Findora's layer 1 protocol prioritizes privacy with zero knowledge proofs

0:01i'm ashton anderson from block west capital for investment pitch media in the Crypto Coin Show and today on blockchain interviews we have warren paul anderson the vp of product at discrete labs the team behind fendora warren welcome to the show and thank you for taking the time to come on thanks a lot for having me ashton excited to be here yeah i'm excited to dive into this

0:22discussion i first spoke with fendora over a year ago and i know your team has been working on quite a lot in the year a year and a half really since we last spoke i would love to get the viewers up to speed by just getting an overview and a high level solutions of what findor is working on and what the team at discrete labs is focused on with

0:43fendora yeah sure so fendora is you know layer one blockchain with programmable privacy one of the teams that's working on is discrete labs discrete labs has actually grown to over 60 people based in both north america and asia and street labs kind of maintains a lot of the code base related to fendora using the programmable privacy and

1:10how we use programmable privacy we probably get into it a little bit but we basically use a few different technologies one called zero knowledge proofs and the other called multi-party computation and these are kind of fringe technologies that have found their way into the blockchain space we anticipate them being used a lot more to do things like you know preserve

1:32privacy for users definitely and yeah i have heard of both of those but most of the time you know people just hear zero knowledge proofs and they just think okay zero knowledge like it must be good you know i don't really know about the intricacies of and sometimes you don't need to know exactly how but it's great to get you know sort of a high level i would love you

1:54know if you could talk a little bit about the problems in blockchain right now and in preserving privacy and identity management in why technologies like zero knowledge proofs and secure mpc are needed you know in the way that blockchain is currently run is people are are people's information really vulnerable to hackers and just public blockchain information or

2:20like why is that technology necessary to bring in with fendora yeah something we've identified you know some privacy issues in the blockchain space but also they kind of applied to you know all of the digital economy that's growing you know and there's three particular problems in blockchain one was a user privacy problem so we're seeing you know

2:44lots and lots of you know these transactions are that are on some of these blockchains are actually they're not anonymous they're actually semi-anonymous and what they call studio anonymous and they're becoming less anonymous you know as as time goes on so as people you know create more exchange accounts they leave their identity information

3:07through a process called kyc or know your customer that's effectively like putting a fingerprint on the blockchain right the more times they do that the more fingerprints they leave so and that's okay if you know that information is in the hands of the right people but it's not okay if it gets in the hands of the wrong people so definitely there's

3:28going to be continued user privacy issues because these transactions are radically transparent another one is actually more along the lines of a liquidity issue so you know because these transactions are so transparent what we're seeing is a lot of the institutional capital that's you know sitting on wall street we're talking

3:54in the order of you know trillions of dollars you know that's just trading you know throughout the day is actually kind of sitting on the sidelines because they want to enter into this space but they don't want to reveal the you know competitive intelligence that you know they protect by by banking you know with regular you know traditional financial institutions

4:19it's not great that a competitor you know knows your bank balance or knows your your crypto balance right and everyone knows you know that tesla bought 1.5 billion dollars for the bitcoin but everyone's also going to know when tesla sells 1.5 billion dollars worth of bitcoin so you know with transparency comes you know concerns around privacy and in actual competitive intelligence

4:43that gets revealed so those are those are two really big problems that we found and they're not going to get any better as as you know crypto becomes more mainstream these problems become you know more ubiquitous and so really we wanted to build something you know using zero knowledge proofs that we could actually help preserve the privacy without you know

5:06Reducing the actual integrity of the core blockchain definitely and yeah it's it's funny how you know retail investors they just they're not so concerned about you know they're more concerned about you know what price that i buy bitcoin at and then when large institutions come in with trillions of dollars there's so many more variables of like you know

5:28who's gonna know when we bought this what at what time should we buy it where should we move the money from where should we store it and with fully decentralized public blockchains you know that can all be seen if they see the transaction of where they bought it and then you can see their balance and if they move it you know there's all these whale alert platforms and tracking

5:48for blockchain explorers you can easily see if tesla starts moving that money before they put out a press release you know the second it happens you can get a notification so obviously there are some things needed for these large institutions and just for general privacy as well to be able to you know sort of protect some of that information and you mentioned their zero

6:09knowledge proofs can you talk a little bit about you know what exactly does zero knowledge proofs do and if you are a large institution that's gonna make a big purchase or try to hide information how exactly does zero knowledge proofs help with that yeah sure so zero knowledge proofs are something that were invented actually several decades ago it's a cryptographic

6:32method that allows you to effectively share information without actually showing it and so we call it kind of sharing without showing and concretely what that means is you know if i wanted to prove to you that i was you know over the age of 21. typically in the real world i'd have to just show you my id and you look at my id but then you also see where i live

7:00you see you know my all the other information that's on that id that isn't relevant to my age right and with the zero knowledge proof actually what i can do is just show you a proof that i'm actually over 21 or over and you can compute that proof verify that proof and then we know that's that's a that's a that's a legitimate statement that i'm over

7:2521. and what's nice about that is that i actually don't have to reveal my actual age i only have to reveal that i'm over 21. so that kind of process you know applied to lots of different use cases in financial technology especially is becoming you know really really useful so they're being used now to do a lot of scalability you know on different

7:52networks by you basically they're compressing a lot of the blockchain data into a very succinct form and being able to show a proof that this is valid and then you can kind of verify the actual information from from that proof but we're also you know we're discrete labs is using zero knowledge proofs particularly for privacy so being

