all this clarity that has led sort of renewed interest from institutions. And it's sort of painfully clear that the main blocker for them is like the need for privacy. So it became very obvious that we needed to do something about this because the enterprise team is great in terms of being able to have these initial conversations with these major institutions. But we have this very amazing R and D lab at PSE and all these amazing resources and we basically try to connect the two dots. So as historically it's been purely focused on more sort of individual like cypherpunk privacy. Now we're also trying to recognize that like there's other actors that need privacy and we can also be very useful to them.

C (11:55)

Okay, so let's talk about why it is that privacy is important in crypto. And you know, this is the kind of thing where sometimes I feel like people in the US in particular, they may not understand it, but I would love to hear, you know, why you think it's important for crypto to be.

B (12:13)

Focused on this mevo start just for individuals. Right. So one of the misconceptions that many people have even just starting in this space is thinking that by default crypto is private, which is not, or it's anonymous and it's not right, it's pseudonymous. So basically whenever you do an action on blockchains like Ethereum or Bitcoin or most of the other public blockchains, those actions get recorded forever. And that could be like legal risks, that could be personal risk, it could be like financial risk as well. Just leaking all your information and storing that in a blockchain where you cannot delete it, you cannot edit it, right? So that is just like a huge need for users. And I would say like all this cypherpunk movement, all this start of this industry came from self sovereign individuals and had really strong ties to privacy technology in itself. So as I've said, it has always been the case that privacy has been important but perhaps the tools just lack more maturity. Just in order to reach this inflection point of one, we need it and two it's possible, it's getting easy to use, it's cheaper to use and just basically it seems to be like the inflection point for individuals to use it. It's coming now, right? And we can see also the market and we can see kind of like the attention but at the end of the days it has always been the case where privacy and having the freedom and the power to control who sees what from your information and your assets. It goes back to the core values of these movement.

D (13:48)

I would say yeah and I would say yes there's definitely. It comes from these sort of cyberpunk origins and so on and sort of privacy and the connection to freedom and self sovereignty. I would say it's also very practical in the sense that if you look at various hacks that happen or for example ledger, when addresses got leaked, it had like very real world consequences in, in terms of like people's address being, being leaked and that was like led to actual physical attacks. So I think people are recognizing it's more and more important. I would also say that like when we took it, think about something like cash, if I buy a coffee here, they can't see my entire sort of my, my income or, or, or my assets. I just, they all they know is like this bare asset like cash. And I think we have things like banks, bank systems and they have similar properties but obviously they can be censored and they have all these other problems associated with them. So what we have with public blockchains like Bitcoin, Ethereum, they're Great in terms of being digital and permissionless and so on. But as Andy mentioned, they are sort of transparent by default, which means you can actually sort of track things and so on. And what we're trying to do is kind of regain those properties that are more like cash like properties. And I would also say to your point that it's maybe not as valued for a lot of people in developed countries like us, and I'm from Sweden, it's definitely seen as less of a problem. But I would say in lots of parts of the world there are more adversarial circumstances where it matters a lot more. And I think as the world is moving more towards usage blockchain technology, even you see attacks in like Paris and Miami, it's very much a real problem. I think people are waking up to that as more and more assets move on chain. And then there's also the institutional side which is separate in terms of what they need privacy for.

C (15:27)

Yeah, And I'm sorry, when you say Paris and Miami, are you talking about.

D (15:30)

I'm talking about like various attacks that happened and like wrench attacks. Yeah, yeah.

C (15:35)

Okay. And you know, for you said, you know, Ethereum has been working on this for a few months or really you said all of, all of 2025. Is that because like you're seeing demand from people or is it just like, you know, Ethereum is working from ideals and like what it would like to become or is it that like people are actually requesting this type of feature?

B (16:00)

So I'll say definitely both. So again there's a rich history of this, but it definitely seen a pickup about the right moment of how technology matures and how institutions demand it and how just in general there's like a renewed sense of need I guess in the ecosystem of just re emphasizing this property. So how I been seeing is like the Ethereum ecosystem has focused a lot and it's focusing a lot on scaling, I'll focus a lot about, on usability, on maturity, all the technical stack of the layers. And it just seems now that a good breakaway case again will be just turning privacy into a day to day actions.

D (16:38)

And I would say yeah, definitely on the individual case and on the institutional side we're definitely seeing a lot of demand. Like this is their blocker, they do want to move on chain and they want to move to Ethereum specifically, but they are not sure about how to get the privacy properties. So that is just like they need it. It's not a question of like oh maybe it's like they need it.

B (16:56)

Yeah, it's a table stakes requirement for institutions where if they don't either they don't meet regulation or there's like big financial or business risk. Right. Of losing all their practice at their client or. Yeah, yeah, yeah.

C (17:08)

And do you have a background where you worked with banks in the past or what were you doing before?

D (17:14)

So I worked in like Fintech. I come more from the protocols of research and infrastructure side. So I've been working on sort of privacy solutions and peer to peer protocols and designing more secure systems and applied synology proofs. We have people in the team that sort of have an extensive background, worked at Goldman Sachs for many years and so on. And then we also have the enterprise team that is also have very close connections to these institutions. So we're definitely more on this of tech and research side of things. But we have excellent support teams and great talent that allows us to talk to these major institutions and understand their language. And I think that's very much a challenge. And what we're trying to bring to the table is like taking these like business requirements and translate them into something that the technical community can understand as well as sort of the legal angle, which is also very important to understand. What does this mean for existing regulation and future regulation and how does that connect to technology? And that's something that I don't think anyone has really done and we're basically trying to demystify that a little bit. Yeah.

C (18:14)

And what's your background?

B (18:16)

So background in engineering, led the engineering management of teams in all sorts of development like Web2 and now more closely like Web3 and been working doing more product for various cryptography protocols and open source tooling that we have been building.

C (18:34)

Okay. So up until this point Ethereum actually has some privacy activity I guess you could say on Ethereum. So you know, how do the current efforts differ from the past efforts? And I have to wonder if part of the reason now that it's being brought into the Ethereum foundation is because some of the legal stuff around what happened with Tornado Cash has been resolved. So I don't know if that also played a role. It's kind of two questions.

