No one wants privacy (yet)! by Matthew Wyatt

all right is uh can you guys hear me okay all right so my name is Matt I'm co-founder of nucleo and this is a click bait title to get people somewhat engaged at least to start because I assume at this point everyone does want privacy and this feels a little far-fetched so what do I mean whenever I say no one wants privacy yet first quick background on why I'm talking here uh nucleo is a multi-sig but make it private what does that mean well we started in November of 2021 solve a simple problem actually spun out of a hackathon tried making a joke yesterday saying like you know long time listener first time caller here because it was actually a hackathon from November to February at ethanver that finalized all right we need to do private multi-6 to solve the Constitutional problem um so what does that really mean it means that we found its Turtles all the way down we added a zero knowledge proof circuit onto fundraising protocols like juice box at first and then we realized hey we don't have account balance level privacy that took us to some of the zkp Privacy protocols like Aztec and Elio realizing that okay if we have zkps on fundraising circuits down to account balance level privacy on these privacy protocols then maybe we could do something interesting so we're building with the leaders in zkp privacy space like Elio Aztec and espresso as some of the first grant funded uh groups to help build infrastructure on them over the course of all 2022 we worked with individuals Dows organizations and more and we found a lot of very mixed feelings on privacy this is our first event that we had at the Taoist in Amsterdam looking at privacy versus transparency just having a conversation and we found that a lot of dows actually didn't want privacy so whenever I joke that like no one wants privacy yet there was a lot of really good um points around why Dows in an open transparent nature is really good and why a lot of people really want to be able to see you where every bit of the funds are flowing and a permissionless open Nature um we even got people saying like hey but maybe privacy is more nuanced and it could really help improve our governance so that you don't have people targeting specific High voting power users that could be a good place for privacy uh we got people saying straight up is there demand for this of the Dows here maybe not much then we got people that are like very adamantly for privacy so we built private multi-6 private D5 private fundraising and more over the course of 2022 and we built it for individuals to use for Dallas to use for organizations to use and more what types of things do we build well let me show you through some private fundraises that we did at the end of last year that hopefully we can actually show people that may not have heard of it there was some dramatic events going on at the end of last year so you may have missed it um we did a couple private fundraises if anyone is based in New York and in the crypto scene they're probably familiar with Empire dial and they're probably familiar that Empire dial is no longer in the same building that they were we actually helped try to launch a fundraise for them using a private public fundraise because they had a very clear use case of not wanting their entire Dow treasury public so they could negotiate with their real estate landlord and not be kind of like jacked up of all the money they have in their bank account so a little quick setup on how we had this we had a public donation option or a private donation option and just let users choose we just thought it'd be interesting to see which way users would go if we gave them an option of both and after they donated they were able to either get public nfts through the public contribution or private nfts in which we used and partnered with sismo to try to break links between some connections there yeah so where the private um so public and public contributions went to um a juice box Treasury and you can have that be a nurses safe on the private side it actually went to a private multi-sig on Aztec Network um this is a quick look at what it kind of looks like and the fun thing about this is this is account balance level privacy for multi-sig so that no one could actually know including the Constitution Dow members that actually contributed it's kind of a weird Paradigm to be in a Dao and not know uh where your money went after it contributed you just have a proof that shows that it went to the Dallas multisig but um how can you show your other Dow members well we found that we had to build an audit view so we have Auditors here and if the dial wanted to verify that the money had gone in they could actually use an audit key and see and verify for themselves at the encrypted values inside the multi-sig actually were their donations what else was that audit key used for well in this use case this was actually Constitution dial 2 there was another Sotheby's copy of the Constitution we had been friends with some of the older Constitution now people and it said like hey we have the Privacy Tech right now do you guys want to go for it this was in November and this was probably the worst time that it could have happened FTX had just blown up and we asked Sotheby's hey can you move the auction back this is a terrible time and they promptly told us no so he said all right I guess we'll go for it so we went for it and the Sotheby's actually needed an audit view to confirm that no funds were coming from illicit places because they could not actually track the private donations as well so we also had to give them access to audit view that they could check all the deposits that came in so in total there is about 500k raised across the multiple fundraisers that we did at the end of year with this private public setup and only 15 percent came in private donations so does that mean anyone wants privacy is it only 15 of people that want to like privately contribute to a dow and DOW fundraise what about all the other use cases and let's just look at total L2 volume and see I mean if you look here Aztec connect is two orders of magnitude lower in volume or tvl than some of the optimistic roll-up counterparts so does that mean we'll own nothing and we'll all be happy does that mean we'll just never have any Financial privacy and that everyone will always know our bank accounts and all the assets I don't think so I think there's a couple issues holding us back and this is what I wanted to really harp on with this clickbaity title and then go through the actual lessons that we learned that are still holding back privacy from being adopted uh it's really