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ZK Series Part 1
Recorded: July 4, 2023 Duration: 0:28:19Space Recording
Full Transcription
Awesome.
Just wanted to wait a few minutes for more people to join us.
But for those who are here, my name is Tim, the host for today's KuCoin Fireside Chat,
as well as the head of social media here at KuCoin.
And so this week we have a three-part series all about Zero Knowledge ZK and have multiple guests from different projects using the technology join us today.
And so today's our first part, part one with A0, and I feel very lucky and happy to have Anthony, the co-founder of A0, here with us.
Anthony, do you want to go ahead and start with a high-level introduction to your background as well as A0?
Sure. Hi, everyone. Very happy to be here and thank you for hosting the space.
So my background is essentially I've been working on Aleph Zero since early 2018 with three of my co-founders.
I'm the only non-technical co-founders, so I'm responsible for all things, business, marketing, operations, as well as the product from a user standpoint.
So how does the front-end look like? How do we ensure that we've got the smooth interactions possible and so on and so forth?
And should I jump into what A0 is already or do we want to take a break?
No, let's dive straight in. So talk about Aleph Zero, what it is. Just a general introduction for those who might not be so familiar with A0.
A0, sure. So Aleph Zero is a layer one. We started with developing a new consensus protocol back in 2018 and the idea was to boil things down, was to essentially use a directed data-equipped graph structure as an intermediary data structure.
So what it resulted in was fast block production times and a finality that is still currently at around 900 milliseconds.
So essentially, let's build a fast network that we can also scale and that wouldn't have issues with decentralization.
So currently, we're on the way to decentralize the network. Right now, we've got 125 validators. The mainnet is up and running. The smart contracts are up and running.
And our main goal for this year is to onboard teams to sort of work in this environment, as well as build two products in-house.
First one being common and the second one being liminal.
Sort of the dev environment in Aleph Zero is based on ink. Ink is a new, let's say, it's a Rust EDSL. So the smart contracts are written in Rust and specifically ink.
Ink itself was developed by Parity Technologies. And it's a WASM-only environment.
So Aleph Zero is not EVM-compatible because we believe, at least for the moment, there's just too much sacrifice on the performance side of things.
Broadly speaking, privacy-enhancing L1 with a novel dev environment, new language, that is also used throughout the Substrate and Polkadot ecosystem.
So that helps with adoption because developers don't have to do everything from scratch.
And that's pretty much it. As far as the problems that we seek to solve, it's essentially to enable users and builders to benefit from both privacy as well as speed.
Because we do feel there is a significant gap in the market when it comes to combining these two.
Got it. So I think, yeah, I think that's a great intro and very, very clear problem you guys are trying to solve, you know, privacy scalability as well as speed.
And given that this is obviously a ZK series, talk to us about how you guys are using ZK technology and maybe take a step back.
And I know you mentioned that you're not technical, but maybe give a high-level overview of ZK technology overall and its benefits in blockchain.
Sure. So I think the simplest way to explain ZK or zero knowledge is that one can prove that a given statement is true without revealing the contents of that statement.
So imagine like a real world scenario where you go to a store and you want to buy something from the shelf that says, you know, 18 or 21 and older.
And you need to prove that you are of age without revealing how old you actually are.
So ZK is something that would theoretically or practically even enable that.
And in the blockchain space or in Null of Zero's case, we believe that it's an amazing, you know, tech to essentially enable private DeFi at scale.
So we've got two products that are going to be powering the ecosystem on that front.
And the first one would be something called Liminal, which is a privacy framework that is going to be integrated with all the ecosystem products and teams that want to use it.
Essentially, it's a ZK framework that also enables something called MPC, because when it comes to ZKs, they only enable to achieve, say, a local private state without achieving the global private state,
which is which is which is doable via MPC, which is a short for for multi-party computation.
And when it comes to Liminal, like the first product in that framework is something called Shielder, which is a concept that some of you might be already familiar with.
So effectively, it just enables enables a user to shield their assets from the outside world.
And so, for instance, you want to execute a trade or execute a transaction and you don't want to the world to know about this.
