I want you to put your head just to move your hips to the side of the stand.
We've been on a lot of tracks searching for love
You gotta give a little take a lot. You gotta know nothing. You gotta give a lot.
(crickets chirping) (crickets chirping) (crickets chirping)
All right, all right. You got it. You got it.
Alright, let's keep the fire burning and kill the music. Alright. I love it when we keep the fire burning and we kill the music. Alright, thank you very much volume and welcome everyone. Today is
June 21st, it's so weird. This is like June 21st, 2023. I think we started doing these, we started doing a Paloma Twitter spaces in like May or June of 2022. So it's going to be a year of just like non-stop weekly, like maybe what over 50 of these things, it's insane. Anyway,
I want to say welcome to the true believers. My God, who's here today? I'm looking through the list. I see Mayhaw Seekard, St. Game, Field Theory. It's just us. That's totally fine. Welcome, Field Theory, are you there?
Is field area there? Yes, I'm here. How are you? All right. I'm doing great. Doing great field area. Rocket and Roland. All right. So today we want to say welcome to everybody from Paloma Community, welcome from the volume community. And again, we are grinding away here in
non-typical obscurity on volume. And today's topic is we're going to be talking about Web 3 security and real world assets. And of course, if you're a Paloma validator, this is an exciting talk because you'll get to peek into some of the ways in which we're thinking of how
You know, Paloma can continue to be a foundation for very cool applications, very profitable applications. Let's start with profits before cool. Okay, and so of course if you're reading this, welcome. And this event will be transcribed and also produced on Twitter so folks can enjoy it and consume it.
at their leisure. And as folks continue, as we continue to release new software, we're very excited to make sure that this stuff is out. So this will be featured on our blog as well. All right, so what is volume? Volume is a software company. And our goal is private key security and private key management.
We really want to focus on making delivering solutions that allow everyone to get more use out of their private keys across multiple blockchains. So think if you have a private key on Binance Smart Chain on Ethereum, if you have a private key on your own, or if you have a Kempollik on ZKBM, you have a private key on Avalanche.
you're going to have way more private keys than you've ever thought of and there are more chains launching and our view of the world is that in a world of hundreds and thousands of private keys you're going to need help to manage them across multiple chains and our goal at volume is to enable more control for your
private keys. And the way we do that is that we are building on top of the protocol called Paloma. This is a blockchain cosmos, L1 chain, and we are adding continuous features and continuously working with the community to come together to essentially get this network
to help deliver an a promise of managing your private keys. And today's topic is we're going to talk about security, web 3 security and real world assets. And we're going to talk about three areas. We're going to talk about a brief introduction to web 3 security. It's going to be very high level. It's going to talk a little bit about how Palomite essentially delivers on
it's security model. And then we're going to talk a little bit about real world assets in crypto. I had a joke today with field theory about what a real world asset is. I have to make sure you say real world assets in crypto. And then we're going to talk a little bit about Paloma's features that are coming in
this next release. We have Pulumavee 1, 3.1 that will be released on a PIP and of course today's TestNet upgrade day. So even after this event and the TestNet upgrades we're going to be getting a Pulumavee that's ready for me, Net, that will be delivering on some of these cool features. So if you're in this chat right
No, you kind of the lucky point to say, okay, it's been a year. It's been a year of continuous releases. And I still can't believe it. Feel theory, can you believe it's been a year since we've had the pre-alphas that we've been releasing? Like, is that nuts?
He thinks it's nuts. Okay, great. Few of everything's nuts, but he's just being deep in silent. It is very insane that we've been doing this for a year, continuous releases, and again, very much focused on applications that people want. Let's talk
Let's talk about what is Web 3 security. Let's introduce Web 3 security. What 3 security simply means making sure you have your private piece and you can access the string of numbers and the string of letters that are used to sign transactions and move an input to an
output on a blockchain ledger. So if you remember blockchain ledger 101, what are blockchains? They are just storage or records of inputs. What are inputs there? Just balances. And then spending of those inputs, how do you spend those inputs? You sign a transaction. And when you sign a transaction with
your private key, the public key is used to decode or sort of decrypt the transaction because only the public key, because it's on a key pair, except K2561. Okay, we're not going to get into the deep cryptography here, but all you need to know is that public and private keys exist on a curve, and you have two points on a curve.