8:17able to use that same kind of technology to prove that these transactions are actually happening without actually revealing them very cool and i know we spoke you know quite a while ago but i believe the platform is already in development can you talk about when fendora started what you've been working on and where you're at right now yeah sure so i joined the team in

8:42mid-march we were right then we were about to launch or call mainnet beta which we did at the end of march and the phase right now is the network is in is a mainnet beta which were basically it's a stripped-down version of you know of an existing you know network it has very simple transaction types being able to send and

9:11receive the native token fra both confidentially and you know transparently and then also you can issue tokens similar like how you would on ethereum and create tokens actually both confidentially and transparently so that's a pretty interesting kind of use case because that would allow for something like stable coins and private stable coins to be issued on fendora

9:38And other types of assets so that's kind of the basis right now of what the fendora main net looks like we have a couple weeks ago a couple months ago we released proof of stake staking on test net so it's running you know the fully you know staking with delegation because fedora actually runs the tendermint consensus so

10:06we're able to inherit a lot of the robustness of the tenor tendermint consensus mechanism to allow for proof of stake so on test that we're running staking we expect to you know push that into mainnet in the next next couple months and then we are about to roll out actually another kind of developer network that is going to have essentially the latest kind

10:30of beta releases coming out that will be deployed on both testnet and mainnet wow very cool and it's great to hear that you can also create an ecosystem inside of fendora create you know native assets that have that privacy preserving structure as well that's really interesting and i'm excited to see how that plays out i think the developer ecosystem is going

10:52to be a great addition and something that's needed to help bring more people in to help develop on your platform because there's so many protocols coming out with different developer developer environments and really it's about making it easy for developers to start working on fendora i'm curious you know you have this full ecosystem with fandura and the

11:16ability to create tokens but i'm guessing that you know i've spoken to the tendermint cosmos team and i know they're all about like the inner blockchain communication and working with other blockchains if the if an institution is trying to buy bitcoin or ethereum or something that's not related to the fendora layer one protocol specifically does the

11:38technology privacy preserving does that apply to you know any kind of transactions outside of pandora as well it's a really good question so the vision is yes we want to apply you know fendora's journal knowledge proof kind of privacy preserving technology to other blockchains and that's really kind of the pillar that we're standing on with interoperability

12:03being able to do cross-chain interoperability but the vision is you know the execution is much more difficult than the vision right because a lot of these these networks the fedora blockchain is a utxo based blockchain which is lends itself better to preserving privacy because there's it's effectively a stateless you know blockchain there's no

12:28actual state that's being stored so you can actually you know wrap that into a privacy preserving protocol most of the other you know networks are becoming you know more and more stateful so ethereum is an account based you know network so bringing privacy to ethereum is actually quite a challenge but we're going to be releasing some things on to the

12:52developer network you know here in the next couple couple weeks that will actually lend itself kind of down that path because we think that preserving privacy you know on fedora first is obviously kind of the first staple and then the next is starting to introduce that into other networks but it's a step-by-step process it's going to involve a lot of

13:13critical work on you know our cryptographers you know actually writing you know and implementing different zero knowledge proofs for more complex statements and figuring out some breakthroughs on that field definitely yeah a big work in progress and i know i can imagine that the fendora ecosystem itself is already a huge task to take on in developing the

13:39developer ecosystem building out the a token infrastructure to build tokens on top i'm also curious more about the fra native token that you briefly mentioned so far you mentioned that you can do staking i'm curious on what else you can do with the fendora token and how it plays a role into the ecosystem in the protocol yes just like most networks you know

14:05fendora has a native token called fra it's primarily used to you know as gas to pay fees it can also be used as the native token to do asset transfer but what's kind of unique about fendora among the other kind of privacy blockchains is that you can actually issue private tokens so you mentioned before you know that there's twitter

14:31bots like every time there's a movement of funds when it applies to stable coins for instance like tether or usdc the same rule applies every time more tether is minted some twitter bot you know publishes how much that is and that's because you know the balances are radically transparent tether but i think most people would prefer

14:57that their wallet balance in fiat currency or stable coin isn't revealed so we expect to see more and more stable coins start to seek out you know these privacy blockchains to be able to issue you know tokens and maintain a balance in a confidential way so that they're protecting users privacy so that's one of the unique properties of fendora as it relates to

15:23some of the other privacy blockchains very cool and you mentioned that the full main nets coming up the mainnet beta is out can you talk about what are the major next steps that you and your team are focused on towards the release of the main net and just towards the really the end of the year yeah sure so the next few weeks we expect you know

15:46The test net to reach sufficient stability you know for the community to adopt on mainnet which will include staking and delegation there's a whole tokenomics model that's you know been applied to generate apy for stakers and delegators which will help kind of you know build more of the ecosystem around you know around staking also you know we're

16:15gonna be introducing more programmability into into the network i won't say exactly which networks we're going to be integrating into first but we'll just say they're they're the bigger ones and we expect to kind of have that kick off more of the cross-chain kind of compatibility interoperability of different assets so that we can start to build

16:43liquidity bridges you know into those networks with a follow-up to eventually introduce privacy to those networks great to hear warren and for the viewers that are looking to follow along with the release of the mainnet learn more about fendora fra and get involved in the community what's the best way for them to get involved probably the best access points just

17:07pandora.org there's a lot of information you know the teams are constantly updating you know the site to make sure it has the most relevant information and then you know we're on twitter with the fendora official so catch us there obviously lots of telegrams and then our discord channel is growing you know pretty considerably if you're a

17:26developer you want to get involved in the project sounds great warren i will leave all those links in the description box below as well all the best on fendora moving forward and let's follow up in the near future thanks a lot ashton you