B (19:03)

Right. Okay. So I would say like again like Tornado Cash is like one of the biggest protocols of privacy and there was a lot of unclarity and a lot of risk and fears and that definitely caused chilling effects on the ecosystem. But on the flip side there was also good understandings and maturation and even conversations that sparked of what does privacy protocols that can also be compliant looks like in the future. Right. So this is not only a conversation that the Ethereum foundation had, but rather the whole Ethereum ecosystem and Crypto ecosystem in broadcast kind of made a push and are continuing to push it for more clarity. So that is on one side. On the other side, it's just like there continues to be demand, right? So the more users, the more institutions, the more, I don't know, public governments as well want to use these public blockchains. There's an increased need of these tools. So definitely it played a role. But I will say in parallel, it's just like, yeah, broader demand.

D (20:07)

I would also say the technology has evolved a lot. So like TCAST was a very useful primitive, but we can do so much more now and more cheaper and so on. We have more expressive systems. So I think it sort of goes hand in hand as like there's been so much accelerated R and D that the things we can do now are way, way more than like just a few years ago. And that also impacts the kind of use cases that can be applied.

C (20:29)

So I'd love to hear you describe once what you're working on has come to its full fruition like, like in your head, you know, what's the ideal version of what this looks like? Walk me through, you know, maybe a comparison between like transactions today versus transactions in the future or, you know, certain applications or use cases that you think would be enabled once everything that you're working on comes to fruition. I'd love to hear kind of what the vision is.

B (20:57)

Okay, so maybe I will start by saying, like right now we don't have metadata privacy. So metadata privacy is like all the things that you leak, all information that you leak before you even do an action on the blockchain. So things like whenever you open a wallet, you are leaking your IP addresses with the information that the wallet address, the on chain address that you have and there's a correlation to that. You're leaking what tokens you're pulling from, the price, the gas. You're leaking everything at the end of the day into all this myriad of infrastructure that exists just to provide users most helpful. So current state is like, you're leaking everything. Future state is like, how can we give anonymity and confidentiality to all the requests that we do? And that is what we call within our cluster like private reads or metadata privacy. So every time you do a transaction or every time you try to read from the blockchain, you can do that privately. The other aspect will be like on chain privacy or financial which have many different use cases, right? So in Ethereum, because it's such programmable, you can do all these financial use cases, which I can talk in a bit, but you can also do all these governance use cases, right? So things like daos, things like voting, things like delegation and voting, those are all things that have been maturing over the years and that just basically by you know, keep adding, keeping like developing these infrastructures just makes sense to eventually have more corporations, have more local governments, local associations just leverage these other use cases on chain, right? So it's maturing and I would say like it will continue to solidify, increase kind of like the strength, the security of all these systems actually.

C (22:35)

Wait, so one question about the DAO voting because right now we can all see when it's like a whale who's dominating the vote or you know, whatever, right? In this world will that not be visible?

B (22:45)

It could be possible that you design new systems that are not only token dependent. So one of the drawbacks of basically one vote, one token is like basically whales dominating kind of like the narrative, they dominate the kind of like the outcomes of the votings in many of these daos. But there could be a system in which you just generate a zero knowledge proof of that you're an individual, that you have participated of a specific event and that gives you access to just one vote and then all mean like it's very hard or it's impossible to game the system and will actually be more like democratic processes. There are like many teams here building primitives called like zero knowledge, CK passports or CK identities where they're basically one to one map to an individual. So without disclosing the specific, you know, your name, your specific personal information, you can still prove that you can vote. So there are like many like new use cases that we can explore and that are currently being built in the Ethereum ecosystem that go beyond even financial use cases. So I would expect in the future there will be more local governments or even institutions and corporations using on chain mechanisms for their deliberation decision processes.

D (24:01)

And I would add also for example on the CKD side spent lots of efforts at PSC to even, even make it possible because a few years ago that was not something that was possible. Another thing is that you want to be able to do that on a client side. So for example from your mobile phone, because what you're trying to prove is that you have put your possession of a passport or something like that, if you upload your passport to a centralized server that then does that you Kind of lose the whole point. And that's used as like a building block in lots of system when it comes to like KYC or voting and so on. So I think there's lots of these small building blocks and the same thing goes for something like CK TLS that's used in certain on and off ramps and the same thing for ckvm. So I think there's lots of examples of these technologies starting out as R and D products and then coming to fruition and now sort of having a very real impact. I would say in the institutional side it's a very new team. It's only been on for two months or so. We have done a lot of mapping work. What we are trying to do is basically we talk to these major institutions, the biggest institutions in the world, usually a bit more on the financial side, but we also talk to some NGOs and governments and we're trying to understand like what is the precise business needs and requirements. And then we try to document that and make as much of it public as possible. And then what we try is like connect that to what is going on in ecosystem because the ecosystem has developed all these technologies and primitives and there are various vendors in the space and we try to make that very explicit, like here's the business use case, here's are the requirements as well as the legal requirements, like what jurisdiction are you operating under? Because it's very different in US versus Europe versus Japan. And then we try to connect it to what's going on in the Ethereum ecosystem with various types of specifications or standard ways of doing things, or mature vendors that are already providing similar solutions and create these kind of feedback loops where if a vendor or set up an approach is a perfect fit for institution, then we can say this to the institution and to the extent that some things are missing, we can also highlight that to the ecosystem and say this is what institutions are asking for. And I would also say the reason that institutions come to us and why this IPTF team sits at the Ethereum foundation is because we can be credibly neutral. We are basically responsible for the Ethereum ecosystem and we are trying to onboard people onto Ethereum and then we are neutral when it comes to vendor choices and so on. So that's like where a lot of the focus for IPTV has been. And we had like a few workshops with major institutions where they are exploring maybe a stablecoin or bonds or real estate or something like that. And they have a specific set of questions and it might be the Case that they get approached by like a BD function at some other, from some other ecosystem and they know some things but they might be a bit confused and we tried to like sort of clarify for them like here's what's happening, here's what's possible today, here are the trade offs, here's how you should think about it. And that's kind of how we approach it with the goal of eventually them moving on chain.

C (26:55)

Okay, so now let's talk about the specific, you know, approaches to technology. Like the different, sorry to privacy. The different technologies that you are, you know, considering and like how you would apply them, you know, which use cases you think certain technologies are more appropriate for or even you know, demographics potentially. Yeah, and I know there's probably trade offs with each one, so I'd also love to hear like how you think about that aspect for each approach.