One point is your private key, one point is your public key, and one point is the point you're exposed, which is your public key and the other one you keep secret. That's your private key. Right. And what is the security of private keys? Security of the secret. And how do you keep the secret safe? Well, we already know that over how much, like 20 billion dollars have been lost to, you know,
you know, essentially private key exploits hacks every day. You know, we hear of another problem, such a, you know, where as some contract was exploited and a private key was exploited or a private key lost, people were fished. You've heard it for the last 10 years, you'll hear it for the next 10 years. Private key security is a big problem.
and it is never going to go away. It is a cancer on our lives and we are all victims. I've been a victim to loss the private keys. I'm sure some of us here have been victims to having private keys stolen. If you currently use menomask and use keys in your browser, you are at risk.
because somebody can install something in your browser, that can steal your private keys. If you copy and paste your private keys using your clipboard on your computer, and your computer has not been totally scanned of viruses and surgeons, you could be at risk for loss of your private keys. This is a problem that is
is a threat to us all. It is the problem that will make us suffer and it is the reason why volume will continue to be successful. So let's talk about this. Okay. So what does it mean custody of your private keys? So custody of your private keys means securing the private keys in a place that is reasonably secure. There are custody
their custodians. You can go to today Coinbase is a custodian, very solid company, Fireblocks is a custodian, amazing company, they're worth like $10 billion. And then there is Bitgo, another custodian company. And I remember being there for Bitgo's launch and I was one of Bitgo's first customers where they use multi-sig.
security to store and allow you to safely retrieve a lost key. So custody is a safe storage of chaos. I like to say that chaos wants to be free and private keys are essentially a snippet of chaos or some collection of chaos you keep secret, but of course secrets always want to be unseen. They always want to be known.
and save custody and retrieval of these keys or this string of information is what's important. Now, how do we do it today? So it's their solution. So for example, with Bitgo, you use multi-signature accounts. What is a multi-signature account?
So a multi-signature account, when we first started in Bitcoin, is an account that allows more than one user to sign the transaction. So it requires the signature of more than one key or more than one private key. And what is the signature? The signature is the output when you sign
a transaction with your private key that output is called a signature. And having, you know, there's certain accounts that won't essentially successfully sign an output for an input to an output unless there are multiple keys or multiple signatures come together. How did they come together? You just like put them right next to each other, you put signature one.
And then you put signature 2 and then you put signature 3 and sometimes you'll say, hey, I'll have a multi-sake of 3 of 5, m of n, right? And what is m? m is the number of signatures that are needed and what is n of the total keys that are accepted. So if you do a 3 of 5, that means
you have signature 1, signature 2 and signature 3 out of 5 signatures. And you know, let's take an example here. So for example, say Mayhoff, C-card and field theory, St. James and myself, we are the 5. Then it could be C-card, Mayhoff and field theory, once they sign a transaction with their signature
Those signatures are verified. Those signatures are essentially authorized the movement of inputs, tone, output. That's multi-sig security. That is essentially the security that underpins a massive multi-billion dollar business like Bitcoin. Then you have multi-party computation. This is what the rock stars over at Bitcoin.
