Incognito Mode for Ethereum | Andriy Bugayevskyy - Aaron Ahmadi

uh we're just now beginning a totally new uh section here at east denver today i'm david waxman i'm your mc for the next few hours and i'm thrilled to introduce uh some really exciting uh shows for the audience here which has grown over these last few days i'm really excited first up we've got aaron ahmadi from incognito chain aaron is a head of comms and he's got lots to tell us about how incognito is paving the way for the future erin i'll let you take it from here thank you so much david can you guys hear me all right well i guess you can't respond yeah we can hear you oh great okay by the way i love that chair that was a beautiful chair um okay so like you said i handle communication at incognito and to put it simply incognito is privacy uh for all of ethereum and so uh just imagine entering incognito mode for all of your interactions with the ethereum blockchain and beyond um so chucky is here he's sharing chucky is the communication i mean excuse me the community uh lead at incognito and he's the one sharing the presentation so i'm gonna frequently refer to him for changing slides chucky would you mind full screening and then going to the second slide for me okay thank you all right so essentially incognito noticed something right uh we noticed what the rest of the world noticed which is cryptocurrency uh everyone is watching crypto including traditional finance right so paypal these are old headlines even more has happened since then uh but paypal has started to allow bitcoin and crypto spending um you know d5 markets exploded last year chase bank jpmorgan chase uh talked about the importance of bitcoin and how it's going to compete with gold um and even this year we have things like elon musk right tesla jumping into to bitcoin with a 1.5 billion dollar investment um so there are a lot of eyes on crypto right now and would you mind jumping to the next slide chucky sorry about this guys i don't have a screen share button uh on my browser for some reason chucky would you go to the third third slide thanks so uh the thing about everybody watching crypto is that with more eyes comes more surveillance right so if the entire world is watching that means regulators are watching uh thieves are watching and so you have uh surveillance in places like china and the us where government is getting serious right like this headline says about tracking crypto there was a decrypt article uh talking about using the ethereum name service to track over 133 000 ethereum names and like the addresses associated with people using ethereum i myself on twitter the other day saw a few people i follow have their addresses now these were bitcoin addresses like pomp uh publicly released and so it's a problem that's growing the more attention that crypto and defy get the worse it becomes to participate in them at least the least the less safe it becomes right so what incognito does is we created at its core level a transactional privacy to solve that problem right so would you go to the fourth slide checking excuse me right so at its most basic level this is what incognito does you know somebody wants to send let's say 1.5 ethereum to their friend bob right now all of that is public on the ethereum blockchain you can see it right it might not have their name attached but with the metadata that's available and with some chain analysis right it's it's not that difficult to figure out so you have a completely public transaction everybody knows what you're spending uh your crypto on who you're interacting with but with an incognito transaction all you know is that someone sent some amount of some asset somewhere right so it becomes a completely black box and off of that layer that initial transactional privacy we were able to build privacy for essentially every facet of ethereum and d5 so go ahead and click to the next slide before that thank you right so this is what it would look like or what it does look like excuse me if if you are a a bearded man with glasses uh then you're going to enter the incognito side chain uh with your five ethereum let's say and then you become a black and white bearded man with glasses you transact on the incognito side chain everything in that gray box labeled one two three essentially just becomes blacked out nobody can know what's happening in there except you all of the records are stored locally on your device with your accessible with your private keys um which you hold nobody else holds and then once you exit you know suddenly you which you appear later on down the incu down the ethereum blockchain with a different amount of say ether right if you never left the incognito side chain then essentially you just disappear from the from the ethereum blockchain so what incognito does is it acts as a layer two solution to privacy you don't have to give up your ethereum or stop using any of the platforms you like you just add it to what you already have and then you don't have to worry about privacy you don't have to worry about um you know i don't know how uh regulators are going to make up their mind in the future in the u.s but people in other countries don't have to worry about you know oppressive governments but privacy is not just about escaping authoritarian regimes right in the everyday privacy becomes important for anyone in finance right if you're a trader whether you're a firm or you go solo you have you don't want everybody knowing you know what assets you hold how much and how often you trade you probably have proprietary trading strategies but even down to the individual level you know your bank account is private and what your amounts in your bank account what you spend on only you and your bank know that but with ethereum defy it becomes a lot more transparent on the blockchain and because it's not centralized there's no bank to shield you from anyone else looking in now a bank is its own problem so incognito took you know that that kind of core decentralization promise of of blockchain and the security and privacy of a centralized banking system and put all the power back in your hands to give you that privacy so that you don't have to you know whether you're spending it on baby formula or condoms nobody knows except you and then with things like tax compliance all of that is still accessible because you have access to your records but no one else does so ultimately what incognito is doing is not just solving privacy and giving you security and safety because banks already do that but they're giving you control over that it's not you know a mixer for ethereum where you don't have any control over your privacy it's just shaking everything up for you with incognito it's kind of opt-in opt-out but it's privacy across the board with records and everything so would you mind going to the next slide chucky so this is how we achieve it um a short overview of course of our privacy stack basically incognito is is taking the best parts of monero and applying it to all of the infinite possibilities of ethereum 2.0 