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Nothing to Hide: On-Chain Privacy in 2026 (The Protocol Roundtable)
Recorded: March 26, 2026 Duration: 1:05:48Space Recording
Full Transcription
Roundtable between more than six participants from different projects in the space.
So first of all, I'm Ivor from Protofire. I will be your host today.
And we have also Rado, who is also from Protofire.
And today we're going to speak about one of the, I would say, most interesting topics in the space.
So privacy. Where are we now in 2006 with privacy how it looked like on different chains
and with different projects and where we are going from here yeah it's been quite of a buzzword in
we can say in the last couple of months so let's see what what the future brings us
when it comes to privacy so we are going live live on X and LinkedIn at the same time.
So if you any one of the listeners have some question, feel free to write into the chat and we will see at the end if we have some time and answer the most interesting ones.
So, yeah, first of all, I would like to give the mic for our guest today. And maybe we can go by
the order of the list here in the chat. Yeah. And just quickly tell us your name, your project,
and you can tell us the problem that you're solving in the privacy space in Ascento.
Yeah, Brian. Yeah, you can take that.
Hey, first of all, thanks for inviting me. Happy to be here. And yeah, Brian Butler. I'm at Polygon
Labs. I do partnerships over there, specifically in the United States. And I was formerly at Visa,
where I was on the crypto team, helped scale stable point settlement from 50 million a year
to 5 billion a year, and also helped with stable point in cars with the bridges,
range, reach of the world. And for obviously our blockchain at Polygon,
we need to solve privacy in the sense of
it's obviously a growing narrative.
Institutions are getting into the space
and then for them to feel more comfortable, right?
There needs to be compliance and privacy in place.
And so adding some type of technology
on top of Polygon's existing chain
to effectively toggle privacy on is essential,
but happy to be here, excited.
Cool, thanks. Thanks, Brian. to effectively toggle privacy on is essential but happy to be here excited cool thanks thanks brian uh luke how about you
awesome yeah so i'm my name is luke um i'm the coo at secret network uh secret network is a layer
one blockchain um and we're focused on confidential computing.
We started as for Web3.
We've since evolved over the last year and a half or so into AI as well.
So we provide privacy preserving smart contracts, interoperability between
blockchains and also confidential computing for AI inference and agentic flows.
Great, thanks, Luke. Yeah, let's continue. Hastic.
Everybody, it's great to be here on this panel. I'm theso at lunar digital assets it's a full stack blockchain venture studio
also co-founder of litvm we're the first litecoin layer two fully endorsed by
litecoin foundation and charlie lee naturally i'm a supporter of litecoin's mimblewimble
extension block technology everyone calls it-Web or optional privacy.
But I'm more of a privacy
supporter, not directly
building in privacy.
Cool. But you have the most
privacy name as we just
talked about.
Cool.
Justin is one of our partners yeah nice to have you here
yeah hey guys nice to be here um privacy is something that i'm really interested in and
have been for many many years um i'm one of the co-founders of uh telos we've been around for like
eight years now um it's been a struggle over the years uh to get adoption and one of the things that I believe is that privacy will bring that adoption.
So yeah, it's really critical.
So yeah, excited to be here and join in.
We're actually launching our privacy layer tomorrow, so that's exciting.
Great, great to hear you.
Darren, how about you?
Hello.
I'm Darren.
I'm head of ecosystem at QuickSwap.
Really bad at intros.
QuickSwap is a place that you can swap quickly.
That's usually it.
I'm more on the side of Aztec where quickslop isn't necessarily building strictly in the privacy
sector more of a privacy advocate yeah thanks yeah but it will be also great to hear from your point
of view as maybe more the user's idea how how we see things are moving and joel yes please hey
everyone i'm joel i run business development and marketing for Dash,
which is the oldest active cryptocurrency
to have any kind of built-in privacy features.
And what we're hopefully doing
is bringing sovereign transactions,
which, of course, includes privacy,
to the masses, which is a very easy user experience
with usernames, contact lists,
encrypted metadata
for transactions all at the protocol level and we're doing a pretty massive privacy overhaul
incorporating zcash's orchard shielded technology within the next hopefully few weeks
and then after that uh bringing it to tokens and assets as well so hopefully we'll have an
encrypted token ecosystem cool cool thank you everyone yeah
we're really looking forward for this one yeah especially when we hear from where all of all of
you are coming from yeah uh so yeah then let's start with with the first topic so uh let's open
the discussion about how why do we see as the strongest use case for privacy so it would be nice to hear
not only the the story about surveillance or any kind of that's that type of solution but more on
a particular use cases where people and end users can get a real benefit by having privacy, maybe in some earnings or any type of other
metric that we can estimate in a sense that will make privacy make sense.
So maybe look, we mentioned that you have quite a bit of experience and long years in
the space.
Maybe you can start with how you see it.
Yeah, I mean, it's a great question it's a
it's kind of there's so many uh so many to be honest i it i really say it's uh more like this
the you know the we've always had the dream of tokenizing everything bringing everything on chain
uh tokenizing the world and that dream dream only becomes a reality when privacy is adopted
and built into the foundations. There's just no way that the institutions actually, you know,
bring all of their things, including strategies and assets on chain without being able to protect it, without selective disclosure.
And so, you know, I guess if we want to focus in on one, you know, I think everybody can
think of the value of financial or transactional privacy, right?
The ability to pay people.
And you can take that into payroll.
But one that's maybe a little more outside of the normal spectrum,
at Secret Network, we've recently, over last year,
we built out confidential computing for AI.