B (27:23)

Right. So I would say like first is like mapping what are the use cases. Right. So for example, I will say like most people when they think privacy and crypto they think of private transactions like sending money to another one and private defi, at least within Ethereum because it's. And so within private transactions there is like, at least from like an initial mapping that we did like at least 12 different families or approaches of technologies. So things like mixers and shielded pools are technologies that are already like zero knowledge based and they have some properties that gives really strong anonymities depending on how much usage they have. Right. There are things like proof of burn which is more experimental, newer technologies that allows to kind of again do a private transaction but by using leveraging other type of primitives that basically doesn't need funds to be mixed together. It hasn't been battle tested. There still needs to be some maturity for this technology but it gives a very nice exploration about some different paths that the ecosystem can take. There is this other one called stealth addresses which basically generates a new address each time you receive funds and that is more similar to the UTXO model that maybe other chains are more familiar. And what this allows you is to unlink the different addresses that you have. So it's a bit of privacy for the receiver. So if you combine all these technologies and there's other ones, right, like FHE base or homomorphic encryption base that allows you to send funds and you know the sender and the receiver, but you don't know the asset and the amount that gives you confidentiality. There are others which are based on hardware considerations like TEE or trusted execution environment. So that allows Again to just be very programmatic about what you can share and what you want to encrypt and de encrypt and all the authentication layers and authorization layers. There is multiparty computation or MPC which is a way to operate into a reduced set of parties. So if your use case requires less amount of participants, maybe MPC is a good fit. And there is fully homomorphic encryption which is how do you operate privately or in encrypted data over a server. So all of these have kind of like are strong cryptographic primitives or I would say like families of technologies that are very powerful. Some use cases, if I were just to say kind of like the key differences or how you could kind of try to categorize them is like you will be doing trade offs across cost, how much you pay to use them across speed, like how much time you need to do a transaction to keep certain levels of privacy. The other one is user experience. So one are more complicated than others. There are things about trust assumptions like how many people need to collude to take out your privacy and privacy guarantees. And again like institutions or perhaps like other type of users might prefer technologies that they can kind of rely more on hardware that are more permissioned, that are more compliant versus other type of users, perhaps for daily payments, they just want something that is cheap and that is easy to use and they don't care to be like extreme privacy. And there are others which is like I don't know, high net worth transactions where they want like maximum privacy. But they run like on mobile phones. Right. So that is where like at least these different families of technologies complement to each other. And I would expect as we mature that we can better categorize and surface those trade offs. And at the end of the day probably combine some of these to have like end to end privacy which is right fit for the right type of user.

D (31:07)

Yeah, I would add to that like it's very much because it's applied cryptography. So there's a lot of various techniques and you can combine them in all kinds of ways. And it can get kind of gnarly when you get into details like if you have a roll up for example that the proving system you would use is very different from if you're trying to do some CKD solution that has to run on your phone. So it's very different depending on the deployment and also the specific like threat model and so on. And yeah, there's also things when it comes to more metadata privacy, if it's onion routing and mix. There's a lot of different technologies and I think as Andy mentioned, they sort of, they differ in terms of security and trust assumptions and, and performance as well as like just technical maturity as well. So depending on, there's a lot of very promising reaches are happening now that might only be actually widely deployed in a few years from now. And that's just a natural cycle of things. Just like stenos proofs used to be this thing that was more of a research problem like five, 10 years ago and now we're seeing it more and more widely deployed and you have similar things going on with FHC where it might take a little bit longer to sort of reach its full majority.

A (32:08)

Okay, yeah.

C (32:09)

I mean just listening to it all, I'm just aware that it's in a way it's like you're going to create so much optionality and then there will be multiple combinations that people can use to, you know, achieve their goal.

A (32:22)

Hey founders and developers, if you're looking to bring on chain trading to your product, wallet or platform, check out the new Uniswap Trading API from Uniswap Labs. It's your plug and play gateway to global on chain liquidity. No deep crypto experience required and no need to manage complex integrations or ongoing maintenance. With the Uniswap Trading API, you'll get enterprise grade on chain execution, combining both on chain and off chain sources for.

C (32:49)

The most competitive prices.

A (32:51)

Simply put, more liquidity, less complexity. And this isn't just any API, it connects directly to the Uniswap protocol which has securely processed over $3.3 trillion in total volume, which with zero hacks. So stop worrying about liquidity infrastructure and focus on building your product. Get access to the same liquidity that powers billions in swaps through one powerful API. Visit hub.uniswap.org to learn more.

C (33:21)

I actually wanted to work through some of the different ways. At least these were the ones that were outlined in the blog post to get more detail. So the first one was private reads and writes. Explain what that is and yeah, how it's being resolved or like the different ways that you're approaching that.

B (33:39)

So private reads, I would say is all this privacy that you want to ensure whenever you query the blockchain. So whenever you read the blockchain. So if this was a book, you don't want people to know which pages you are reading particularly or which sentences because you might leak information about who you are and what you are interested or what are your intentions. So again, we can also mention this as metadata privacy, Private rights will be whenever you take an action like you know, writing or whenever you do any action on the chain, right? So things like voting, things like delegating, things like purchasing NFTs, tokens, things like doing transactions, things like defi, all of these will have your actions recorded forever. So you would want these actions to have some level of privacy so they cannot be linked back to your address or your intentions or even your Persona. So I will call this more on chain privacy. And the third one or track that we have, at least within pse, we call private proving, which is all these elements and libraries which allows you to port data from web 2 into the web 3 world. So for example, if you have a driving license, if, if you have a bank account and you want to prove that you have more than certain amount of funds in your bank account, you can already prove this with technologies that we're developing and the Ethereum ecosystem as a whole is developing to port over these things and a bunch of other kind of necessary technical explorations, benchmarkings and efforts that we're trying to do to make these things usable for the day to day users. So not only these things will run in big servers and big computers, but rather they need to run in your phone, in your browser, in your laptop, in, you know, normal day to day, you know, hardware.