Then you would use then you would use Shielder to to to to to essentially well shield as the name suggests whatever is going on on the chain.
And that's I think that's that's that's that's that's that's an intro that should give enough of an overview into what ZK is capable of doing on the on the blockchain level.
Obviously, we we can talk about other use cases and that, for instance, in the medical space and identity and so on and so forth.
But when it comes to DeFi, it's primarily used to shield assets and then shield assets at scale, for instance, with decentralized exchanges.
Yeah, I like that analogy that you mentioned earlier about, I think, liquor store, right?
And not revealing the exact age.
So so that makes sense from a privacy standpoint.
Can you talk a little a little bit about scale or speed?
How does ZK technology help with that?
Yeah. So ZK itself is slow and MPC is even slower.
At the moment, for instance, in our in our internal benchmarks, we're looking at, you know, the ZK is something that a user or does a zero proof is something that the user generates locally.
So, for instance, how how does the user journey look like?
Like you use a wallet.
Let's say you've got 500 A0 there and you want to, well, shield them.
So you click on a button that says shield and then your device, whether it's a phone or a laptop or whatever else you're using, will take some time to compute the proof part of zero knowledge proof.
So currently it takes between three to seven seconds on different devices.
Obviously, the more powerful the device you're using, the faster it's going to it's going to be.
However, once the assets are shielded, then you can just freely use them.
So it's an operation that you do and that you do initially.
And then you're you're you're you're you're good to go.
And the speed part in LF zero is mostly due to the due to the consensus protocol design, because if we, for instance, look at different chains based on the substrate stack, which is also what we're using.
And they rely on the data from Polkadot and what what what our consensus brings to the table is essentially that in the other case, you've got the sort of the final time to finality of around six seconds, six seconds and block production time of six seconds.
And in our case, it's it's less than a second.
So from a user standpoint, it essentially feels on the front end like the blockchain wouldn't be powering whatever product you're you're using.
It's just like really, really fast.
But the privacy side of things, it's going to like it's going to be get better and better as we use, you know, more powerful devices.
But in any case and in any network, any any network that uses ZK, you're going to need to generate the proof locally, which will take a few seconds.
Got it. And I'd like to shift the focus of the conversation a little bit to to compliance, right?
So obviously, there are some compliance and regulation challenges related to on chain privacy.
Maybe talk to us a little bit about that and how you guys plan to tackle those challenges.
Sure. So I would say that from a high level standpoint, I will look at the look at it this way.
You've got privacy coins like, say, Monero and Zcash and so on and so forth.
And then you've got what we internally called like programmable privacy.
So I think most of the, say, regulatory issues relate to privacy coins themselves.
And in our case, it's a it's I would say it's a bit simpler because A0 itself is not a privacy coin.
You use that sort of on the on the second layer just to shield the assets.
And then A0 also received a no action letter from FINMA, which is a Swiss financial regulator.
And the no action letter essentially means that there are no, well, the AluZero Foundation can launch the token or the coin.
Now, when it comes to general compliance or regulatory challenges in the privacy space, there are not too many things that are illegal, I would say.
We're more of an opinion that there is lack of regulatory clarity in this case.
And so projects need to present sort of a proactive approach.
So we can think about this either as a compliance or as a fraud protection, which is also what we're steering towards.
So internally, we're talking about how to ensure fraud protection, how to make sure that the protocol doesn't support or doesn't enable illicit activity.
For instance, there is a there is a bridge hack and somebody is looking to sell the funds that they just stole from from from from that bridge hack.
Then how do we disable, you know, or how does the protocol disable them from from from from using liminal, from using shielder, from using decentralized exchanges?
And we've got a couple of countermeasures on that front.
So the first one would be an on chain identity system that one of our ecosystem startups, A0 ID, is working on.
Second would be an integration with coin firm and chain analysis, which which which are which are AML on chain AML providers and analytics tools.
And in this case, essentially, the system would be able to recognize if a user's address interacted with some of the other addresses that, you know, were, say, a part of a hack or some other illicit activity.
Largely, I would say, I would say it comes down to having a like a version of proof of innocence that is known from other solutions.