a lot of other great companies use. What is multi-party computation? Well, what we do is we break the private key into pieces. What if we took the private key and broken into shards, right? And we broke those shards such that everybody had to compute and generate the private key on the fly. So instead of
having everybody have their private keys to sign in the multi-sign approach. In the multi-party computing approach, everybody we can have 10 or 100s. You can go really big. You can be like, hey, a thousand participants need to compute their piece of the key. They compute their piece of the key of the private
And then they all come together and boom, when they all come together, the keys come together, the keys can unlock. And then of course you use multi-party computing as something called threshold encryption. So after a certain amount of keys have been created by the multi-parties, right, you and they reach a certain threshold, then that key
is a valid private key. This is multi-party computation, really cool stuff, very advanced cryptography. Awesome. So the question then becomes, well, Tariq, what does that have to do with volume? Well, volume is essentially been building on Paloma and volume uses Paloma to use
pretty much multi-sake and multi-party computation. So, wow, that's kind of cool. So, how do you guys use that? Well, so let's start about, so we'll talk about how volume uses Paloma for web security. So, first things first is that volume really leverages two sets of keys.
So volume leverages, Paloma's account management system, which is essentially the generate the private keys on Paloma. Paloma allows anyone to generate multiple keys on Paloma. And these multiple keys on Paloma now have permissions. And they're a permission
are essentially permissions to control keys on target chains. Whoa, so what does that mean, Tark? Well, that means that when volume uses Paloma, it allows users to create different sets of keys that essentially have permissions to control
it keys or outputs and other chains. And the way that works is Paloma, the blockchain acts as a multi signature or multi sig network. So all the validators in the Paloma network are treated as multi sigs. They they sign the transactions. So currently Paloma has how many how many how many
validators below my has somebody give me a number 48 50 150 so Paloma has somewhere between 50 to 150 validators in main net and they all get to sign and because they have to sign based on the instructions of the keys that are critical
created for users on the Pulumma network by volume, volume users essentially now are able to direct this multi-sig bit hem off. Like think of Pulumma as a data center of multi-sig signers, and now users get the power of the Pulumma validator set to essentially be that multi-sig
to sign. And because the Paloma validators said are, you know, people that really don't give a shit what you want to do with your money, they're like, hey man, I'm just here to run a network. They, their goal and their desire to run this network and be paid for this network means they act as disinterested service providers, right?
for this multi-sig as if you could have multi-sig as a service and can these validators be multi-party computational partners as well? Absolutely. And what multi-party computation does on Pulumet allows validators to actually say, hey, they can also act as multi-party computation both on the keys that are generated on the volume on the Pulumet.
alongside as well as multi-party computation for execution on the target chain. So this is a nice fancy we have saying the Paloma network as seen by volume is a very, very effective custodian of private keys on any target chain.
So I'll say it slowly, the Paloma validator set becomes an effective multi-signing network to control private keys on any other target chain. Yay! This is cool stuff, right? So what does this allow us to
to do. So what this allows us to do is cool things like automated features. So volume can now offer things like automated sweep and automated swaps. What's an automated swap? Oh, think of it like an automated swap every day at 8 a.m. If the price of Bitcoin goes above a certain price,
or buy a bunch of it. But is that dollar-conceiver? No, no. Think of it like you can actually schedule a transaction based on a certain state on another chain and you can say, "Hey, I would like to manage the funds, but I want to have my
My chief financial officer managed those funds and I want them to have to manage it without worrying that they'll steal the money Volume now wants to be able to offer that type of feature in a decentralized manner via the Pulum of Alligator set so automated
swaps, swaps happen automatically based on a time, based on a condition. Automated sweeps, funds are moved and replenished into accounts. People like to say sometimes subscription payments, but I'm like, anybody can do subscription payments, right, because those are kind of like fixed. But if you have certain conditions that must be executed where you want to be
unattending. You don't have to be there and those conditions may change. Now, volume can offer this type of functionality feature using the Pulum of Validator set. So that's why this makes it very, very interesting. And again, Validator set security is the model in which we're building this on and volume is sort of building. So, volume
So, it all even tends to offer security features for managing private keys on multiple chains to companies. And what are the security assumptions we're making? So, there are some security assumptions. The security assumption is one, the validator set security is solid, which means that the validator
value, it just won't try to steal the money or steal the instructions or mess up the instructions or the multi-sigs that they're executing on. That's an assumption. We say that that assumption is holes if the value of the network is greater than the value of the funds that are being custodyed. So, Paloma needs to be more
valuable than the funds it has on the custody via volume. So that's important. And currently right now, you know, Paloma's token is not traded. So one can say, "Target, you know, that might be kind of, if tokens on Paloma trade, it has to trade much more than the value of those funds being transferred." And we're like, "Yep, that's important."