D (35:26)

I would say, and I will say this is also very much in line with what you see with blockchains, that is about like removing trusted third parties. And, and you can think of it almost like as a way to sort of scale society that as you have fewer dependencies, fewer things, you have to, oh, do I trust this party or do we need to have a legal contract or something like that? It's more that you're trusting the math as opposed to humans and policies. And as you do that, and especially as you do business across multiple jurisdictions, it sort of simplifies things because as long as someone has proven that this works correctly and you trust that the code is secure, you can actually rely on it as a building block. And that's a major thing with for example, private proving that you can have this data provenance. And instead of trusting some custodian, like some corporation to sort of deal with your KYC data, whatever, that easily gets hacked. We see that like every, every few months that passport data gets leaked or gets hacked or all these things, right? So we're trying to remove that and basically have these building blocks where we can create proofs and use that sort of to build better systems Essentially. And that's kind of similar to how Internet works as well. Where you started, everything was in clear text and HTTP and it was like a fight. The all the crypto wars in 90s. And then eventually everyone realized, oh, it's actually a great idea. We want HTTPs because that's how you do payments online. Otherwise you can't buy something from Amazon. And just like natural now people take it for granted. If you don't see sort of the green marker for hbs that is like now every browser enforces it, right? So it's just taken for granted. And I think we see similar things here with public blockchains and just creating things being more secure and something that you don't have to think about, it just kind of works under the hood.

C (37:02)

And out of curiosity, is that something that financial institutions are like interested in because then all of a sudden they don't have this honeypot of data or is it something that they're a little bit wary of because then it gives them less control?

D (37:15)

It's a good question. I think it depends on the institution. I think ultimately a lot of them, they have a very mature business and they, they know how this, the business works and the value they provide. And that very much fits into these building blocks because what they want, these are major, major institutions and they, they want a secure system. They don't want to just rely on, you know, some random vendor or whatever. They don't want all the transactions to be public. They, for them it's very important that like they're, they do issue a bond or trade it. They don't want to leak all that information and they want to have minimal sort of trust assumptions on, on that. They, I think a lot of the way, a lot of the, the way a lot of major users and companies think about is that they, it's like a question of risk, like what's the worst case scenario and who am I trusting and so on. And if you can remove this kind of arbitrariness and have it be like, okay, this is actually proven that this works, that's amazing for them, right, because they can create even bigger products that serve sort of their customers. So I think it very much fits. It's just a matter of like the trade off space looks a little bit different because they are operating in a regulatory environment. So they have to abide by all of that and they want to integrate with existing systems and they also have very high requirements when it comes to throughput and stuff like that. So this is like a different point in the trade off space, I would say.

C (38:25)

Okay, I'll cover the remaining points that were in the blog post. One is private identities. Can you talk a little bit about like, you know, what that is and yeah, why it's important.

B (38:36)

So private identities is like as we move more online and we need to prove certain facts about ourselves, whether that be like our age or our residency or you know, nationality. There has been even like massive push worldwide to try to gate access to different, you know, websites in the States, in Europe. And although it might come from like the right, you know, intention from many of these regulators, it does possess like a huge risk. Right. Whenever you add as, as we're talking about more kyc, like know your customer, like you are leaking your information everywhere and it's much easier to impersonate. It's much easier to know like, you know, risky details about your, you know, you online. So this push will be like, how can I make zero knowledge proofs in particular and prove specific facts about me without disclosing all this information without me having to send the document the picture on everything? Right. Whenever you check into our hotel, whenever you buy, I don't know, some airplane ticket, whenever you want to apply for a financial product. Those are very risky actions that right now we have normalized. But in an ideal state we don't need to leak all this information, we just leak, yes, I'm over 18, yes, I'm not from a sanctioned country or yes, we're whatever, right. So I will try to differentiate like the projects here, like Greenfield and Brownfield. Right. So Greenfield or Brownfield is like they're already existing. They're already identity digital identity schemes that exist in countries. So for example, in the country of India, the scheme is called Aadhaar or the Program and there's like 1.3 billion users, you know, having very used to just using their cards and verifying online. And that's not very private. So it's like how can we retrofit these systems and add zero knowledge proofs and other type of technologies so they can just proof online that they are a specific state or a specific vendor or whatnot without leaking all the rest of the information. So there's like some efforts there. There's a project called Anunadhar, there's projects for the in the country and Taiwan, there's projects in many different parts of locations. At the end, anything that is signed can be used as a building block so you can retrofit and add privacy to it. But then there's also like Greenfield, which what we Call is like governments who want to start from scratch or want to improve the current system. And a really great example that is the Kingdom of Bhutan and there's like a very forward thinking kingdom that basically is trying to provide the most secure, most self sovereign digital identities to their citizens. And they built their digital identity system on top of Ethereum. So they use Ethereum as a way of like trusted registry where you know, you can know that things signed with this key match to, I don't know, official documents from the Kingdom of Bhutan. But then these, these identities can be ported over in your can be carried on your personal phone and can generate proofs and can, you know, generate facts about it. Actually Google also released their own stack a few months ago, earlier this year and I know Microsoft as well. So there's a trend, right? There's a real need about having strong privacy preserving digital identity systems. And CK or Zero Knowledge is like a great technology to build things whether it's retrofitting or building from scratch. And I think Ethereum and blockchains in general are also a great thing as a trust registry or as an anchor point for, for many of these use cases.

C (41:59)

And what, so how does the identity get connected to the person? Because like what if my provable identity gets hacked and then you know like a random person who's not me, claims to be me but they have the proof. Like yeah, how can that.

B (42:17)

Right, that's a great question. And I would say those are all design decisions and part of like the schemes that you want to do. So two things that are usually used or done in this domain is like, one is like short lived or single use proofs or like and the other one is revocation. So if you get your passport stalled, you go to the embassy or you go to whatever police station and the same case with a digital identity and you, yeah basically file a report. So very similarly in the future, even in the current space you will do the same and you would have either a list of revocations, like a revocation list. So whenever the person who steal you, your identity wants to use it, that check will fail because now this specific identity will appear as part of the revocation list. And there's just like very clever tricks to how you can check that somebody has lost their passport but without leaking all the information from that person. And the other one is like in revocation there's also expiration dates. So documents also need to have some expiration dates because it's very common right that over the span of your year, of your Life you'll have to renew documents. So I don't think that will change that often. But those are the two techniques in the short lived proofs is like I need to prove that you own the original document and there are ways how to design systems so that I do a liveness check. And I also know that you know the person who is presenting this proof is actually the same person who is in the identity who appears, whether that be with zero knowledge machine learning to kind of make a proof of the photo on your document matches with your face without leaking all this information to the servers and the companies. So there's a lot of research and maturity that is going on but already concrete use cases that can be used in production now.

