Alex Shipp on Offshift's privacy solution for Ethereum DeFi

0:01i'm ashton addison from block west capital for investmentpitch media and today on the Crypto Coin Show we have alex ship cso of offshift alex welcome to the show and thanks for taking the time thank you very much it's a pleasure to be here i'm seeing one of the emerging trends in blockchain right now as pri fi privacy which i feel like is very needed with

0:24these pseudonominous not really anonymous transactions where people can look into your ethereum or bitcoin balance if you've sent them a transaction they can see everything in your account and i feel like there's some solutions to be had there i'm interested to hear what your team is working on in prify so let's just dive straight into it i'd love to start

0:45with just an overview of offshift and the solutions your team's bringing and then we'll dive into everything in privacy yeah yeah so offshift is pioneering prify private decentralized finance which is really all about bringing privacy to b5 on ethereum layer one i know you're sort of an and you know an og so to speak you've been in this space for a while and the space

1:04looked very different in 2016 2017 where you could hold bitcoin you could transfer it and you could do the same thing on monero and there were very few trade-offs to doing so now as we sort of seen this emergence of decentralized finance of nfts and insurance protocols and a lot of other things things have changed a lot which is where you can't

1:22really get privacy in this space and in order to interact with those things pursue yield provide liquidity etc you really have to forego your privacy and so there are a lot of people that are interested in privacy they do want to protect themselves for both humanitarian purposes and also for the you know as we see the emergence of this sort of data economy for the

1:40wealth that's vested in their data but they aren't willing to forego that access to defy and so there is a really huge sort of unserved demand for privacy in b5 and again that means on ethereum on layer one in these decentralized environments yeah definitely i feel like more and more people as they realize about the not your keys not your coins

2:03are moving away from centralized exchanges after they've either been hacked or you know had some kind of issues accessing their coins when they're giving their private keys to somebody else now moving to d5 and having full control but having to learn to use defy and with that sort of try to manage their own data and privacy and have their funds in order not scattered

2:25around and sort of controlling that so how are you guys exactly helping with that with the people that are using d5 yeah so i mean there but before that before i actually bring up our sort of solutions i'd like to mention you said something that really stood out to me about pseudonymity and it's a lot of people who don't really understand that as crypto actually gets adopted it's

2:44designed for transactions and when you have to pay someone or receive money from someone you know as someone who's in the space as someone who's working at projects and things you are paying people in cryptocurrency a lot you have a graphic designer and you have to pay them somehow and you get into these kinds of situations where if you're doing a lot of transactions you realize

3:00you need for privacy you're like do i really want graphic designer to see the salaries of everyone else on the team if you're paying someone to do something for a lot of people that are just sort of touching the space or just investing on the side as a sort of alternative investment they're not really aware of five 10 years 20 years down the line when there is real adoption it's totally

3:17it's it's beyond reasonable to have it just won't really be feasible if you have to constantly get new addresses all the time and figure things out so i do want to mention that because that's a really good point as far as privacy they're really two avenues to privacy one is anonymity which is where the individual is blocked they're shielded and the second is confidentiality and

3:37everyone sort of knows the motif where the president gets handed the manila folder and it says confidential in red letters and everyone knows who the president is and everyone knows that he has the information but they don't know the contents and that's very important so there are these two avenues right so anonymity we're working on we're building out a platform right now

3:54development's going really well that's called off shift and on and that's where you can take our native token xft and you can burn that to mint our add-on assets a-n-o-n usd btc etc and you become dissociated from your capital in the process and so you could say that you could draw a lot of parallels to tornado cash there although our solution is non-custodial and in the process

4:14you know you now own the synthetics and the synthetics are fully public standard 320's which means there are no barriers to integrations or future implementation or anything and so that's really exciting you know the doors to business development are wide open there so to speak and so there's a lot of like you can pursue yields and everything and again like it's really

4:31just dropping down these barriers and trade-offs to privacy where you can really participate in define it's up to us to get integrations and to work on that on the other end we have already developed you know a confidential solution the confidential solution is the really big challenge and it's really a major technical milestone for ethereum layer one which is where we employ