So we call it Secret AI.
But it essentially allows you to launch a full LLM model, an AI model inside of an encrypted environment
so that you can start using AI and protecting the sensitive data.
So you can actually make, for example, an enterprise use case.
for example a an enterprise use case you can make a specialized trained model just for your company
and feed it all of that sensitive data that you don't want to give to open ai or google
and have it leak out and and start training other people's companies you can just keep that for
yourself and still gain the the power of ai to start scaling up your efficiency
within your company and things of that nature and you can also take that into the agentic workflows
so not just inference but you can start allowing agents to start transacting in an end-to-end encrypted manner so you can start seeing those on-chain
payments take place without all of that, again, sensitive strategy being leaked to the world.
So I really love those use cases for privacy, especially right now as AI is blowing up.
for privacy, especially right now as AI is blowing up.
You know, I see people launching OpenClaw,
agents everywhere, and they're giving all of their information,
their calendars, their emails, and not just read access,
but write access to their computers, like the root.
And without protecting that, that's insane to me. So using something like Secret
AI, there are others, it doesn't have to be ours. But using a privacy-preserving environment
for it is the only kind of sane way to go, in my opinion. I won't be using OpenClaw without it.
Either that or a local model.
Definitely not web-based or cloud-based.
But yeah, I'll stop there and pass it on.
Now, AI is definitely one of the most interesting topics.
And I think people are starting to think about privacy much more
as we are speaking with different LLMs every day.
So we have anyone else on the same topic here?
The use cases that you see the largest problems.
I'd be more than happy to chime in on this.
Obviously, the financial thing is the big one.
No one uses payments without a minimum viable privacy in the rest of the space, they won't hear.
But for other things,
when we're trying to think about Web3, for example,
we're hopefully building a lot of web infrastructure
and apps, et cetera, on fully public decentralized rails,
the problem being the fully public part.
And so there's a lot of use cases
where you want something to be out there on a blockchain
accessible to the entire planet, anyone without any permissioning, but then you don't want
that to be completely just plain text for people.
And so like one very simple thing, we're debuting sort of a social media slash blog,
et cetera, site that for, for example, the blog function, we also have an
encrypted side of things for a kind of, let's just assume something like a sub stack, right?
Where you want to pay to subscribe, you have paid subscribers, and you don't want to necessarily
just have it all out there for free and just hope that people will pay you. Sometimes you want to keep private
content feeds for individual people. Another thing, for example, with a store functionality,
if you're communicating with the seller about, oh, I received this, oh, where, you know,
what's your address? Like if you want to send your shipping address to an e-commerce platform
that runs on decentralized rails and then the blockchain in plain text tells the whole world where you live.
Like that's just not going to work.
So we do need privacy for some of those things as well.
Makes sense.
Yeah, thanks.
And if we maybe try to think more about in particular the WebTree or maybe the DeFi spaces,
some of us more on that part of the of the stack yeah what do you
think guys where there we see the largest use cases do we have i don't know yeah i could jump in there
sure yeah just just some thoughts high level you know privacy is a fundamental human right and
what i'd love to see is uh and what i think only the only way it makes sense I think Luke kind of
touched on this as well is that you know all these institutional players that are coming on board
I think like it's Sergei Nazarov who says quadrillions you know if you looked at all the
money in the world and see how much money is about to flow on chain you realize all these institutional
types are not going to build uh bring their billions and trillions and quadrillions of
dollars without some type of privacy uh and so if we want to see everything interacting and
interacting on chain then we're going to need you know privacy um but I of course I have to shout
out litecoins optional privacy for for payments which is uh you know something I really like as
well yeah but as you mentioned uh yeah Justin go ahead yeah if you want to yeah um yeah I kind of want to almost turn this question on its head because I guess the question to me is what isn't good for privacy or what doesn't require privacy rather.
interacting even with DeFi and most of the things that we do in the real world like paying for goods and services, payroll, you know, all those things are obviously in most cases better private, right?
And so I wonder if like in Web3, we've spent like so many years like building out public transactions and there's really not much demand for it.
So I guess like I almost want to ask like, what are the use cases that we want to be public?
Because the rest, everything else to me seems that it would be best private as it has been for hundreds of years you know
um so yeah that's i guess my opinion on use cases yeah justin jumped in just before me there i mean
obviously the biggest use case is keeping all of your fingers and toes um like you don't go into
like a cafe uh buy a coffee and then the person that you just gave money to knows exactly how much is in your
bank again now that is insane um at aztec obviously said it as well but um i think
privacy is just a basic human right it's something you should expect um if you're walking down the
street no one should know how much money you've got. It's so obvious.
Yeah, just to add to that.
So it's funny what Darren's saying,
that specific example of using a card
and people being able to know where the money's flowing,
how much balance is on that specific wallet.
So when I was at Visa,
we obviously served a lot of stablecoin-link cards
where it's effectively a wallet
you can spend on stablecoin balance,
think Rain, Bridge, et cetera.
And I remember when I was working on these specific programs, there were instances where people would actually where it's effectively a wallet you can spend on stablecoin balance think rain bridge etc and i
remember when i was working on these specific programs there were instances where people would
actually make transactions with those cards and then go to the you know blockchain explorer and
then see the transaction and route it to a specific settlement wallet and then be able to see like you
know how much money these stable cleaning card companies are moving on a daily basis and for me
like i don't trust people, I guess.
And what has been proven time and time again is people are scrappy at getting data.
I mean, you literally see it all the time with just in the investment world, like people
truly have satellites from the sky looking at oil tankers, like going through a specific
passage and just counting how many oil tankers are going through that single day.