D (44:09)

And in addition to what Andy said, there's also this thing about and we see this also with Ethereum and Bitcoin and all this public cryptocurrencies that you have this key material, right that you have to keep secure. And I think it started off kind of it was a bit hard and you had things like hardware wallet but now the UX is improving more and more. So for example you can tie it to your device so you use kind of face ID and pass keys and all of these things. And there's more things like multisigs and you can lock it for a certain period of time and there's things like social key recovery where you can basically say if three out of my five friends or contacts, if they attest that this is me, I can get access. So I think what we're seeing is a massive level up in terms of user experience for how to deal with this key material. Because as we move into more and more digital world and more and more self sovereignty, it's very important that you sort of keep this secure. But needs to be useful by anyone not just like very people are very deep in technology and it's in a way way better state than just a few years ago. And I think you can see this in various types of wallet efforts and so on.

C (45:13)

Okay, so another one listed in the blog post is privacy experience. I don't even know what that means. So can you explain that?

B (45:20)

And right, so historically privacy has been a very difficult topic to use for end user for normal person in the street like just trying to learn how to use these systems, how to keep your keys secure, how to not leak information and even just using some of many privacy protocols. It's a lot of hassle, it's a lot of understanding the terminologies, understanding the trade offs. So Privacy experience is this effort of trying to understand where are we in the current maturity line and what are things that we can do to increase the user experience without degrading the privacy and the security that we have in the current system. So things that like analysis of the flow of just usability. Right. Things like terminologies and language as what you were saying, like icons that a few in small images can really depict key concepts to make people aware about the different trade offs and the actions that they're taking. So as much as privacy is a technology problem, it's also like a social adoption problem or like opportunity. Right. So we need to educate, we need to learn how to relate with these new technologies. So the human aspect is also like very important.

D (46:33)

Yeah, I think it's like it's partly like a literacy problem. Right, right. Just like maybe have people from an older generation just like how to use Internet, how to spot like fake news and like all of these kind of things that are like skills that you also need to acquire. And that's very much a part of it. Um, but also as Andy said, very much about sort of the use experience, like how do we make it easier for people to use. And traditionally there's been a bit of a disconnect because it's very hard to reason about privacy guarantees. Like that is a fairly technical and a fairly new thing to think about. So you have people are extremely technical and they talk a language like maybe hopefully not too much for your listeners with all this name dropping we're doing. But there's like a certain language that people, how people talk about these things and that's disconnected from how normal people live their lives. And you're trying to sort of make that connection. Part of that is definitely education. Part of that is like metaphors or like visual indicators and I guess ultimately having empathy for the end users and making systems that work better for them.

C (47:31)

And so now we get to the Institutional Privacy Task Force, which was also listed. And when I saw that I was like this one, like just even the words it sounds different from the other ones. And I realized like for in my head it just sounds like there's probably a whole component that involves like regulation and compliance. So it's like probably quite a different focus area from the others. So can you explain?

D (47:54)

Yeah, sure. It's different, absolutely. I would say the way you think about regulation and compliance on it, it's more like a different constraint. Right. So you use the same kind of building blocks and same primitives that sort of PC and other people in the ecosystem has been Panera for a long time and the situation is evolving. Right. Like I think a few years ago is really the Wild west and there was no regulation whatsoever. And it was really hard for established institutions that are operating in a specific jurisdiction to sort of even start to think about these things. But what we're seeing now is that more and more there are sort of some regulatory clarity and some attempts to make sort of these legislation, like legislative efforts and regulations fit better with sort of the sort of crypto native side of things. So we're in a much better spot now than we were a few years ago. There's definitely like a lot of work to be done on the policy side and so on. So it's definitely not a work in progress. Right. But for example, things like stablecoins and so on, now there's at least some kind of regulatory clarity. And that is just like another type of requirement. And I think you can accommodate both, especially with Ethereum being a sort of credibly neutral base layer. You have both these sort of more extreme cypherpunk hardcore use cases on top, but also these kind of more regulatory and compliance kind of solutions. And they basically coexist. And because the technology is so flexible in terms of synology, proofs and so on, you have way more affordances now than you had a few years ago. So you can actually design the systems to accommodate these more complex workflows where for example, auditors needs access and you want to make sure that you meet all this of regulatory requirements that institutions operate under.

C (49:37)

All right, so the last one listed as an area that you guys were working on as part of this initiative was Kohaku. Explain what that is.

B (49:47)

Right. So Kohaku is this good effort to try to bring privacy to wallets and make it much easier for wallets to adopt. So it's like a reference implementation and an integration about many different privacy protocols that exist currently on the Ethereum ecosystem into an SDK. So like a software developer kit that other developers building wallets or building other type of protocols can just take and very easily integrate it. And I think this is great because it just lowers the cost of adoption for privacy technologies for all these different providers and companies. And just like it's a good way to distribute technology, but at the same, at the same time it's like a good way to set standards, set a reference set of like a goal about what would be the perfect, most secure, you know, more private, most like, you know. Yeah, intention or effort into, like into the wallet, privacy so the intention would not be to, for the Ethereum foundation to run, you know, a wallet and try to get end users and try to, you know, get adoption, because that's much rather something that we would like the ecosystem to run and do, you know, business with. But it is a good effort to push into the right direction and implement primitives like that, the ones that I was mentioning and even the rest of the ecosystem have a point of connection and adding and help push standards. So it makes it a lot easier for builders to take these technologies and for users to then more quickly adopt all of these technologies.

D (51:11)

And I would add to that in this Web2world, developing a product is difficult and so on. And then you add this kind of bob blockchain and smart contracts and that component, it's like a specific set of skills, right? And I think the same thing goes for privacy tools. Like it is a very different world. Like how you write scenarios, proof circuits and so on. And how do you integrate that into a product? It's not trivial. It requires specific expertise. And if you have a wallet and you're trying to serve your users and provide some value, that is kind of scary because it's not always easy to do that. So I think what Kwak is also doing is showing how you can do it. It's showing examples of it. And I think another thing is that there's all these amazing resources and open source products and so on that exist in the space, but it's not always obvious to people like, how do you put them together and what do they actually provide in terms of user experience? And what Grahag is doing is taking all of these primitives that have been developed for the last few years and putting them all together into a package. People can see visually how this is actually fit together. And I think that's very exciting for end users as well as wallet developers because you can see, oh, this is actually how you combine them. And actually I think we see some of the things, but in a completely different domain when it comes to institutions.

B (52:19)

Where.