really really exciting but there's some things that aren't just Tech it's actually regulatory concerns I'm sure everyone here is familiar with tornado cash but just to actually show how that impacted the fundraises um so we had to work with Sotheby's and we had to work with wintermute and we had to work with chain analysis and all three of them were like how the hell does Aztec differ from tornado cash we had to have hours of calls with every single one of those parties none of them had ideas on how to effectively use it how to track any of the addresses and make sure that they weren't blacklisted or like nefarious in their eyes all just to give a dow simple account balance level privacy it was weeks of work it was uh quite ridiculous so their regulatory concerns from all the counterparties involved including even the Dows like all the Dow people signing their names on actual legal documents because this Dow is doing something in the real world we're worried they were like hey are we going to get flagged for being in this protocol because ofac got a bunch of people flagged are we going to get our address blacklisted so that we can't move any of the funds out as the Dow and then we get potential members that are like super pissed that our funds are locked up all of those are valid concerns and things that we have to mitigate and things that we just are going to have to work through and educate which brings us to user education this was probably the most shocking one that I was like holy crap yeah there's everyone in the world markets privacy but it's all different things including vitalik so vitalik has proposed stealth addresses as a mode of potential privacy in our use case we actually had to have conversations with Juicebox as we were designing our co-design with them around why you couldn't use stealth addresses in this use case because Sotheby's had to have an audit view of all the different donations that came in as they did and just as you work with parties like winner mute and need to do some of these confidential like it just doesn't work it is something that a lot of people will advertise as being a privacy solution but privacy is a spectrum so then you have things like tornado cash and people just assume everything with privacy is a mixer and that all your funds are being washed and mixed and no one is educated on the nuances there then you have things like secret Network just broadly saying more privacy and Limitless possibilities but it is a trusted execution environment based privacy layer fundamentally different than a zero knowledge proof based privacy layer different trade-offs and different amount of flexibility on what you can do and performance and just time in the market zkp privacy is new um then you have kind of the leading cryptographers in the field writing white papers around how to build a private Dow on ethereum which again is a different approach that you could potentially do but once you meet the real world with groups like Sotheby's with groups like winner mute with group sexual analysis these proposed Solutions may not work in practice and then it leads to a lot of arguments on different privacy designs last but not least Aztec so question to the crowd I would love for you to try to explain to your nearest neighbor the differences between these five approaches because God I don't think there's many more than five people that could do that even in the Privacy space so additionally there's technical work this is some things that we learned as we were opening up the donations to individuals for the Dow is that if the state wasn't synced on the contribution fundraise then by the time it hit Aztecs rollup it would just kind of get stuck in the roll-up because the proof may not be at the right point in the network whenever you actually created the proof locally and set it up it wasn't synced so it would get stuck and then it was like how do I get my funds back because I got no notification that the proof was invalid the wrong thought it was valid I just didn't know what to do with it so it just kept it on the role provider and how do we troubleshoot that how do we even find that uh we couldn't we just got slammed on customer support in literal Chinese I was sitting on Google translate with a bunch of people trying to figure out all right well what's your issue and then they say all these things and I have to translate and then figure out it's the same thing but that wasn't the only problem mid fundraise we also realized you see there's this loading nucleo this may take a few minutes type of thing we were automatically trying to sync with the entire world state of Aztec and download every single block and that may not have been needed we could have just tried to sync with the latest block so these are adjustments we can make live on the fly but it's only technical work that you learn as you put it into production additionally just on the multi-stick side the user experience around loading state in the same way and kind of seeing what you can optimize there making that Pleasant stopping customer support there because even The Limited number of groups that we let tried out in our little closed beta we're all having these issues so in summary our mission is no sorry a mission isn't to make you own nothing and you'll be happy our mission is to Foster the next generation of opportunity and we think that privacy on blockchains is essential to do that so that you're not always able to see every single person's real world assets you won't own nothing and be happy you can privately own stuff you won't be targeted for it and you'll be able to do things that being said we're starting with thousand orgs right now we're still messing around in privacy world just trying to improve the technical work educate and so we have another fundraise live uh Constitution dial 2 has renamed to Unum Dao if you guys go there you can go to the fundraise website right now and contribute we are over in a booth by the Dow area and we have a lending library if you come and show us that you contributed then you can get a free book there's a lot of fun books there's Central Banking 101 concise history of common law they're very exciting please test it out and see how privacy feels but I'll leave off there's a time left to build private entities private voting private games just even making it usable it's an exciting time to be here it's going to take a bit but we're gonna get there and if you're trying to make privacy multiplayer feel free to scan that reach out if you want to just jam and build stuff jam and see what's up I put my calendly on there and I'll probably regret it but that's all I got [Applause] foreign