4:47bulletproof ck proofs to mint these zk assets obviously zk referring to zero knowledge which are you know what the synthetics are pegged to in other words you know whether it's peg to btc or usd and also the balance is totally hidden and so that is that is again a major technical accomplishment to be able to do that on ethereum layer one the challenge there which we can speak more

5:07about is like the related gas and how we're approaching that but yeah these two these these are two major solutions in ethereum be fine we're sort of tackling them both wow very interesting and what you mentioned there about the balances and the and the gas fees but i've heard of creating like a zero knowledge kind of layer where i get correct me if i'm wrong but from

5:30people that understand moving bitcoin into defy you know in the original way you would do it you would make like a wrapped bitcoin where you'd have like a w bitcoin that turns it into an erc20 compatible but still doesn't have the privacy functionality is it similar to that but you're adding in the zero knowledge proofs layer as well well for one though like that again that

5:52wrapping process involves some form of a custodial solution which in you know sort of introduces some elements of centralization these are really these these synthetics don't have any sort of wrapping involved i mean they are being minted it's really algorithmic you know and sort of what's happened with tara recently has created a lot of fear

6:09and uncertainty and concern regarding algorithmic stable coins but a better way of saying algorithmic is simply decentralized and you know we don't want to throw out the baby with the bathwater make her die was an absolutely brilliant platform that does something similar right they have a lot of collateral they have their assets but they don't but now they have a little

6:25bit of usdc but more so the diet isn't there's not a custodial account of the us dollars right and so when we want to just throw out these algorithms where we're throwing out these centralizations so we have to be careful there so these these assets are minted and we use chain link oracles to do it now when you talk about using a zk layer like employing some kind of a layer two

6:46that also introduces some element of centralization so there are there are conversations to be had there about that i wrote an op-ed recently in the define about this about some of the challenges that we're facing because you know simply put there's no such thing as a free zero knowledge launch they're very computationally intensive and ethereum we're at a very nascent stage

7:03right now so trying to do all of this really sophisticated cryptography and computation on chain does introduce some challenges it's it's kind of like trying to email someone a video like a 10 minute video in 1999 right the application potential is going to be limited by the infrastructure's capabilities so that's something we're taking into account we're working on

7:22optimizations we're looking at we're doing a lot of things and we're you know sort of keeping our community up to date there definitely and i think it's still hard to email people large videos that they're getting to now yeah yeah and now with you know with introducing these and non assets i feel like it's a for some it's a bit of a big step to

7:44move from centralized exchanges to decentralized and you know there's a few technical barriers to entry just understanding how it works especially if you're going into liquidity provision and stuff then you really have to understand the risks how much more of a technical step is it to take this step with offshift and make it more privacy enabled

8:07Well we're focused on making that additional step zero next to nothing and i think you know you do make a good point about the novel technical challenges and getting acquainted with sort of the ui ux but i think uniswap was really a brilliant platform because they showed just how easy trading cannons should be and we have a similar vision for ruin ux

8:26which is where you have what you what you start with and what you're shifting into and it's just those two it's a very similar ui ux to a standard amm or automated market maker and i think that in fact some people are finding that they prefer now indexes that's much easier than that crazy screen with all of the charting and stuff for a trader maybe this the

8:44centralized exchange is actually easier but on the other end certainly d5 provides some actually simple more simple user interfaces but to us principally we want to reduce the barriers and the trade-offs associated with privacy and yeah technology you know it shouldn't be for technically savvy people it needs to be i feel like being private today click here to be

9:03private that's it and so to even make it you know reduce that balance you know i would say barrier even more you know you don't have to go from x15 to zks is you could take f and we will leverage unit swap routers and so it will trade into exit fee burn and that all happens under the hood so you can go from any erc20 or fdf or whatever straight into the z cast the anon assets

9:24etc to the synthetic side okay that's great to hear and yeah yeah you're right about you know when you mention algorithmic i'm just thinking of the recent news and i'm like oh like you know yeah with luna being algorithmic but i do know maker dow being a decentralized solution has had a stable standing for quite a long time now and i do believe that's the

9:45future it's just about doing it right and i'm curious on the risks associated with the switching of the assets to and on assets and if there's a pegging debugging and how that works with your original assets if it's decentralized you're holding your original assets and they're and they're locked while using the anonymous assets or maybe you can explain that a