D (52:22)

Ethereum ecosystem is such a broad, it's like a jungle. There's so much going on, right. And they don't know how to make sense of it all. And how do you put these things together? So that's also what we're trying to help with in this mapping effort and showing here's how you combine all these things and here's how actually this provides a superior experience to whatever you're considering.

C (52:40)

So, so I want to zoom out a little bit and look at privacy and crypto generally. And I was kind of curious, like, you know, as we mentioned at the beginning of the show, things like zcash suddenly just, you know, everybody, you know, it's like all the coins are going down, but zcash, zcash is not going down. Like, you know, we've, we've seen that the last few weeks and I don't know, like, you know, traditionally I think like most people have thought Ethereum is kind of competitive with these other all layer ones where, you know, it's like this whole smart contract competition. But do you view something as Z? Like zcash is just fundamentally different because it's like more like Bitcoin, it's more focused on payments. Or do you think that Ethereum is also competing with that? Or do you feel like Ethereum's kind of creating something brand new where it's like bringing privacy to smart contracts and there's like many more applications or just like, how do you think about, you know, what you're seeing in terms of other privacy efforts in, in crypto and where Ethereum fits in with that.

D (53:37)

So I guess this brief on CK specifically, I think that they are very seekers and Ethereum are very much philosophically aligned and the communities, especially this privacy part of the Ethereum community, and it's like a lot of collaboration in terms of actual code and research and so on. So I think they are sort of seen as like very friendly to each other. And I think the space of like it's so big that I don't think that it's not competing. There's sort of, if anything complementary and secrecy specifically is focusing on payments and so on, whereas Ethereum first of all, the base layer is still transparent and so on. So a lot of private solutions are more on top. But Ethereum obviously has home to DeFi and stablecoins and all of these other types of applications. So it's actually somewhat of a different niche. But even to the extent that there are like payment protocols on top of Ethereum, I think it's, you know, it's, they might use similar technology, but I don't think they are like actively competing because this space is so large. Yeah, that's, I guess how I would frame it.

B (54:39)

Yeah.

D (54:40)

Oh, sorry. And going back to you mentioned, so I would say also there's definitely been some movements in the markets recently. I would say that when looking at something like ccast, I think fundamentally that comes from like very strong R and D and making actually real progress just the last year and so on. I believe you had them on the show recently and I think that's sort of the origin of it and then everything else happens after.

B (55:05)

Yeah, and I would say like it's well deserved. Right. It's like a good team, a good ecosystem, like very value line and just like very strong technically and they have pioneered zero knowledge proofs, a lot of languages to write all these things. But yeah, fundamentally just took different paths. So I saw Sean Bowie also showing kind of like the philosophy that they were taking add privacy, then add usability and then scale it. So right now they are in the part of scaling and that is where their new papers, new proposals for upgrades go through. Whereas Ethereum has much more focus on decentralization and then usability and all these rich history of explorations and new use cases that started on Ethereum. And in the past couple of years I've also been focusing on scaling. So I would say like right now and now we're like super pushing hard on privacy. So I would say like there's a lot of things that we can learn from the ZCASH ecosystem. There's a lot of things that now they will want to learn from us as well. How do they scale and how do they bring usability from like the layer 2 centric roadmaps to like other, like more core engineering, distributed engineering, like skill sets. So yeah, I would say like it's great and as Oscar was saying, there's like this is a big market and we're not like against each other but rather trying to capture the traditional technology web2world is how we try to frame it.

D (56:27)

Yeah, I would say it's symbiosis. Simple. Win, win.

C (56:29)

Yeah, okay. It was a very Ethereum like answer, like kumbaya. Yeah, well, so I also of course wanted to ask because Ethereum itself has had many privacy efforts, whether it's like different teams that work like in the Ethereum ecosystem. So I wondered what the EF's new focus on privacy means for these more long standing privacy apps like Tornado Cash or even some of these chains. Like I'm sure you guys heard about the new ignition chain on Aztec. There's Starknet, like there's you know, privacy. It's not like it doesn't already exist in Ethereum. So you know, what does the new focus in the EF mean for these other efforts?

B (57:09)

Right. So I'll start by saying that it's just, you know, a lot of collaboration, a lot of symbiosis, like we do have direct lines of communication with all of these teams in the Ethereum ecosystem because we want to help them and we want to see what they're thinking, what is progress, what direction we're all taking and just experiment with different primitives there I do see though, which may be a question underneath is like how does if Ethereum layer 1 becomes private, what happens with privacy focus or layer 2s? And what I always say is layer twos continue to be key for the Ethereum scaling roadmap for the ethereum ecosystem. And layer 2s would always have an advantage in terms of innovation just because they're smaller, they're more concentrated teams, they can't just stop and start a new even from scratch architecture that greenfield advantage that they have. So I love that part and I love seeing Asic, Midnight, Starklin and many others doing privacy push either complete architecture to be privacy focused or within a generalized architecture try to add privacy to their stack. So I think that's, that's great in general. And Ethereum also needs that on the layer one, right? Because there's like institutions and users, real humans that we also need to have some levels of privacy. So in general I will say it's a lot of collaboration. It does mean that they have a partner that we can learn more about primitives and libraries and SDKs and programming languages, that we can accelerate the formal verification, accelerate the maturity of all these technologies. So just like accelerate the adoption and use cases in Ethereum layer 1 and in layer 2s in general.

D (58:42)

And I would say in general EF tends to take a more subtractive approach. So if the ecosystem is solving a problem, there's no need for us to meddle with it. Right? We're trying to work on the things that are overlooked or we see there's a need for and maybe there's not enough incentives for other people to work on it and we can sort of act more as a coordinator and push have targeted R and D towards areas that are maybe not a little bit overlooked and so on. And from institutional point of view, I do think there's a lot of appetite for very customized if it's having a drone L2 or whatnot. And that's kind of also how the Ethereum roadmap is shaping up in terms of allowing these different kind of app L2s or whatnot.

B (59:19)

If I can give an example, there are like 20 something, 30 something teams building zero knowledge virtual machines, CKVMs and in a way they all claim they theirs are the best and the fastest are the most scalable. So efforts like just benchmarking DC QVMs makes a lot of sense. Now. There have been historically a lot of benchmarking for scaling, like how many transactions they can do per second, how big the proofs or how many Ethereum blocks, how fast they can be proven. But now we're also doing benchmarking for how can they run on your phone, like client side proving. So doing these efforts in tandem with all the R and D and experimentation and innovation that all these things are bringing really helps accelerate the development of technologies and eventually, you know, the adoption for, for normal users as well.