But in our case, it would be also slightly, slightly enhanced.
Got it. So talk to us a little bit about the use cases and what kind of use cases do you see as as a perfect fit for the network?
Sure, sure. So I'm going to talk about ecosystem use cases first and then maybe talk a bit about our our internal product as well.
So this year, we're we're focusing on onboarding DeFi builders first and foremost.
So, for instance, we've got we've got a team that is working on liquid staking that is led by Stephen Novenstern from from from from Pangolin.
We've got a domain service that I mentioned, a zero ID.
This is led by two gents, Mike and Dennis, who previously won the ETH Warsaw hackathon.
So we've got a couple of decentralized exchanges.
We're also seeing a number of, say, grant submissions from teams building real world asset protocols.
So RWA for short.
And here we're working with a team building EDX, European Digital Exchange.
Essentially, they are, I believe, one of the first teams to be building a securities and bonds exchange on chain in accordance with something called the DLT pilot regime,
which is like a regulatory sandbox of the European Union to to work on, you know, essentially RWA exchanges.
And we also we also signed a grant agreement with a with a second use case that we're going to be presenting presenting soon.
And generally, you know, the goal is to is to simply establish a solid DeFi foundation for for the LFCR ecosystem.
And beyond that, we want to focus on gaming, especially the sort of the healthy side of gaming that is not necessarily all about, you know, farming rewards and so on and so forth,
but an actual actual fun and actual stories and then creatively uses on chain economics to enhance that experience.
So we've got a we've got a we've got a wonderful team working on something called Darkverse, which is a I would say an RPG game built by people from the gaming industry and not necessarily from the crypto industry.
And then we've got a bunch of smaller productions that will focus on presenting like a sort of like a bet to earn model where you bet on an outcome and then you see what what happens while while, say, for instance, there is a there is a game that is building like those simple tanks,
but in a very beautiful graphic, graphic environment and that's that's well, there's there's over 30 use cases right now that that have received and that have received grants from the from the foundation and we are very happy to to see interest because it's not easy for developers to interact with with a with a new environment, new language and also build on a wasom only wasom only network.
And then it comes when it comes when it comes to the internal product of the of the LF zero team, this is going to be called common.
So it's a it's a decentralized exchange that supports all the privacy features that the protocol has to offer.
And, you know, we believe that DEXs are essentially public goods.
So we just want to build this and let the ecosystem use it if they choose to.
And long story short, this is going to be a combination of an AMM model, so an automated market maker model and private, sorry, and an order book aggregator for all the DEXs in the ecosystem.
Um, and that's, I think, yeah, that would be an intro to, to what is currently being built.
Awesome.
And then, um, finally, last question before we move on to the audience section, I'd like to know, um, from your perspective, what is the main or the main target audience for for LF zero?
Uh, sure.
So like from, from, from what other, like what, what, what, what all L1s really are, you know, just, just really platforms for, or environments for developers to build apps.
So, um, we have the user groups defined first and foremost as developers, developers then, uh, build the app layer and the app layer brings, um, your end users in.
Um, so for us, the main focus is to optimize the developer onboarding, optimize developers experience, make sure there is enough, uh, say open source code that they can rely on, that they can use to speed up their, their development process.
Make sure there is enough education so that they can work in a, sort of like a self-service model instead of, for instance, asking the, uh, the team for, for, um, for, for support.
And this is not because we don't want to provide support.
We do, of course, but it's just faster for everyone when there's enough, there's enough educational materials on, on that side.
Um, then obviously we've got, um, say, uh, enterprises who, uh, are more and more open to using public chains instead of, um, permissioned environments, uh, in the past we've had, uh, you know, corporates using, say, uh, Hyperledger, um, or, or, or, or Corda, which is still, still very much usable.
So, uh, and now we're seeing a little bit of a shift from, uh, yeah, from, from, from a few months back to, to public chains.
But then again, still, uh, if we're talking about, um, for instance, corporate use cases, they not, don't necessarily want to have all their data or their users data public, uh, or publicly available on chain and hence, again, the, the usefulness of the privacy stack.
Cool. So, uh, we have some time, uh, left here for some audience questions.