So point being, like, this is also competitive intelligence and alpha that these people can go get if these transactions are not
private and so it is imperative that we get to that point or else you know
institutions just will not come on online.
Thanks, Ryan. Just to chime in on the like what was already mentioned by
Luke and Aztec about especially the institutionals but let's start
let's get a step back like i believe that the privacy should be baked in basically in the
protocol like imagine that you would be using sending an email over like a plain plain protocol
or browsing like now with httpDB instead of HTTPS.
You just don't realize that's even there.
Like you just expect that all your communication will be private.
So this boils and backs down to the Web3,
especially like the institutionals we now like talk to,
which we are working for and basically building some infrastructure for them.
we are working for and basically building some infrastructure for them like imagine that cfo
will see other companies which they want to acquire their money flows like that's
that's a complete like disadvantage for everyone so uh and it it boils down also to treasuries like
otc flows governance basically you don't really want to expose anything of that it should be by It boils down also to treasuries like OTC flows, governance, basically.
You don't really want to expose anything of that.
It should be by default private.
So, and that's where I see the privacy, like where the use cases are.
I believe that they are basically everywhere.
So everything should be by default private with a certain degree of, well, auditability and disclosure.
So, and that's what the institutions are also expecting.
Like they, they moved from that it's, it's optional, the privacy, to basically...
Sorry.
No, I forgot the word.
Basically, it boils down to compliance and basically the...
Yeah, basically, it's a requirement
if you want to deliver anything,
any software for them.
It's basically a requirement for them to be provided.
So that's where we are.
If I could just quickly add, I do think it's a great sign though that privacy is the topic
of conversation now because you know three, four years ago, scalability and now we have higher TPS
across all chains, you know, these transactions are happening at less than a cent and so this is
just the natural progression and like the fact that we're talking about privacy
means institutions are looking into this
and trying to solve a real problem.
And so I think it's gonna go,
well, you had scalability, privacy,
identity's probably next,
trying to make sure that this liquidity
and your identity is not fragmented
across so many different protocols.
But this is a good topic of discussion
and shows that we're heading the right directions.
Yeah, the identity stuff needs privacy, you know, at some level, because, like, if you're looking at,
I don't know, ZK technology and how it can help with your identity or EID, or whatever it is, you know, that like privacy is really important for that.
The future innovations that will also happen in a blockchain,
like Brian was just talking about.
Yeah.
To sort of piggyback off what he said.
Oh, go ahead.
Yeah.
So there's, I think those are the two things, Obviously, security and self-custody is one,
but privacy is really going to matter when people start using what is known today,
at least as a crypto wallet,
for things much more than just sending and receiving money
as something that they can just have multiple of
if one gets compromised.
When it's treated as a permanent account as your identity,
for example, or you have login credentials or things like that that are stored in that account,
you don't want the whole world seeing, like, oh, this guy's a member of this gym. This guy goes and
is a member of that society. He has this educational credential or whatever that's all stored on a blockchain account of some kind.
That is a lot more sensitive maybe than even just how much money you have.
There is a certain extent where, for example, high net worth individuals might, everyone knows sort of how much money Elon Musk has, and it's not a huge concern, but like all the rest of things could be very, very sensitive. And right now,
we kind of came from the digital cash point of view of this is just a cash container,
and then just started playing around with Web3 stuff under this kind of assumption that this
doesn't matter. It's not real stuff. It's not your driver's license, social security card, passports. None of that stuff is on chain. And at some point,
maybe it will be. And it can't be on chain if it's completely public.
Yeah. Yeah. 100%. I think a lot of that is where selective disclosure starts coming into play.
is where selective disclosure starts coming into play.
And in my opinion, everything should be private by default.
It should start at encrypted
and it should all be baked into the foundation.
In an ideal world, that's how it would be in my opinion.
However, we do need the ability to disclose
certain information, especially for things like ID. So I need to be able to
selectively disclose my ID to the person that I need to prove I'm of the age for whatever it is
I want to buy. But I don't need the rest of the world to see that. And that person only needs to
see that I am above the age that I need to be to purchase whatever that is. They don't need to see my address. They don't need to
see if I'm an organ donor or anything of that nature. They just need to see what they need to
see. So the ability to disclose selectively. And, you know, that's personal. But at the institutional level too, I think it was, Rado was mentioning, the compliance
areas of institutions also need that selective disclosure. They need to be able to just make
certain disclosures for, you know, securities and things of this nature. And so that's another aspect, the ability to share at will, but the ability to control who it is that sees everything is the essential part.
Does that make sense?
Yeah, definitely.
So having it in different layers of the stack, what exactly we're showing and whatnot.
Great insights. uh of the stack here how what exactly we're showing and whatnot um great great insights
yeah well one question maybe on the because most of this was in the war on the positive side
but also let's speak a little bit about the thing that can be improved potentially
i would say from my experience but i'm speaking here more as an end user of someone that tried some
privacy tools uh one thing that i was as someone who is quite some time in the
factory space while I was trying on Ethereum to shield some
transaction and sending some funds from one wallet to the other
one where I wanted to have private moving on funds from now
on and not being able to write or link it to any other
of my known accounts. Once trying it, try to set it up after a couple of hours of back and forth
with the protocol, I just figure out this is something that I cannot do each time that I want to
hide my transactions and I will just do it once for the guest fees that I'm going to
use and that's it.
Then after finishing it, I figured out that probably I can do the same with just sending
it from some text and having the same result in the end.