C (60:06)

Okay, so I want to turn back to the tornado cash thing because obviously, I mean, it was huge for Ethereum when everything happened with ofac. And you know, it was like right before proof of stake. And then you saw like what was happening where the stake was like by, I forget, it was like more than half of the transactions were being censored for the OFAC thing. And so I just was wondering, you know, like now, obviously it's a few years later, things have changed, but, you know, what is your current view on, like, you know, what you kind of need to keep in mind when you're building these privacy, you know, efforts, like from a regulatory perspective or I don't know if you've been engaging with different regulators and you kind of already have a sense of like how they're approaching it or what they're, what they think about it. But you know what, from that perspective, what are you kind of keeping in mind as you build?

D (60:58)

So going back to, I remember when that whole thing was happening. At the time I was running an R D lab and we had researchers working on similar types of protocol and it had definitely had a shilling effect. Like people were afraid of working on certain technology. And I think this is just how whenever you have a disruptive technology, there's always going to be power struggles and figuring out like, how does this work? And it's code law and all of these things and it takes a while to shake out. And we saw this in the 90s with the first crypto wars and we saw this with tuner cash. And we also, obviously a lot of things are ongoing, but there's at least been some progress there on the regulatory side. So I think that will kind of always be the case whenever you have some kind of really disruptive technology, which Ethereum and public blockchains are. I would say in general, the way EF thinks about it is that we are more, I guess, on the R and D side of things. We're not necessarily running Things in production, that's not our role. We're trying to facilitate and sort of enable that. But that's usually sort of different products that would take different types of approaches. I would say in general, the ecosystem as a whole has I guess learned a little bit from it. And there's been definitely various conversations with regulators that individual teams have had to understand how they can design their systems better. But obviously people will choose different points here and how adversarial they want to be and so on. And that's just part of, part of Ethereum being this credibly neutral infrastructure and then people making different choices on top of it.

B (62:24)

So just to add to that, there is a spectrum, right? And from one side is like the most compliant, the most like government, the most like, you know, practical or responsible privacy. And on the other side it's like the most cypherpunk, the most permissionless. And in a permissionless layer, anybody can build anything at the end of the day. So as Oscar was saying, both will coexist. I guess it's just like recognizing that there will always be these power struggles, these different differences of interpretation. What was illegal at a time from the states for a specific government or administration won't be for the next one. And it's not for different parts of people in the world who also wants to use privacy. So again the strategy will be to just continue to be the credible neutral layer for interoperability and for know, teams, governments, corporations, just to be able to transact more freely.

C (63:16)

Okay, and one last thing I just want to ask about was, and this is like just from a purely practical perspective, like I know zcash and I think Monero, they had like the private viewing keys where you could give a party like you know, the ability to look at your transaction. So is that like a common feature that you guys are thinking about building in or.

D (63:36)

Yeah, I would say that's definitely one design you have. And I think it depends that when you're talking institutions there are different requirements depending on what regulatory authority you're talking about. So that's definitely one thing that can be chosen. Another thing is sort of if you want to have some kind of audit log and other is if you need some kind of live access. So I would say it depends a bit on the specific jurisdiction. Yeah, so I think there's different design choices you can make. And viewing keys I guess is one example. I know Aztec have also different ways of doing this and that's like one example of maybe a slightly richer fullness than what used to exist. And I guess that's partially in terms of responding to demand from the world. Yeah.

B (64:13)

If I were to add more specific examples like viewing keys might not prevent someone using a privacy protocol. It will be after the fact. And that is what regulators usually are used to or auditors. Right. But there are things that can prevent before it. For example an allow or a deny list, like these addresses, because they have been marked as possible hackers about this specific protocol cannot use are now part of the list and therefore they cannot use this privacy protocol. And those are like self regulation mechanisms that the ecosystem has found that I think are very much more appealing to kind of or could be more appealing to regulators and jurisdictions. Right. So there are other aspects like you know, zero knowledge KYCs. Like if you have done KYC with a specific institution, how can you take this over and just allow people who have, you know, KYC before? So there are, there are things there, there are things like KYT or know your transaction which is like a risk score depending on specific models. So there's just like a very rich design space about when you, when you're thinking about. Yeah, just compliance. It just depends on which jurisdiction you're trying to be complied with and what are the, you know, the needs, the requirements. And there's like, it's very expressive technology. There are many ways in which we can build that.

C (65:30)

So can you give me a sense of the timeline here? Like when do you think all of these things might be implemented? What do you think will be implemented first? How quickly might we see these things being implemented? Yeah, right.

B (65:43)

So I'll say a statement, like a prediction. I'll say like in six to 12 months we're going to say Ethereum has solved the private transactions in the ecosystem. There are just so many teams doing all these trade offs and I have no doubt that we have solved these.

C (65:59)

And when you say solved you mean like you have the technological way of doing it but maybe the implementation hasn't happened or like.

B (66:06)

No, the implementation, the production is already, it's only on the adoption phase. Right.

C (66:12)

Okay. And this is like for layer one.

B (66:14)

Transaction, layer one transactions. That is my protection.

C (66:17)

Wow.

B (66:18)

Yeah, I, I'm sure like next year we can talk.

C (66:20)

Let's make a prediction market for it.

B (66:22)

Let's do it, let's start it. Like I'm very convinced that this, this will happen. It's just like seeing the strength, the technologies, all the different approaches. There's no doubt in my mind in 6 months, 12 months and like even.

C (66:31)

Like been put, you know, into an upgrade and. Okay.

B (66:34)

Wow. Yeah, yeah. Awesome wallet. So many things.

D (66:36)

I would also emphasize that, like, a lot of things are already in production, right? So like, for example, railgun, they have, I think, $4 billion TVL or something like that. It's like private defi. So that already exists, Right. And you have similar things like CKID that are used. I think ASTEC used it in their recent effort. They're doing. So that's already live. And also CKTLS is used for on and off ramps in a permissionless fashion. So this is like obviously taking audience already live. Right. It's just a matter of, you know, tweaking and growing the market and so on. In terms of institutions, like, there's already like a lot of institutions building on top of Ethereum. There's, I think things like private stablecoins is definitely a hot topic and I think we'll see more and more of that over the next six to 12 months. And then it's just a matter of like, products facing it out in terms of products and like slightly larger size and then more deployments. So I think it would be like a gradual shift, but I think there's a very much big appetite for it. And despite the regulatory clarity, I think there's like a lot of people, parties that are very excited to sort of, you know, be early on it.