Um, so if, if any of you guys have some questions, please, uh, just request to speak and I'll select you guys from the audience.
Uh, first up we have Jolly, go ahead.
Jolly, uh, please unmute yourself. I think you're, you're muted still.
All right. If not, let me get our next audience member up here. Give it one second.
Cool. Uh, Tolga, do you have a question?
Uh, yeah, man. Uh, uh, uh, my question about actually ecosystem funding program that you guys initiated two and a half months ago, uh, what is the situation about the program and how much, uh, grant allocated in, I mean, portion or, you know, in figure, uh, so far?
Thank you. That's my question.
Um, sure, sure, sure, sure. So, um, for instance, in June, we've seen 44 submissions in June, June alone, you know, in the month of June, we've seen 44 submissions and signed, um, signed out of that. We signed 11 agreements. And this is, um, in total, I would say that I would have to look up the exact number, but we have around 30, 30 agreements signed.
And broadly speaking, this is everything from, um, tooling or educational activities to teams working on, uh, complete, complete products. So the Grants Act, um,
for other developers. So for instance, if the foundation spends the funds for a, for a grant, there are certain, um, um, certain characteristics that need to be, need to be, or certain goals that need to be met in, in order for a team to be eligible for, um, for, to, for a grant.
For instance, the code has to be open source, or if it's, uh, say, uh, a use case that cannot open source the entirety of the code, then there needs to be some sort of open learning, um, um, uh, happening so that ultimately we can achieve like this, um, snowball effect where there's, for instance, now there's, um, 30, 30 teams, um, building.
If once they all deliver their products, there's going to be a lot of, um, value add just from the code being available alone so that others can, can look into it.
And, and as far as amounts, like the, the goal for the foundation is to, I would say distribute around 20, but half of this in the next, um, well, depending also on the demand, but in the next two, three, uh, years.
Um, just to make sure that the, uh, well, the, the network adoption is, uh, is happening because the mission of the foundation is to make sure that the network is, um, used and is becoming more and more popular.
Awesome. Okay. So next up we have Maya. Go ahead.
Hello. Can you hear me?
Yes, we can.
Okay.
Okay. My question is, what is the most ambitious goal of your project? Could share with us any upcoming update and features?
Yeah, sure. Sure. So I would say that, um, um, solving the private DeFi, um, while, um, not being a burden to the users.
And what I mean by that is right now, if, um, users want to use privacy solutions, on-chain privacy solutions for, um, for DeFi, um, uh, they oftentimes will, um, struggle with, for instance, the coins being accepted by, uh, exchanges because at some point they interacted with, uh, um, with an address that was, that was flagged.
So what we want to make sure is that we're able to, um, um, help facilitate the creation of an environment that, uh, allows the users to use private DeFi in a fashion that is not seen as, um, um, you know, risky, essentially.
Um, so I, I, I think if we track that, then that's, that's big enough of a, of a goal to have.
Awesome. I think that's a great way to wrap things up.
Um, Anthony, I'd like to give you the last word before we, uh, end the Twitter spaces though.
Um, maybe you can let the audience know if you have any final thoughts or where they can find out more information about Alaph Zero, um, or anything else you'd like to share.
Yeah, definitely. So if, if you're interested in building or just getting to know the network, please head to alaphzero.org.
It's Aleph, not Alpha.
Um, uh, join our Telegram, join our, our Discord at discord.gg slash, uh, Alaph Zero.
Um, and we're very happy to talk with you.
We're very happy to meet you.
And if you're a developer, then we're definitely, uh, happy to support your, um, uh, your efforts.
So that's pretty much it.
Great. Uh, thank you so much again, uh, for taking the time to, to, to join our Twitter spaces.
Uh, much appreciated and extremely insightful.
Um, and for those listening, obviously, um, this is not financial advice and only for informational, informational purposes only.
And yeah, so looking forward to the next part of the ZK series, which is, uh, I believe tomorrow, um, at 9 a.m. UTC.
So see you guys there. Bye-bye.
Thank you so much for hosting. Thanks everyone for being here. Bye-bye.
Host
KuCoin
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