And that's a challenge. Also, you need to validate your system needs to be lively, right? You need people to be able to easily enter and exit, right? And right now, you know, running a Paloma validator sometimes may not be the easiest thing, right? So you want it to be easy and brainless and so the lot of work needs to be done still to make
make pigeon and pull them easy. So these are the issues and constraints on the security assumptions we're making here. But there's a lot of opportunity. And I wanted now a switch over to talk about real world assets, right? So I talked a little about Treasury management. I'm not going to talk about real world assets and field theory. Are you here?
>> Yes, I'm here. >> He's still here, folks. So, why don't you introduce us to what is a real asset in crypto and what does that look like? >> Sure. So, currently, real-world assets in crypto
to pretty much mean fixed income assets, real world fixed income assets. So we're talking about debts of various sorts, government debts, and corporate debts. Right.
And to elaborate a little bit further, you know, that's so from the issuer, obviously governments are the most reliable. So they're the deaths issued by governments are considered lowest risk and then corporates they are
are sort of categorized by their credit ratings and that's our, they are given different risk parameters. So you know, you go from very, very reliable to something a little funky. - Right. (laughing)
And then I want to example our gift on which connects crypto to real world assets is a product called on to a finance What they do is they help essentially is a process You know if you think about it of crypto holders
if they want to have exposure to real world assets, what has to happen is their crypto tokens need to kind of go off-rand and then go to let's say USDC and then essentially be converted into Fiat US dollars and then USDS dollars
have to be spent on buying the set debts, like the government debts or corporate debts. So on to finance, they do it in a nice way. They basically use some of the very common used exchange traded funds.
they do it within different risk categories. So for a very short term, very the safest real world asset, they have the money market fund on chain. And what they do is essentially help users to off-front their tokens and then get them into
to some money market funds and we're talking about certificate of deposits, repurchase of remiss. These are really the most reliable short-term debts. But the
of this is if you want to be very safe, the yield tends to be not very high. Money market funds normally that annual return range from something like 0.1% to 3% or 4%. And then if you want to do a little bit higher than that, you can go
for US Treasuries and you do, you know, slightly longer duration, you know, we're talking 5, 10, 20, 30 year US Treasuries, then there's, you know, there's ETF tracking that and then on to finding us how people all from to those ETFs, then you can go
to something like 4-5% annual return. And still, with a reasonable risk, because it's still US backed debt. If you want to be even more cavalier, you can do corporate bonds. Corporate bonds are issued by companies. And some companies become
because they have relatively low credit rating, have to give very high return, very high yield in order to raise fund. So some high yield corporate bonds and underfinance tracks, very popular ETF, HYG, is got high yield bonds.
and they're essentially crediting going from triple B and everything lower, you know, double B and B and U.S.C. So you can go any return as high as 8 or 9%, but because these bonds are really they do have, you know, risk of defaults.
The value of the phone can actually tank. So you want for 8% return, but you might lose 10% of your investment in a short term. They might recover, but they might not either. So that's kind of an overarching, this is an overview for real world.
of assets in crypto. That's awesome. Thank you. So, and the yields were looking at are anywhere from like what? You're seeing 3% to 9% in that range. >> The change one is going, you know, 3%, and then you 5%, you know, use things gets a little risky and then 8% is high yield is, you know, there's a plane of risk there.
