Findora's Anderson: Transparent Ledgers Keep Wall Street Capital on the Sidelines

Ashton Addison: Can you give us an overview of what Findora is working on and what Discreet Labs is focused on?▶ 00:22

Warren Paul Anderson: Findora is a layer 1 blockchain with programmable privacy. Discreet Labs is one of the teams working on it, and it has grown to over 60 people across North America and Asia. We maintain much of the Findora code base. For programmable privacy we use a few technologies, mainly zero-knowledge proofs and multi-party computation. They're fringe technologies that have found their way into the blockchain space, and we expect them to be used a lot more to preserve privacy for users.

Ashton: What privacy problems does blockchain have today, and why do zero-knowledge proofs and secure MPC matter?▶ 01:32

Warren: There are two big problems. The first is user privacy. Transactions on many blockchains aren't anonymous. They're semi-anonymous, and they're becoming less so over time. Every exchange account you create leaves identity information behind through KYC, which is effectively putting a fingerprint on the blockchain. That's fine if the information is in the right hands, but not if it reaches the wrong ones. The second is liquidity. Trillions of dollars of institutional capital on Wall Street is sitting on the sidelines. Those firms want to enter this space, but they don't want to reveal the competitive intelligence they protect by banking with traditional institutions. It's not great that a competitor knows your bank balance or your crypto balance. Everyone knows Tesla bought $1.5 billion of bitcoin, and everyone will know when Tesla sells $1.5 billion worth. These problems only become more widespread as crypto goes mainstream. So we wanted to use zero-knowledge proofs to preserve privacy without reducing the integrity of the core blockchain.

Ashton: What exactly do zero-knowledge proofs do, and how do they help an institution making a large purchase?▶ 05:48

Warren: Zero-knowledge proofs were invented several decades ago. It's a cryptographic method that lets you share information without showing it. We call it sharing without showing. Say I want to prove I'm over 21. In the real world I'd show you my ID, but then you'd also see where I live and everything else on it that has nothing to do with my age. With a zero-knowledge proof, I can show you a proof that I'm over 21. You verify it, and you know the statement is legitimate, without my revealing my actual age. This is becoming very useful in financial technology. Zero-knowledge proofs are being used for scalability on different networks, compressing blockchain data into a succinct form and proving it is valid. Discreet Labs is using them particularly for privacy, to prove that transactions are happening without revealing them.

Ashton: Where does the platform stand now, and what have you been working on?▶ 08:17

Warren: I joined in mid-March, just as we were about to launch what we call mainnet beta, which we did at the end of March. It's a stripped-down version of an existing network, with very simple transaction types. You can send and receive the native token, FRA, both confidentially and transparently. You can also issue tokens, similar to Ethereum, again confidentially or transparently. That allows for things like private stablecoins to be issued on Findora. A couple of months ago we released proof-of-stake staking with delegation on testnet. Findora runs Tendermint consensus, so we inherit a lot of its robustness. We expect to push staking to mainnet in the next couple of months. We're also about to roll out a developer network that will carry the latest beta releases, deployed on both testnet and mainnet.

Ashton: What role does the FRA token play in the ecosystem?▶ 13:39

Warren: Like most networks, Findora has a native token, FRA. It's primarily used as gas to pay fees, and it can also be used for asset transfers. What's unique among privacy blockchains is that you can issue private tokens. Take stablecoins like Tether or USDC. Every time more Tether is minted, a Twitter bot publishes how much, because the balances are radically transparent. I think most people would prefer that their wallet balance in a stablecoin isn't revealed. We expect more stablecoins to seek out privacy blockchains so they can issue tokens and maintain balances confidentially, protecting users' privacy.

Ashton: Does Findora's privacy technology apply to transactions on other blockchains, such as Bitcoin or Ethereum?▶ 10:52

Warren: The vision is yes. We want to apply Findora's zero-knowledge privacy technology to other blockchains, and interoperability is a pillar we're standing on. But the execution is much harder than the vision. Findora is a UTXO-based blockchain, which lends itself better to preserving privacy because it's effectively stateless. There's no actual state being stored, so you can wrap it into a privacy-preserving protocol. Most other networks are becoming more and more stateful. Ethereum is account-based, so bringing privacy to it is quite a challenge. We'll be releasing some things on the developer network in the next couple of weeks that move down that path. Preserving privacy on Findora is the first staple, and introducing it to other networks comes next. It's a step-by-step process, and it will take critical work from our cryptographers, writing and implementing zero-knowledge proofs for more complex statements.

Ashton: What are the major next steps between now and the end of the year?▶ 15:23

Warren: Over the next few weeks we expect the testnet to reach enough stability for the community to adopt staking and delegation on mainnet. A tokenomics model has been applied to generate APY for stakers and delegators, which will help build the ecosystem around staking. We'll also introduce more programmability into the network. I won't say exactly which networks we'll integrate with first, but they're the bigger ones. That should kick off more cross-chain compatibility and interoperability of assets, so we can start building liquidity bridges into those networks, with privacy to follow eventually.