C (67:35)

Okay, so I need to understand this. Once this all gets implemented, then what is it going to look like? Because, you know, right now we're so used to like, going on Defi llama and looking at TBL and we can, you know, look at like an ICO and we can kind of pick out like, different addresses and, you know, there's like those little like, bubble maps and like, all that. But like, what do you. Do you think there will just be a mix of public and private transactions? Or do you think everything will kind of end up going public? Or like, like, what does that world look like? Because, like, for me as a reporter, I'm like, oh, shoot. Like, am I going to be able to look things up that I want to look up or like, yeah. So I'd love to hear what your vision is for, like. Yeah. What that will look like when it's all finally implemented.

B (68:13)

Right. I'll definitely say that they will coexist. There will be private and public transaction. There'll be things where we want the public property. Right. We want like, auditing and traceability and like, I don't know, ensuring like, things happen. And it makes sense in that case, if we think, like, Other examples like in zcash, I can remember the exact numbers, but I, I think like 25% or 30 around that is like private transactions. So it's like it's not going to happen overnight and there are reasons why you will want to have that flexibility.

C (68:45)

But like I can't understand why anybody would choose a public one. Like once, once it gets implemented I'm like, oh, I'll make everything private.

B (68:51)

Right?

D (68:53)

Yeah.

B (68:53)

An example.

D (68:54)

Yeah, I think it would be a gradual shift. Right. And like looking at for example institutions, I. A lot of the reason they want to move to Ethereum is in terms of access to liquidity and the fact that it's like a chain with 10 years of uptime and so it's kind of a, they can, they can kind of trust it, it's not going to go away tomorrow sense of persistence and being like a credibly sort of neutral settlement layer. And like if you have defi system and you want to access that liquidity, there might actually be reasons that certain things are public and so on. And you might mint for example a token on L1 as a kind of public thing and you're going to be, have access to all this like rich defi ecosystem and certain fortices might take longer. So for example, you can do maybe private payments, but some kind of private trade thing might take longer because it requires like FHC to bring this for full fruition. So that would be like a stepwise sort of, I don't want to say migration path, but stepwise use of like more rich affordances.

B (69:53)

But to give an example, maybe a country does, or a local government does, want all their citizens to be able to audit how they spend the money and want it to make it private. So anybody in the world can see like this was sent to this transaction and this was the budget that they received and all of that. So there are real reasons why someone would just want to keep certain things public.

C (70:14)

Okay.

B (70:15)

Similarly to how we do in social media. Right. Some things would just send over DMs. Some things. Will you make a post for everybody to see?

C (70:22)

Right, that's true. Okay, well, is there anything I didn't ask you guys that you would want to mention.

B (70:32)

Should. I think.

D (70:35)

I think that comes to.

B (70:37)

Anything, maybe just like final thoughts?

A (70:39)

Yeah, go ahead.

B (70:40)

Okay, so say the privacy ecosystem on Ethereum is very strong. There are like Hundreds, like over 200, 300 teams building privacy on the Ethereum ecosystem in all layers of the stack. So it's like a very rich push that is happening right now very organic. It's not a reaction. It's been like brewing for years and there's like a long tradition of it and because of the programmability I think we're going to be able to do everything that we can imagine like other blockchains have achieved. It might take longer. It's true that the current layers are all public, but, but that does not mean that we can achieve the same levels of properties or use cases that other blockchains have achieved. So I'm very bullish on Ethereum, very bullish on its privacy ecosystem. And it's just right now a matter of executing. There are still long term research problems that would just make things more expressive, more scalable, perhaps different affordances. And there continues to be very rich investment in those areas by the whole ecosystem, new companies and even the Ethereum Foundation. But yeah, there's no doubt that we're executing and that there's already production grade projects and alternatives that you can use and that there's just going to be an explosion of even more coming over.

D (71:52)

I would, yeah, to add and echo that like I think two things, like one thing is like just as you know when you have public blockchains that came and before that Internet and credit card payments, it enables these like rich set of use cases and so on that we couldn't even think about before. And when we talk about sales proofs or MPC or fhc, all of these types of technologies, you can think of them like programmable cryptography and it's a similar thing where the people in this space have been deep in for many years. The way they think about trust and how to build this type of new systems is very different from how someone, for example a software engineer at Google would think about it. And it just enables completely new types of new ways of interacting and sort of creating proofs about things and composing technologies. And I think we'll see that will take a long time, not just in terms of technological readiness and so on, but just in terms of mental models and understanding what this technology allows. And I think that will play out over the next decade. Just because the rest of the world needs to catch up. That's one thing. The other thing I would say is that on the institutional front institutions want to move on chain and they need privacy. So if any of your listeners are representing institution or maybe a vendor working in space, I think that's we're great sort of come talk to us because we want to help and we are trying to help businesses move on chain and making sure the privacy solutions are addressed. So. Yeah.

C (73:13)

Yeah. Honestly, I could imagine if I were an institution that, like, in my head it would make sense to use Ethereum, because it's like, it's not only the uptime, but it's also like, if one of my competitors is working on a chain, then, you know what I mean? It's like, I'm not already directly competitive with Ethereum, so it sort of feels like this is like a neutral ground.

D (73:32)

Yes.

C (73:33)

So, yeah. So I could see it working out.

B (73:37)

Well for your efforts and liquidity. Right. That is also like a very good network effect and just Mindshare and EVM standards.

D (73:44)

Programmatic tooling. Yeah. Developers and just in general infrastructure. So I think a lot of people there who understand technology are like, well, we want to use Ethereum, but this privacy thing we're not sure about. So as long as there's ways to address that, I think it's definitely the right choice.

B (74:01)

Yeah.

C (74:02)

Yeah. All right. Well, this was super fun. Thank you both so much for coming on the show.

D (74:05)

Thanks a lot for having me.

B (74:06)

Thank you so much. It was a pleasure.

A (74:09)

Unchained is produced by Laura Shinn, with help from Matt Pilchard, Juan Aranovich, Margaret Curia and Pam Majumdar.

B (74:15)

Thanks for listening.