But what I want to say from all of that is that I just felt that the user experience of hiding the transaction
at this point of time is quite a headache, especially for the newcomers into the space.
So I'm curious to hear how you see it, the ones that are building in the space, how you
try to fix it, make it better, how it looks like on your chain's protocols.
Yeah.
Any thoughts?
Sure.
I can jump in a bit here.
So I think if you're,
one of the big, like, killer dApps right now
or technologies is DeFi.
And in DeFi, there are, you know,
certain vulnerabilities that can occur
if you don't have privacy like MEV attacks, front running,
just like gathering information on individuals. So what's great is that there are people like
SilentSwap. I have a good friend, Shiptoshi, that's building BoundSwap. So you have privacy on chain.
And so I think it's great to see that even though there are, like Luke was saying earlier,
things weren't necessarily built for privacy up front, that this is starting to change.
privacy up front that this is starting to change and i think over time uh with this kind of like
i call it the world unified ledger you'll be able to use different types of cross-chain tools
or borrow you know privacy let's say from another stack and interoperate and work together
let's say from another stack and interoperate and work together.
So things are quickly changing and a lot of these vulnerabilities will be solved.
Yeah, I would just jump in. One of the, I guess, one of the pain points that basically anyone that uses privacy in Web3 will point out is the user experience is rough.
Generally speaking, no matter what, there's going to be extra steps somewhere.
So, you know, you have to create viewing keys in some cases.
You have to wrap it in a mimble-wimble to hide it. You have to
send your Zcash into the privacy pool. There's some extra steps, so that's added friction.
And that's usually, generally, the pain point. So what needs to be iterated on more and more,
and it's something that we continuously work on
improving on, is that user experience, reducing the amount of steps needed in order to do
whatever it is you want to do.
And to Aztec's point, you mentioned silent swap.
What I love about that tool is it feels just like a normal swap everything's basically on the back
end um it's all abstracted so the user doesn't have to take all the steps they just need to
swap like they normally would uh if they can use uni swap they can use it um and it takes care of
things like bridging um wrapping it in the privacy technology, and then routing
it to the end destination all on the back end.
So no matter where you're building, if you're building in privacy, think about the user
experience and how you can improve it.
That's going to 10x the space quicker than anything else, in my opinion.
Yeah, I would definitely echo that.
And as a long-term user myself of a lot of this stuff, I have a lot of unfortunate experience with some of the worst parts of the pain points.
I mean, obviously scaling is one thing.
If scaling is easy, it becomes more difficult with privacy.
So, for example, a Bitcoin transaction is a few hundred bytes.
And a Zcash
transaction is like nine kilobytes or something like that. Just the amount of data that you need
is much higher. Wallet syncing and things like that can become very difficult because again,
a lot of this data isn't publicly on chain. And so you have to find where to look for. There's
encrypted null fires, things like that to look for.
The user experience, which has always been like a trade-off because you want the very fastest, best user experience.
Sometimes generating a cryptographic proof takes like a couple seconds.
And then, of course, if you want to broadcast to your whatever node over Tor,
you want to communicate with that, that adds some latency.
Then if you have a protocol like Dandelion++,
which kind of routes the network level traffic
through a few hops, that adds extra latency.
And then for example, if you have like a Monero transaction,
you need to wait for 10 confirmations
before you can re-spend your change.
And I've seen people in real life
going and buying something with Monero
and then having to switch to Litecoin, for example, because they can't re-spend it within that short amount of time that they're going to
buy something from one merchant and then another. There's just all these complexities. And that's
one of those things where I think that we can really evolve the space to really work out well
on that. But it requires just like the smartest and best
engineering and i have to say it's it's a it's an achieve it's a maybe a i don't know if it's a tall
task i guess it is but it's it's achievable um it just you can't make a lot of poor engineering
decisions on your road there because there's a lot of unnecessary trade-offs that maybe someone might make
that don't really rear their ugly heads
if you don't have complex things like privacy
or smart contracts or other things
that as soon as you add those extra factors in,
it starts to show the limitations of your stack.
And so I do think that we can have high-level privacy
for everyday usage.
It actually works and has a great user experience, but it will require doing things the right way.
And another thing is I do think people need to think very intelligently about how they're approaching privacy and what privacy you really realistically need.
Because there is no such thing
as universal perfect privacy and the closer you get to that the more like major trade-offs you
have to get that might not really do you any good so for example if you're using a shielded pool like
a zk shielded pool all the transactions anytime anyone broadcasts a transaction, it just looks the same. Now, if you have a tokenized system where you send tokens, you can make it, which, for example,
Zcash Sealed Assets are trying to do this, where those transactions are indistinguishable between
regular Zcash transactions, but that adds a whole lot of overhead. Now, if you split those pools
into two different ones, where one's just for Zcash and one's just for tokens, for example, you have a lot of efficiency gains, but a network observer can
tell someone is sending a token versus another transaction and they can't tell anything else,
like how much it's for, what token, who it is, et cetera, who's receiving it, who's the sender.
But for me, that's a perfectly acceptable trade-off.
But for a lot of privacy hardcores, it's not.
They just don't want just absolute zero information leakage.
So we have to think about what information is getting out there
and actually think what are we okay with
and what do we actually want private
on a pretty granular level.
Yeah, some really great ideas there joel um i think um my first experience
with a privacy wallet i think was rail railgun i think it's called oh yeah i know those guys
great people yeah it's it's they're great people it's a great protocol um but my experience with
it was it's it's designed for these hardcore people
like you're you're referring to and not not everyone is like that hardcore like most of us
uh just like everyday people who expect privacy and our payments and everything we do
and that's just the default that we don't want to it's just unnecessary to give up on that
um so yeah some of the things that i experienced were like, yeah, that syncing issue, like
it took like 10 minutes or I tried another wallet and it took like an hour to sync my
balance.
