Enabling Everyday Payments Privacy with zkBob | ETHDenver 2023

I want to talk about transparency. So, it's one of the killer features of public blockchains. Accessibility, accountability, visibility, so many abilities that come from transparency. Unfortunately, there's one big drawback and that's that we lose our privacy. And financial privacy is important.

It's vital really. how we spend our money, how much money we make, how much money we earn, how much we have. All of those things are our own personal business, right? And in traditional finance, that is expected that we can receive a salary and it's private. We can share it if we want to or we can keep it private.

When we get paid on the blockchain, it's all public information. Here's what a few people have said about privacy. Nam Chomsky, he's a famous American philosopher. It's dangerous when people are willing to give up their privacy. It's really associated with our own freedom, right?

Once we start to give away privacy, we start to give away some of our freedoms. Privacy is a cornerstone of human rights. It allows us to communicate freely and securely without fear of surveillance or retaliation. This is from Gary Weinstein. He is with the Electric Coin Company, a great advocate for for privacy on chain.

Finally, the transparent nature of public ledgers on blockchains stands in stark contrast to the default privacy of the traditional financial system. This is from Burlson Corver and Bonet, their researchers at Stanford. I'm going to talk a little bit more about a paper that they wrote about how we can bring some compliance to private applications. The way we're addressing this issue is with the Bob protocol. So, we've got the underlying asset which is Bob.

It's a stable coin. It's multi-chain, multicolateral, and it includes an optional privacy feature, which is the ZK Bob application. This is a DAP that is used specifically for stable coin privacy. And I'll talk more about these in a in a moment. We also have collateralized debt positions.

I lost my video here. There. Collateralized debt positions are coming soon. So, this will allow people to actually mint their own Bob. Quickly, a little bit about our team and where we come from.

My name is Andrew. I am a technical communicator with the team. We're the original founders of the XDI network. Some of you may be familiar with that chain. Yeah.

Right on. So, uh, if you were at ETH Denver in the past, you might have used the burner wallet. You're able to pay for food trucks and vendors. This was the original kind of side chain that had fast, cheap, stable transactions. There's so many side chains now, it's it's hard to track them all.

But anyone who was at ETH Denver previously, they've used XDI. With that project, we created some of the first interoperability bridges in the space. We also worked on Block Scout, which is the number one open- source explorer right now as a competitor to Etherscan except open source. Last year, we had a merger with Nosis. So the XDI chain is now known as the Nosis chain and our team decided to move on to some things that we're very passionate about including privacy and stable coins.

Bob stablecoin. So what makes it stable? We we use something called concentrated liquidity. Um it says concentrated stability here. So in unis swap v3 this was first introduced and what we're able to do is to provide some USDC as well as some of our Bob stable token and then create a very tight peg.

So basically one tick above and one tick below the dollar and that's what maintains the stability of Bob. In addition we have an inventory distribution model where we're able to mint Bob. We have a small board right now as we're still in beta. We can mint Bob and keep it in inventory and then as people purchase from this inventory, it moves into circulating supply. So every Bob and circulating supply is backed onetoone by USDC.

We're also able to provide minimal fee swaps with very low sli slippage and fees enabled by some of our integrations. quickly. Bob swap is is one way that we do this. It's a headless AMM. We're able to have zero fees and zero slippage with this.

It's deployed on one inch right now. And because the fees are so low, it actually enables some optimized routes. So, for example, people who are trading from USDC to USDT, these will often route through Bob because it's it's the cheapest way to do it. We also have a feature called idle asset compounding. I'll talk about that in a minute.

These are some of the DeFi protocols where Bob is currently uh unis swap B3 is the primary inventory that we have. quick swap and kyber swap both on polygon infrastructure and uh there's also some farming opportunities on quick swap and kyber swap and we are looking forward to more dexes to come. So if you want to get Bob there there are many opportunities to get it in these ways. One of the things we're trying to do is support the protocol ourselves in a self-sustaining manner. So it's not really it's taking ourselves out of the equation really.

The protocol will support itself. We can do this through there's minimal fees to transfer. It's actually 10 cents Bob um per transaction. We can collect those fees. There are DEX trading fees and idle capital compounding.

So, the way that that works, when someone purchases Bob with USDC, we have that USDC in in our swapping protocol in the vault and we're able to loan that to something like AB and then collect the interest from that and that can help support the protocol. When someone wants Bob, it's just a simple contract call to uh I'm sorry, when someone wants USDC, it's a simple contract call to get it back. We also have lost token recovery. With some of our previous projects, we noticed that up to 5% of tokens are actually lost every year. People send them to a dead address, they lose their keys, what have you.

So, we're able to work with these individuals and recover some of those tokens and then also use some of those recovered tokens to help support the protocol. This is what Bob numbers look like currently. In inventory, we've got uh a little over 20 million. The daily trading volume is is healthy at 8 million daily, around 3,000 holders, and over 7 million in collateralized supply. So, you'll see the difference there between inventory and collateralized.

The collateralized is what's backed one to one by USDC. and Bob is available on Ethereum B&B optimism as well as Polygon. As far as future directions with Bob, we're looking to continue building use cases here at the hackathon. We're excited for some of the legitimate use cases that are coming up for privacy with the ultimate goal of really competing with DI. And uh one way that we're working towards that is with the the CDPs.

people would be able to mint Bob using ideally like LP positions from Uniswap. You'll be able to then mint additional Bob with that. So use your own LP positions to help leverage your asset holdings and that's coming soon. The other half of the protocol is ZK Bob. This is the privacy preserving solution.