10:08little bit yeah yeah and i think it's really good that you're bringing this up because i do want to speak to tara and then i do want to speak to a little bit about you know how those tokens work we have really thorough documentation on our site you go to off shift.io you can look at our ecosystem white paper and then the off shifted on live paper so

10:24you get like a really you know good deep dive into tokenomics and we also have some simplified videos on our on our youtube channel our shift academy so i think like really the best place to start and to speak to is what's going on in the markets right now obviously no one likes to see this we don't root for prices to go down but during bull

10:42markets it's very difficult because it's very noisy it's very colorful and people are leveraging a lot of capital to scream louder than everyone else to get their faces up there to pull in celebrities and do things and so projects that are doing things right and doing things the real way have have trouble oftentimes we've we've had some trouble at times getting noticed for

10:58following our principles now people's attitudes are shifting when they see everything starting to fall off a cliff they're starting to say reflect on some of their investment principles and their approach and saying what am i really investing in am i chasing yields am i chasing speculation i really should be chasing utility and it's all about utility i think at the end of the day

11:16is how is this how are we adding value to users what market demand are we serving and like tara you know if you read their white paper and i think a lot of people that invested did not like you really should read white papers it's it's a really good practice the first the first sentence of the last paragraph of their white paper says if bitcoin

11:33confers immutability and ethereum confers express ability then terra offers usability and i think that's a really sort of they're referring to their price stabilization mechanics but anyone who's in the money game or the currency game where you can send these sort of stable coins over a low-cost blockchain like terra what they're essentially saying

11:52is that you know i mean anyone who wants to have this unit of currency the global the you know the payoff is really high if you win but for a unit of currency or unit of exchange utility is a function of adoption meaning that it can't be usable until merchants adopt it everyone holds it everyone understands it and so you have to introduce incentives you have to

12:12subsidize adoption you have to pay people to use it and that's not that's i'm not going to use the p word the ponzu it's called names or anything but it's it's just the way the nature of the situation so even for bitcoin bitcoin's a volatile instrument so people who buy it they believe that it's going to appreciate as a stable coin you have to pay out

12:31yields because it's not going to appreciate you have to have some form of senior edge or yields and you know they it's it's just that's the at the heart of keynesian economics fake it till you make it economics you need to get that thing used before you run out of capital to pay off those continue paying people and it's really challenging you know so

12:48to take a look at where we are relative to that kind of model is that we are on the opposite end because we are providing utility empirically and that is privacy via anonymity or via confidentiality which is that we're more like a decentralized you could say a business operating in this decentralized landscape which is that we're taking the time to develop and conduct research and

13:07we believe that there is significant demand for on-chain privacy and that demand will grow exponentially in the decade ahead and so for us adoption is a function of utility so we don't need to subsidize we're not paying people single assets taking we're not paying twenty percent like on anchor we're not paying five percent we're not even paying one percent for you to hold

13:26our assets or synthetics and you know 74 i think or 76 of all the ust in circulation was staked in ancient protocol so you had a lot of number countries and degenerates pursuing yields and that creates an unstable situation right so maker uses over collateralization but empirically we're not paying people to use our platform because we believe that what we're

13:44offering is of enough value for people to be using the platform and we will allow a market of whatever size to form around our synthetics yeah great point alex and yeah i think it's more about the utility and usability and not just the return because there is inherent value in the in you know what you're providing already yes that's the vision absolutely

14:06amazing and now i want to flip the switch for a second and talk about you know recent events i know you guys were at you've been doing the conference circuit and you've also been talking to some big names and i'm glad that you mentioned there about the celebrities and sort of reevaluating your investment thesis in the bear market and you know it really gets

14:25people thinking about how they're investing and i think privacy as you mentioned and obviously your team agrees building this solution that it's gonna exponentially be more important as we continue to grow i saw that you recently spoke with edward snowden one of the privacy oh geez about privacy and crypto i would love to hear you know what you took away from that

14:49conversation about privacy and crypto yeah yeah i really encourage everyone actually to go watch that because especially if you like long form stuff or mid-form stuff it's it's it's like 60 minutes of us going deep and it was titled down the rabbit hole cryptocurrencies ever receiving promise of privacy so you know if you've seen him on joe rogan if you've seen him at ethereal if