So one of the things we're looking at volume is really again providing access to real world assets such as these. This makes up part of the area of decentralized trash management. So users have funds, they want to park them, but then they want to move them over, collect yield and move them
back. But we want to do that in a way that they don't have to put their private keys at risk by having a person actually come sign the transactions. So in this example with an underfinance volume makes it possible using Paloma to have users control their private
deposits into something like Ando and actually for you know control their automated deposit automated withdrawal and Interacting with these types of of of of of services, you know for example like on a finance could be pretty exciting One other way we're looking at it is in the area of private credit right so private credit is origination
and payment collections for credit that falls outside of the corporate bond world. So currently right now that includes maybe doing direct lending or small business financing to businesses in the US. I mean we have players in the crypto space like Goldfinch and Percent that already do this.
But now making it such that, you know, borrowers can, you know, lenders. So those with stable tokens can essentially get KYC AML, the buyer volume, get a credited buyer volume. And then automatically provide their stable liquidity, stable
points into say an automated loan vault that will then be drawn down by an originator, a loan originator, a small business loan originator, or a supply chain financing or factory company that they can then pretty much access that and then repay automatically is one of the ways volume is looking to explore
Web 3 security to manage and automate the movement of funds, right? So what is the security layer the automatic payment and automatic collections of funds between lenders and then of course borrowers or essentially private credit funds or money market funds so private credit funds generally
And that is non-correlated with crypto. So really exciting way for volume to do that. There are features coming in the next release of Paloma that will focus on these types of user-friendly
use cases and these types of security. So today on the Paloma testnet, Paloma v1.3.1 will be upgraded and we'll test those for a few days until we will put together a proposal today and release it such that we'd like the community to vote on upgrading to 1.3.1.
1 on Paloma and then 1 2 dot 1 on Pigeon. These two new upgrades will allow volume to deliver real world assets in crypto functionality as well as some of the automated functionality we were talking about. This leads to bad later happiness, right?
The main goal of volume is to really make sure that the Validator network is happy. And that means covering the cost of running these data centers. So, Pulum of E1 will come with additional access controls for security, but also a few other features that increase Validator happiness. One, reduce Valset updates, so all those refunds
that validators were sort of like, "Hey, what's happening in my refund?" They don't have to worry about those anymore because the file set updates, instead of being now done every time, there's a change in the validator powers, which could be every minute or every day, will now, file sets will now be reduced to publishing once a month. And that, for
volume of publishing means that validators can now launch more chains with the same minimum 0.05 of the native token, but instead of 0.05 of the native token, but now instead of having a constantly worry about the funds being drained and replenished for
with this little activity that's just once a month refund, which is very, very easy for validated to manage. Also, faster message processing. So to be able to move money in and out of these fixed income treasury management type products like on-dough finance and like
volume private credit, volume will need pigeons to move much faster than they're moving today. Because we've only been able to test volume and production very recently as of two the three weeks ago, we now have the features that that and showed up and there were issues that did not show up in private testnet or the public testnet, only show up in production because that's when things really, you know,
The rubber hits road, a lot of these features will enable pigeons to move much faster. So we want faster pigeons, and they want them consuming more jobs, because the more pigeons go faster and the more jobs they can deliver means the more revenue for validators. And we want validators to get revenue for doing useful work of relaying messages.
And so there you have it. That's the volume update today for Paloma, Paloma features. I want to say thank you, Field Fairy, for the awesome debrief on real-world assets in crypto with on the finance. Thanks to the volume team for shipping. Thank you, Ter.
You got it and I want to say thank you to all the validators in the Pelloma network. It's been a year of continuous releases, continuous improvements, continuous shipping and we are getting ready to make sure that validators can leverage Pelloma as a revenue generating profitable data
center for the efforts in crypto. And it doesn't require just depending on the price of grains because if more volume is going up, the price of grains will go up as well. So we hope that that loop works. So that's it for us today. We'll see you guys next week. Rock 'n' roll, fly safe, queue the music, and remember to upgrade.