It is currently on Polygon. We do have options to deploy on different chains. We're exploring some franchise modeling right now. And it uses zero knowledge proofs to obscure the sender, receiver, and amounts sent within the pool. Only sender and receiver have access to that data.

They can, you know, choose to share it if they'd like, but those are the only two parties who have that data. We currently send them through an elected relayer system. We're looking to decentralize this in the future. And all of our contracts have been audited by chain security. This is just a quick peek at the UI.

We have a whole UI team. We're we're working to make Bob simple to use. So, at the end of the presentation, um we'd like to invite all of you to use it as well. And we'll be handing out some Bob for anyone interested. Yeah.

stick around. Got a few integrations. Uh, one with Lei, which so this allows for crosschain swaps. This allows for easy swaps within the protocol itself. So, you can find it very easy to get Bob as you need it.

And this is the big feature that we're introducing at the hackathon, direct deposits. So, previously you had to open a ZK Bob account and then transfer or deposit your Bob through that account. We've created a remote proving system. So now you can directly deposit into ZK Bob just from a smart contract. If a wallet has it integrated, you can have a private wallet.

All these things are now available. So it abstracts away one of the layers of difficulty and we're that's what we're pitching at this hackathon. We've got some exciting usage and we've got some bounties for hackers using direct deposits for privacy. We also have gift card functionality and as I mentioned we have some gift cards here tonight. All you have to do is scan a QR code and it opens up a light version of the application.

From here, you can transfer to another ZK address completely privately. You can open up your own account, which then enables deposits and withdrawals. So, I hope you all get a chance to use it and choose to use it as you wish. You can transfer it to another friend privately or if you decide to withdraw it and ex exchange it for some USDC. Maybe you can use it at the food trucks.

Who knows? This is uh obviously a big topic with privacy, right? Compliance, you know, if anyone here, not to name any names, but if anyone here has ever tried something like tornado, it it was unfortunate, right? Maybe we just wanted a little privacy and we ended up participating in mixing money for, you know, illegal funds. We want to keep that out of ZK Bob.

We want to be able to just use privacy as we want to use it. So this is the paper I was talking about earlier, privacy protecting regulatory solutions using zero knowledge proofs. And they came up with kind of a rubric for how can we have private applications that can still have compliance? And we're we're using some of these same ideas with ZK Bob. So deposit screening, you check suspicious wallets before they have a chance to deposit into the application.

Withdrawal screening, the same way you can check withdrawal addresses and maybe at first the funds were deposited in and then the address was sanctioned and then they can't withdraw. So there's some time gap there. Finally, selective deanonymization. So this is the idea that you have a record of your own private transactions and if you're asked to share those or want to share those, you have that record and you can share them. It's it's your choice.

We also have that where you can download your history in ZK Bob. Some other things we have to prevent bad funds from coming in um are limits. So, no longer can you get 20 million from a bridge hack or 200 million or whatever it is, the next bridge hack that happens and and throw it into, you know, a privacy application. For any new wallets, it's it's a 10K limit per day and it's 100K for every account. So, you can't, you know, create 100 accounts and and throw it all in there.

Now, we do have whitelisting opportunities for known entities. We we have a KYC program that is optional and that can raise your deposit limits. We also have the idea of restrictions as needed for certain geo locations. So for example, right now in the UAE they have a lot going on with private coins and we have blocked users in in that location. And finally with AML that relates back to the withdrawals and deposits and for that we are integrated with TRM labs.

So they check suspicious wallets to ensure that funds coming into ZK Bob are in fact legitimate funds. So what are some use cases for this kind of application? I'm sure you can think of a lot where privacy might come in handy. The biggest one that we're finding right now, the people that are using our application are actually employers who want to pay their employees on chain without it being completely open, right? They when you receive your paycheck, typically you you might want to keep it private.

You can share it if you want, but you again should have that option. So, we have employers who deposit into ZK Bob and then send those funds to their employees privately. the employees can then withdraw. And because it's a stable coin, it makes sense for salary. Also, the idea of vendor purchasing, you maybe don't want your competitors to know who your vendors are and how much you pay for products.

Same thing. Anonymous donations, grants, fundraising, purchasing art, all these things in in the real world are available as private applications. Remittances are also another great thing that can be private and obviously much faster than other ways of sending remittances. Just want to uh give a shout out to a few of our partners and other integrations that we have in the protocol. A couple of note, Melo Protocol.

I'm not sure if many of you are familiar with them. We've been working with them closely. They really work on liquidity management um solutions for protocols and we're we Bob is included in their protocol and we've worked closely with them and this is our current KYC provider and solution that we're working on with Opium KYC. So you can get verified there in a in a ZK kind of way and then you're able to increase your limits for deposits into ZK Bob. So these are our socials and whatnot.

We hope that you have a chance to follow us and to try out privacy. And I think that's about it from here. Thank you very much. Thanks for sticking around. As I mentioned, we have some uh Bob Moyir over here is uh giving out gift cards if anyone would like to try it.

It's a QR code that you just scan with your phone. You can just take the token, scan it when you'd like, and uh it will it will give you some Bob. I think there's 10 Bob on there to to give a try. And if there's any questions, I'm we have a couple minutes I'm happy to answer. Our booth is also located right there.

So, we'd love for you to uh come by and visit tomorrow. No. Well, [Music]