15:09you see him at various places he's talking about you know sort of data privacy online privacy really important stuff and also about like the geopolitical situation all that stuff but we were just let's narrow this in and talk about on chain privacy let's talk about cryptocurrency let's talk about zks talk about decentralized systems what does privacy look like on

15:26ethereum and so it was it was really i think for anyone that's in crypto it would be the best edward zone interview you could watch and sort of what we narrowed in on and like to quote him you know he said like he has said publicly that he says bitcoin and cryptocurrency are failing comprehensively and terribly on the privacy aspect and he said that

15:46any altcoin that isn't private is failing this is my position until we talked about that which is that privacy has sort of been like relegated to a sort of sub sector like a niche area of cryptocurrency and you know the term crypto implies encryption which is like the sort of that's the source of online privacy in the first place that privacy should be

16:06as long as this space as long as cryptocurrency is about individual freedoms and protections privacy needs to be front and center it needs to be an integral component of our systems and it shouldn't be sort of you know examined through the lens of some kind of market sector it needs to be unless there's a very particular use case that demands radical absolute

16:27transparency then like maybe government finances for instance or something like this but you know at the individual level because that was something we also talked about which is that you know the glenn greenwald quote that transparency is for people carrying out public power in you know carrying out public duties in place of public power privacy is for everyone else

16:46and so we need systems you know right now we have an inversion of that model where it's the exact opposite and so what we talked about really was yeah how can privacy be a part of we really need privacy on ethereum because ethereum is seems to be like to me the home or the hub for most of where this exciting development is going on and so we need to have privacy solutions there for

17:09people within the system and so it really go into a deep conversation about just how important that is and then at the end i asked him you know what it takes to really carry out and follow your principles into your last breath and he gives a really good answer about sort of his journey so i really encourage everyone to give it a watch wow incredible and great quotes

17:28there and yeah you're right about you know government funds like they're using taxpayer funds other people's money to spend and not as always transparent as it should be and speaking of privacy coins and not having you know balances that are shown it seems like monero is actually one of those coins that's not totally crashed like everything else in the market you

17:49know at least looking at the monero bitcoin pair it's doing relatively well i'm not sure what the other privacy parts of the sector but i do really like what you said there or i guess what stone said about you know an altcoin that doesn't have privacy function is just not good and i think reevaluating moving forward a lot it should be a standard for maybe they can

18:12introduce an ethereum standard where there's just more privacy in by default to like all coins that are created yes i mean i think you know what you're speaking to there like sort of on ethereum is like there is this principle challenge it's a really a technical challenge on the you know confidential asset side which is that ethereum employs an

18:32account based transaction model which means that the concept of an account exists at the core level at the baseline in the protocol whereas in you know a utxo model an unspent transaction output model most famously employed by bitcoin you just have these entries on the ledger a this walled address a sent this many coins to wallet address b and so if you can obscure or shield that

18:55information then all of these other concepts which are downstream abstractions that are handled by block explorers by wallet applications then they all become the accounts so to speak are really just abstractions and they're no longer they're no longer visible but when you have the account at the at the protocol layer you have to do a lot more work and it's a very big technical

19:14challenge and so we've been doing quite that's really why the technical challenge is so great and it's not surprising that a monero uses a utxo model and that a lot of privacy-centric solutions say let's build our own blockchain and establish it with parameters that are conducive to privacy-centric applications coming into this unfriendly ethereum environment that's designed for

19:34programmability that's designed for turing completeness state-saving stuff that you know dfi applications need to function well is really a tall order it's a big challenge yeah definitely great insights alex and what is the best way for people to follow along with the updates on off shift and on your work you know i mean off shift.io we really have a great web designer and a

19:57great graphic designer so i really recommend everyone go straight to the website you can see all our documentation there but please do follow us off shift xft on twitter and you can follow me alex chip xft on twitter those are like really the best things and if you really just want to go find us on youtube and you just want to learn we have off shift academy you can

20:13just search yourself off shift on youtube and we have some really simple content that you can you know digest in bite-sized pieces amazing thank you so much alex i will leave those links in the description box below for all the viewers as well all the best on everything introducing more privacy into ethereum and just helping the blockchain world i appreciate your

20:31efforts i'm looking forward to following up in the near future thank you it's a pleasure