It's like, well, that's a no go for 99% of people, right?
And I think like where we need to take privacy and crypto generally is to more like a consumer wallet
experience like you know it's got to be as good as banking or if if not actually better and there's
no reason we can't achieve that over time um in the short term that may require some trade-offs
on the level of privacy but i think like yeah for most people they're not trying to
money launder or do you know malicious things they're just trying to have general day-to-day
privacy over their balances that don't want to get robbed because they have ten thousand dollars and
they live in you know a third world country where you know that thing might those types of things might happen um those are the types of things that we need to solve for
people and um if they're going to use these wallets uh they have to have a decent user experience
otherwise they may as well just use you know their their bank account um so yeah i think that's that's
where we need to go is is more towards like a consumer experience.
Yeah, just to add, so I agree with you fully, Justin.
It's got to be effectively just a toggle, like I was saying before, and specifically for the business too.
It's probably just going to be a default for them, right?
Like it's going to be a button that they press, all their transactions are private.
Regulator comes, we want to see all your transactions.
Here you go.
No problems at all. It's going to have to be that simple. Now getting down to that level,
Joel touched on it, like it's very complex when it comes to the actual development that goes into it.
But I have belief in this space, and we're always going to figure it out. That's one thought. Two,
it's so funny, like we're talking about privacy. But you know, when I got into the space back in
2020, I mean, the entire thing that enticed me to was like the public nature of it all.
And it's so funny. And like, you know, when these big companies come with big checks asking for things to be private now, we're changing pretty much the entire ethos of it all, which is totally fair.
And it makes obviously sense for transactions and doing things on chain. But yeah, you know, you know, money will change the opinion.
But yeah, you know, you know, money will change the opinion.
So but I do think that I saw the other day that Visa is now like a super validator for
Canton Network and things along those lines.
And I congratulate the team over there.
That's really exciting that there'll be a validator node, right?
Like Visa's routing transactions for a blockchain network.
I mean, we're in 2026 and that happened.
It's going to be interesting to see how these different networks take it on, right? Like you have effectively privacy is now becoming a new way of selling permission
networks again. So Canton, I would say, is more of like a permission type of network.
Tempo effectively has a way to go into a privacy environment within it. I think Polygon is going
to be looking into similar types of technologies where effectively you have the public chain,
but you're able to go into private environments and then leave those environments. There's going to be a lot of different interesting
solutions, but what is going to be problematic is just with all of these different chains,
like as soon as you bridge, I feel like the privacy will effectively go back to zero,
right? As soon as you're bridging over and you're trying to connect all these different liquidity
points, you're going to run into this trouble of just, you know, things becoming public again.
And so whoever can solve that problem and just making sure all this liquidity is not fragmented and still remains private that would
definitely be a winning solution yeah so to add to that like really one of the questions we got
from the procurement is basically when you had these institutions they don't really want to stay
on one chain they really want to have their assets on different chains basically and switch them back and forth and prove me wrong
if there is already a solution that can basically do some privacy cross-chain
that will be a killer feature so if you know about one I'll be happy to hear it, and I'll sell it to everyone.
But as far as I know, there is not a good one.
Yeah, that's a really hard one.
And there's definitely limitations.
Yes, it is possible, especially at the transactional level.
And it comes down to routing and obfuscation.
Brian was 100% correct.
Once you bridge out of a privacy network,
you are now bound to the rules of the public network
that you just bridge to.
So you have to start depending on obfuscation.
And that is tough on public blockchains.
So you can route. For example, SilentSwap, like Aztec just mentioned,
does it. For example, you can swap native Bitcoin into native Ethereum cross-chain privately,
but it's because it's routed through privacy networks. So it starts public, goes private,
It's routed through privacy networks.
So it starts public, goes private, routes out of the privacy networks and pools, the privacy layers, I should say, back into the public domain.
So in the middle of the routing, it's obfuscated.
The chain is broken.
So no one can track that this Ethereum came from this Bitcoin. But it is a
tough problem, and especially with other use cases. So you can get creative, but it's a very tough problem to solve. And so the tougher it gets,
the harder the UX tends to become. I think silent swap is fantastic in how little friction there is.
And I've never seen anything else like it. It's absolutely the best user experience I've ever seen in all the years I've been in this space.
But I would love to see more and more things like that.
Things that protect privacy on non-financial assets.
You know, cross-chain messaging, smart contract calls, things like this.
I would love to see more innovation in those areas as well.
So I have to give a random shout out, and I can't. Unfortunately, I've not had enough time to do tons
of research on it, but NIR, the NIR blockchain has been advertising a private shard that they
deployed. And I'm very much looking forward to NIR Intense, the cross-chain DEX, which supports
Dash and Lightning and a bunch
of other assets like that to be available on that so the actual swap the actual intent on chain is
private so i think we are coming along where definitely cross-chain privacy is tricky especially
because people think they can do pass-through privacy by like swapping like bitcoin to something
like zcash and then back to bitcoin and like oh i cleaned the coins or whatever and it's not because people think they can do pass-through privacy by swapping Bitcoin to something like
Zcash and then back to Bitcoin and like, oh, I cleaned the coins or whatever.
It's not quite how that works.
But I am hopeful that we'll get there within the next few years.
