Best Compute Over Private Data Application/Protocol - ETHOnline 2024

hi this is David Snyder one of the co-creators of lit protocol in this video we're going to cover what is lit some of the features available that are a focus of this hackathon as well as a number of ideas for products and services that you can built but let's start with a fundamental question at lit our building Journey has followed from the following question what is the most practical and secure way to accelerate towards a decentralized future this question has guided our attention to focus on key material specifically around the recognition that key material can be used as a programming primitive and also managed across a decentralized network and that has led to the solution that we've had in market with the vzer since February of 2024 which is a network for decentralized programmable keys this primitive acts as a Baseline player for a number of web three products everything you see on this slide there's one or more teams building that are venture-backed and building in these categories so now let's talk a little bit about how the system works lip protocol is a multi-party computation threshold secret scheme Network that runs inside of secure encrypted virtualization now let's break that down each node consists of a sealed Hardware environment that's the encrypted VM and it is sealed such that the node operator cannot see any of the material inside of it and inside of that sealed environment there is a key share as well as a JavaScript execution environment now as you can see on the right side of the slide a number of these nodes make up the network and in order to successfully have the network deliver a signature or a decryption 2/3 of the key shares From Within These disparate sealed Hardware environment ments need to authorize any use of the key now naturally this is all happening programmatically because it is in the context and in the confines of the sealed Hardware environment so traditionally the way that signing and decryption has worked within lit is that a user says Hey lit nodes please generate a signature with my key and those nodes send the authorization provided that it passes the checks associated with any logic that's running in the node to that individual who then takes that transaction after combining a threshold of the shares and broadcasts it to a blockchain or uses that signature to decrypt some content now recently and this is the focus of this hackathon we've launched the ability to sign and decrypt within lit which is to say one of the nodes is collecting the authorizations such that you can decrypt information within the sealed Hardware environment or sign and broadcast transactions directly from lit this new functionality opens up a wide variety of application use cases which we will cover right now starting with artificial intelligence you can see there's two products uh that are mentioned here and by no means are is this list exclusive there's certainly many things that you could build with this that are not going to be mentioned today but what we've got mentioned here is community owned AI agents what you can Envision here is an interest group like a subreddit if they are encrypting and storing their data with lit on the open web like on R weave or ipfs then there could be an application that decrypts that data within the lit sealed Hardware environment and does some analysis or some inference or some training across that vast data set and you can almost imagine a subreddit being represented by an avatar that then another user could interface with also there's self- soled labeling similar to this previous setup with Community owned AI agents um the data that is uploaded to the open web can be decrypted in lit and then analyzed or labeled in a way that is working inside a functionally a data clean room whereby nobody is able to see the user's data but is still able to get labels based on the algorithm that is run there now let's talk a little bit about identity on identity there's a few things that can be explored one would be crossplatform social where users can control and aggregate data from all their social platforms including we 2 by having a user's encrypted API key decrypted within lit and then using that API key from within lit to fetch or post data we can also talk about privacy preserving verification which is similar to The self- Sovereign labeling for example a user could upload their driver's license it could be encrypted and stored on ipfs and then if they needed to prove whether or not they were over 21 the driver's license could be encrypted and lit you could run some OCR on it to pull out their birth date and then have the system return a signature that either says true or false this user is over 21 and finally you can use this system for private credentials in this example a user may request a verifiable credential to prove something about themselves but they don't want to reveal that data to the issuer this data could be sent to LIT where the logic determines if the user should receive the credential yes or no again kind of thinking about this in the context of data as a data clean room where you can do compute over private data now let's talk a little bit about decentralized Finance as you can see here now there are a few things to explore one would be trading Bots as a service or on subscription so typically if you're going to develop a trading bot you would license that trading bot software to somebody who would need to set it up on their own backend because the key material really ma matters a lot here but in the context of building this kind of system on lit you could have the key managed and lit and you could even have the strategies that the bot is going to execute uh encrypted and stored on the open web and then decrypted uh and then run across a user's key you could also explore using this tooling to do automated Arbitrage between decentralized and centralized exchanges this again would be another example of using lit to control a web2 API in a privacy preserving way and then we've also got the example of setting up a stoploss order on a DEX here LD action could be used to create a private stop-loss order on a DEX the order details would be decrypted within lit and when the trigger price is hit the assets would be automatically sold let's talk a little bit about gaming One gaming uh project to pursue would be autonomous onchain NPCs where non-player characters like a shopkeeper can potentially use offchain data in an onchain game since all the logic and signing can execute within lit protocol without the game developer having to run a server for that NPC or manage key material for that NPC another thing to explore is on train games that have elements of privacy for example poker in a poker example player hands would be encrypted and stored on chain when a player wants to make a move bet call fold they'd initiate an a lit action some of this logic that would then decrypt all of the players hands within the lit sealed Hardware environment Run the game logic to determine the winner of the hand and then update the outcome and game State back on chain you could also use a lid action to distribute the pot at the end of a hand and then one more idea on gaming would be dynamic nfts uh in this examp example you could use the functionality of signing within an action to dynamically update nft attributes based on some external data perhaps achievement within a game without compromising the security of the nft ownership and now as it relates to ideas we'll just end on a couple thoughts as it relates to generalized web 3 infrastructure uh first things first let's talk about a private Oracle you could use RIT lit to read from a trusted data source in the past we've seen teams connect us to systems like plaid to get a user Fiat information um but it could be for pricing data or anything else and then either write the results of that data to the blockchain or process something about that data in lit and then write a different result or a proof to the blockchain there's a really a lot to explore here as it relates to private personal data we've mentioned this a few times but uh the generalized way to enable onchain control of of apis is definitely a powerful new primitive that can be explored with the notion of decrypting an API key for something like Claude for example within lit and then using smart contracts or other controls um to dictate how and when that API gets called and of course the outputs from those apis could be used as inputs for further orchestration and programs and then finally one more idea to mention is the notion of chain abstraction uh this has been a popular thing that teams are using lit protocol for where by you can have a singular interface and because a user can have child Keys within lit they can use that single interface to write transactions to destination blockchains where the source or the intent is either on a single blockchain or a single app so those are just some ideas um there's a lot to EXP explore here this is a a new primitive in terms of a decentralized programmable key for signing and decryption that also enables compute over private data so we're really excited to see what thoughtful applications and protocols you come up with and you can use these links to find lit protocol on X and the below QR code uh will have links to a blog post that has uh information about the features of sign and decrypting within lit that are the focus for this event thanks so much best of luck building and we can't wait to see what you come up with let us know if you have any questions in Discord or anything else thanks again