I mean, the thing is as well, people tend to go for the cheapest option.
If the privacy option is more expensive,
a lot of people will just skip it.
We do live in an era
where people are happy to give
all of their data to Facebook
and all of their data to Google
for just a good service.
People care less about privacy
than they do about a good UX
or a good service.
Yeah, that boils down to what Justin said.
Like if I am an every Joe and I see that I need to spend an extra amount of effort
to transfer from A to B and I need to pay five bucks for it, like maybe not.
Maybe I'll just use the regular transfer like which is two cents
okay but we also have on the other side some on-chain proof that people are paying for
fees and we see some yes a decent volume of private transactions let's say on the largest
protocols here for now uh but yeah things are changing yeah
definitely uh but another thing that i was thinking i think brian mentioned it regarding
the liquidity separation so uh we already have like hundreds of chain uh with each chain he has
its own hundred or whatever number of d5 protocols so the liquidity that it is what it is.
So it's a zero-sum game.
So it's being divided between a huge amount of different players.
And if we go a step further and start dividing it
between different privacy protocol,
because there is no correlation between each one of them,
is this a deal breaker for whatever
d5 protocol to potentially integrate some private protocol I would love to hear your your thinking
yeah maybe Darren and you you are with quick swap so as a decentralized exchange, how do you think about it?
Can you repeat just the last bit, please?
Yeah, sure.
So if you consider integrating a privacy protocol,
which potentially would separate the liquidity that you have on the exchange even more
between different privacy solutions,
so how do you think about it there is it a deal breaker or yeah I mean we we actually have been looking into that quick swap
has always um worked with everyone we can so if uh other people are going to build things on top
of quick swap are usually more than happy to sort of put that on the front end or sort of instill that as part of the core products.
There's a lot of people building in very specific niches that no one has the time to cover all.
So the sort of whole mantra since day one has been work with people that have the cool tech
and then just everybody wins.
We have been looking a lot into this. A lot of it, specifically the privacy and transaction sort of objuscation, etc.,
has been the touchy subject,
because even the lawyer on our side is a little bit like,
ah, like, obviously up until, I think maybe two years ago,
the landscape in the crypto space was definitely very different.
The SEC at the time was much more scary than it is now.
So I think things are definitely moving in the right direction.
I think it's a lot about, obviously, Quicksilp has immutable contracts.
gets a lot about obviously quicksop has immutable contracts um anyone can sort of use it um but we
are sort of bound to make sure the front end isn't used by maybe parties that shouldn't actually be
using the front end maybe all fact sanctioned people or um anyone engaging in other nefarious
activities um but yeah i mean it has been a touchy subject on our side it's something
Yeah, I mean, it has been a touchy subject on our side.
It's something that we haven't had a lot of ask from the community for it so far.
But it's definitely something we're open to integrating if there's a lot of demand for it.
I mean, looking at the volume of the different swaps so far,
Quicksaw does a lot more volume.
So I think right now we're still looking at
exactly what everyone just said.
I think it was Justin,
where the demand for products like that
isn't maybe as much as it could be yet.
And it could be fee-related.
It could be just people don't care about being private.
I'd love to jump in there uh so like i'm one of
the the ones that really leans on a lot of uh dexes out there to adopt privacy because i i think that
you like right now there there might not look like there's that much demand but if people had the ability to
choose i think and it made sense you know like devils in the details with costs slippage um
you know transactional costs all that but if it was pretty much on par i think they would choose
privacy and i also think that like as the builders in this space it's it's up to us to push
um everyone to build you know in a in a you know focus on decentralization focus on privacy these
like really important things in our world and I think that if we continue to do that over time
what will happen is that the this the conversation will switch from being
like well it it kind of causes these issues or it's maybe a little bit more expensive to people
just demanding other solutions like why don't you have privacy so i know we're kind of in that early
stage right now where people are starting to get it for privacy but to me it's it's
up to us to make sure that you know the future generations of this world have really great tech
and and that's that's up to us so like i i sure there's there might be some uh reasons why you
as a solution might not adopt it today.
But I think it's, you know, to be not only on the cutting edge,
but to also just do the right thing, I would say,
try to find out how, you know,
you can add privacy to your solution.
I mean, just to jump in, sorry, quickly,
and maybe push a small question.
I know Joelle's actually been looking into this recently,
but where do you all actually see privacy being?
Like, obviously, it could be at the blockchain level.
I personally think it'll eventually end up at wallet level
where you just download a wallet.
Things that happen inside that wallet are private to you.
But if you need to sort of give anything to a government
that asks nicely, then there you go
yes so um privacy is at so many different levels for so many different things i think that um the
one thing that's very much um the the sort of non-negotiable part, I think, will be on-chain privacy,
meaning your on-chain transaction
will have to at least minimize the amount of data leakage.
And I like this term, MVP, or minimum viable privacy,
and I kind of feel like for financial transactions,
that sort of amounts are hidden.
If you see that a well-known someone transact,
well, some address transacted with someone else,
and if you hide the amounts, that's most of the damage that's hidden,
even though you would like to hopefully break the transaction graph as well.
Now, where other things happen, most of the blockchain is the most public level,
so that part has to have at least a minimum of privacy on it,
because anyone with a block explorer just goes in there and can find it especially in the the era of ai where you
could just have your llm just scrape the entire blockchain try to find patterns indiscriminately
and just be like oh i think this is a person i think this is a person oh i found a ip trace to
probably their home address you know like that that's the number one thing. Other network level privacy things like which node
is broadcasting, which transaction based on IP addresses is important, but it's a little bit
more sophisticated to go after maybe. The one thing where, and this is where I think a lot of
hardcore cyberpunks like myself might not bristle at this thought,
but I kind of feel like the wallet and infra level
is where things might leak more long-term
and everyone's okay with it.
Meaning if you have a wallet
and you're using some company's nodes
to broadcast your transactions out to the public and you're
querying CoinGecko for a fiat price of this or whatever it is, all that stuff that's leaked to
the manufacturer of the wallet that you use, there's plenty of ways of getting rid of that,
but that's where you get a lot of trade-offs i kind of feel like that's where
most people will be comfortable with the trade-offs they're they'll say well the whole
world doesn't know what i'm doing but um the actual wallet manufacturer might know a lot of
things even though i self-custody everything and like i guess if the government has to subpoena
the company and just be like tell me all all the user data you've figured out.
That's not a big threat model for a lot of people.
And so I kind of think that's where the trade-off is going to end up being
if it does have some UX efficiency gains.
Although, obviously, I'm going to keep pushing
for things that don't have those trade-offs
because you always need to have that
for the overton window.
But if I'm just being realistic,
I think that people will be like, hey, I download, you know, trust wallet.
I trust trust wallet.
As long as the rest of the world doesn't hack me and as long as I'm not doing wildly illegal things, I think I'm OK with whatever with them knowing some things about my transaction history.
I think just to add.
So I remember you were talking about if all things were equal, you know, like when it comes to the cost, let's just say for making a transaction, actually maybe it was Asics saying it, you would choose privacy, right?
You know, if like the costs were equal, but the thing that we're going to see with privacy and, you know, what we have to solve for is again, like that liquidity fragmentation.
And all that really means is these transactions and this swapping becomes more expensive.
And all that really means is these transactions and this swapping becomes more expensive.
And that matters so much to these different payments companies because, you know, at Visa,
like every single basis point, which is literally just like $1 off of $10,000 transaction matters
to these companies, right? And so for companies that are moving $100 million, right, in a
transaction, if the, let's say the swap fee is 10 basis points, right? I mean, that's, or sorry,
more so one basis point, that's about $10,000, I want to say. So in these situations, you have to
get the cost as low as possible. And so in order to do that, you really have to connect all these
different liquidity endpoints in order to do so. And this is not as much related to privacy, but
funny enough, I actually really agree with, I mean, he's a Brian himself, but Brian Armstrong's
entire thought on like, not accepting the Clarity Act yet.
I think there's a huge point there because at the end of the day, if money is not treated like money on chain and it can't just make yield, you're going to still run into these on and off ramping problems where there are costs to do these rampings.
And so that just adds intermediaries into these transactions.
And we're trying to get away from that.
And so I think, again, we just have to continue to keep reducing the cost.
That way blockchains truly are the cheaper, programmable, faster way to move money on, to move money across the world.
So, yeah, we have to make it a global RTP network, but that's not costly.
Yeah, if I can quickly just touch on cost as well. I tend to agree with Brian. I think,
yeah, we'll get to a certain point where, and I think we're pretty close to that already,
where the price is just, there's not too much difference. I mean, at the moment,
I'm spending like hundreds of dollars on AI subscriptions.
So, you know, the thought of say spending, um, like $5 on my transactions, uh, you know, for the month to do those privately versus, uh, spending, you know, 50 cents or a dollar, like
in first world countries, that's not going to make any difference at all. Like, of course, I'll spend, you know, a few dollars more to do things privately.
Once we get the user experience to a point where it's better, then there's just no reason not to
use privacy and the costs will come down. So in my mind, it's not something I'm really concerned about that people will go with the cheaper option.
They'll always over time go with the better option.
And it's our job, I think, just to make sure that privacy is the better product, essentially.
I have to agree. So first off, with something like Litecoin today, with MWeb, you can send
I have to agree.
cryptocurrency across the world for less than a penny. But in regards to Web3 functionality
and the cost of privacy today, sometimes it's a little bit higher, but what I believe will happen is that as it gets adopted more, it will be a race to the bottom of people trying to find ways to make it more cost effective. implement privacy and as builders in this space if we work on basically competing and creating
competition in this free marketplace the price of privacy will only go down over time so
of course you know just innovating and trying to find great ways to bring it down
in general is really important as well.
Yeah, absolutely.
Well, on a couple levels there, speaking to the liquidity and the cost of the fragmentation,
it's real.
The struggle is real, especially right now. The privacy networks are generally thin compared to some of the more public protocols.
One day, and as it gets adopted, it will grow, you know, after a few institutions just say, hey, everything has to be private or we can't adopt this, then we'll see
uni swap level liquidity on these privacy protocols. But it is a cost now. But as I was
saying, the trick is just getting the optionality in front of people, let them choose. And then the more people see adoption,
the more people will start computing to make better products
and take advantage of that, the users.
I am going to have to drop off here in a couple minutes,
but I wanted to just touch on the levels of privacy.
Yeah, I have another appointment.
It's been a great conversation,
but I have to agree with Joel a lot on just what he said. When it comes to which level is the most
important, 100%, the on-chain privacy is the most important. The wallet, yes, there is a lot of
metadata that people don't even realize they're sharing with the wallet.
But at the end of the day, the wallet cannot protect the on-chain data. It doesn't matter
what wallet I'm using. If I'm on Ethereum, the Ethereum blockchain is public. So we have to work
on that level of being encrypted. And so if we had to choose one, it is there.
But on the other hand,
I would love to challenge more wallet providers
to start integrating better privacy practices,
start protecting IP, start protecting metadata,
start protecting your users overall.
So, and the same can be said for just app builders.
At the app level, there is a lot of leakage that people don't really think about.
And so, we can do better on all levels.
But like Joel said, if we have to focus on one thing but let's um get the the on-chain data
encrypted or at least an optionality uh to to get the minimum uh viable privacy uh I actually like
that the MVP um yeah so yeah ironically by the way I think that the metadata app etc level is the much bigger
threat to privacy than the on-chain thing it's just that the on-chain thing is like the the
foundation without that you can do everything else and it just it's really hard to keep that
and also just like the once the chain is better you can build more privacy experiences easier
as opposed to the other way around.
So, yeah.
Yeah, now we'll have to jump off with this.
It's been a fantastic conversation, everyone.
Thanks very much for inviting me.
And I got a space to run.
So thanks, everyone.
Sure.
Yeah, as we're coming close to the end, I would then just suggest that we do a lighting
round of maybe you can answer
quickly one of you what is the most exciting thing that you that you think that uh we could
expect in a year or two when it comes to privacy and then we can uh close it up yeah yeah maybe
starting with look you also uh earlier for another one, please. The most exciting, within a year,
I think within a year we'll get there
with on-chain agents adopting privacy.
That would be the most exciting to me,
seeing AI agents actually use confidential computing
at the foundation and adopting and using privacy
protocols for their workflows. That would be my choice. Then I got to jump off. Thanks again,
everybody. Great, great conversation. I got to run, but I appreciate it.
I'm happy to give my quick take, and it was great meeting you, Luke. But I would say over the
next 12 to 24 months, what's gonna be really interesting is seeing these public blockchains
create privacy environments on their public chain. At the end of the day, I'm at Polygon,
Solana and all these other different chains out there that have been public since day one are not necessarily just ignoring what's happening.
Right. Things are going to be done. And so there's going to be massive technological advances in order to make sure that, you know, for certain situations where things need to be public, we will maintain it.
But also, you know, when we have to, there needs to be that toggle button to be private.
But also, you know, when we have to, there needs to be that toggle button to be private.
And so I think, I guess I'll say public chains having privacy environments.
I have to echo what Brian's saying and in a bit of what Luke was saying, you know, I think that what's exciting in general, which is coming up, is just the ability to like in this again bringing
up this uh word unified world ledger that all of these shards or all of these chains essentially
will be able to interoperate with each other and borrow you you know, from other, like, like all these like modular pieces.
And so maybe chains won't necessarily need to build their own privacy.
You know, maybe there's some kind of bolt on privacy or they just borrow the privacy of another solution.
uh the privacy of another solution um you know and i think it's also interesting how agents will
interact and transact uh like luke was saying using privacy solutions in the workflows i think
a lot of this will start happening in the next year uh it's it's also something i'm looking into
myself with litvm you know we're building on top of litecoin so um the future looks bright i'm i'm looking into myself with litvm you know we're building on top of litecoin so
um the future looks bright i'm i'm glad to see the cypherpunk mission continuing
yeah great great responses so far for me it's like um i think like even just making some really
good traction towards interacting from that privacy base, maybe from the wallet level, having that privacy there.
To interact from that private base and make trades cross-chain, I think that's going to be a critical step.
And I know it's not perfect privacy by any means.
But if we can start to move towards that and get a couple of percentage of adoption into privacy- first wallets, privacy first networks from those privacy networks,
even just interacting with the public crypto verse. That would be a huge leap in the next year.
It's a small goal, but currently you'd have to say 99.99% of crypto is public. So if we can even just get to 1% in the next year,
that would be huge.
And I think then it will be like more of a parabolic,
like increase in privacy versus public.
It starts small, but you know, you have to start somewhere.
You know, you have to start somewhere.
Yeah, I would just chime in.
Yes, what Justin said, like, I would also love to see, I don't really think that we will, like, see institutions massively jumping in a year, basically in the privacy.
Like, they need much more, more like something we didn't even touch
basically that that selective disclosure uh so basically who owns the decision to disclose so
that that that's that's one of the big problems so which is still blocking this adoption but
as justin mentioned i would love to see much more people using basically
much more products than DeFi projects use the privacy and start pushing the adoption.
That's what I would love to see in a year.
See, my issue with the question was that mentioned a year so what no one sort of
no mentioned yet actually which is a really big thing was the ETH and their
straw map mentioned that they're gonna be working on like shielded ETH transfers
I think once like maybe a blockchain like ETH brings that in more of the the
other chains will follow it'll be like a standard sort of process at that point.
Like if I can do it on ETH, I want to do it on Polygon.
I want to do it on Solana.
I want to do it everywhere else.
But yeah, again, the issue is that it's on the ETH roadmap
and a year timescale is probably not feasible.
So I think, yeah, short term.
Yeah, I think that's the main thing we were probably waiting on before everyone sort of thinks okay yeah cool privacy yeah i want that
i have faith in all of this stuff uh i think i look around at all the buildings in the space
and i'm so impressed and one thing i've noticed is going to all these different conferences and
meetups with people building is everyone has eye bags because everyone like
works long nights so we're gonna figure it out so definitely okay guys yeah thank you thank you
very much for your time yeah it was this was a great discussion uh i hope we will find some time
doing do something similar in the future uh in the future with the same people here.
Also, thanks to our listeners.
And yeah, I wish you all have a nice day.
And thanks again for being with us.
Thanks all.
Great meeting you all.
Bye.
Have a good one, Legends.
See you.
Ciao.