so we take you know ring signatures which is something that monero does and we use that to shield the sending address we take stealth addresses which is a strategy we use to shield the receiving address so now you don't know either person on both sides of the transaction we use a strategy called confidential transactions to shield the transaction amounts so you don't know how much is being sent and that gets broken off into you know homomorphic commitments and zero knowledge range range proofs which essentially means that any currency whether it's ethereum or any erc20 token you want to use with incognito becomes like a zk coin right so incognito's privacy stack basically takes the monero level privacy and applies that to your sending you're receiving your trading right so you can buy and sell crypto privately you're investing in anything you do with defy borrowing lending right so that's our privacy but next slide chucky please even if we have the tag we have to be able to support the users right so it's important to be scalable now for scalability incognito is a is a proof-of-stake blockchain it's a sharded proof-of-stake blockchain and we're developing something right now called dynamic sharding which enables the blockchain to essentially expand and contract uh based on usership right so so the shards increase to support the amount of users we have it's kind of like a set of lungs right breathing and expanding in and contracting back um so so sharding is how we achieve currently 100 transactions per second throughput um but that's able to expand further in the future right and then practical byzantine fault tolerance that's that pbft and bls signatures that is what allows the chain to be resilient um to support uh growing right now we have uh i believe 2600 validators on the network uh staking but in the future the chain can support i believe up to sixteen thousand 500 roughly validating at any time to support transactions so it's it's incredibly malleable and can grow very wide as far as throughput um and then the other thing we we that makes incognito a little bit different from other proof-of-stake blockchains is that we rely on a large network of validators with a small amount of equal influence there's a set staking amount that everybody has equal say over the network right rather than having a large powerful excuse me a small group of large powerful validators we rely on a large group of small validators okay go ahead and jump on i apologize for talking very quickly guys i want to respect your time and also you know leave some space for the latency uh with the uh screen share okay so for ethereum based assets alone incognito has uh since its launch about a year ago seen 35 and a half million dollars worth of eth and erc20 tokens so shielding obviously is is kind of like wrapping your assets right um you're you're turning your ethereum or erc20 tokens anonymous basically uh go ahead and jump to the next slide so he's got a little disfigured uh i sent a keynote presentation that was my bad uh incognito basically the way it accomplishes this privacy with ethereum is by relying on uh some core cross-chain instructions right we build bridges between incognito and ethereum we have a decentralized trustless bridge between incognito and theorem we call it portal and that bridge relies on five instructions there's shield unshield deploy undeploy and execute and essentially what that means is you have a shielding instruction to send currency from ethereum to incognito unshield sends it the reverse direction deploy initiates an action undeploy obviously does the opposite and then execute executes on a smart contract right so a bridge then the next term uh it's what we've built to connect the two right it's our form of interoperability it's a two-way trustless bridge between incognito and ethereum that consists of multiple re-layers right there these agents that forward instructions these five shield unshield etc instructions between the two blockchains so that's our bridge the broker then is is is one of those uh relays right it's a smart contract on ethereum that receives instructions from incognito verifies them and then redirects them to the suitable dapps on ethereum now think about that for a second so it takes the broker takes these instructions from the incognito blockchain and then forwards them to the corresponding dap that means that you can have privacy for any smart contract or any decentralized application built on ethereum so one instance of this you'll see later we've already integrated for example uniswap right and all you know 3.

5 trillion or billion or however much liquidity they have excuse me um that all of that can be accessed completely anonymously um you can trade with uniswap privately um okay so yeah next slide please talking great so this is a this is kind of a visual example of shielding uh your ethereum so let's say you take uh one eth right that will be uh that will go through the smart contract broker right and it will give instruction uh shield instruction to the bridge on that bridge the relayers will then forward that shield instruction to the incognito blockchain incognito blockchain will mint a privacy ethereum coin it will hold in the smart contract your original ethereum coin until you decide to unshield and it will always release one ethereum for one p ethereum privacy ethereum so your your rate of exchange for privacy coins and and standard coins is always one to one and those are held in a decentralized trustless fashion by smart contracts uh go ahead and hit the next slide perfect the same thing in the opposite form if you want to unshield when you're done with privacy you want to go back to the ethereum blockchain the incognito chain will burn the privacy token send the unshield instruction to the bridge and the bridge will then send the unshield instruction to the broker the broker will release your ethereum back to whatever address you've input for your sending so all it is is a send and receive transaction but this is the way that the tech works behind it so you don't even have to unshield to the same address you sent from the broker will release the ethereum whatever amount doesn't even have to be the same amount whatever amount of privacy ethereum you've burned that amount of regular ethereum will be released to any address you choose on the ethereum blockchain right so it transfers it it can be erc20 tokens or ethereum itself next slide please perfect now if you are using a decentralized application on incognito we call those privacy apps p apps right but it's the same process instead of shield and unshield this is going to be deploy on deploy so the privacy app on incognito will issue a deploy instruction across the bridge that will go to the smart contract and the smart contract executes on the ethereum blockchain which essentially means you can interact directly with the ethereum blockchain from the incognito blockchain without ever touching it so you can remain completely anonymous while you trade with uniswap while you trade with kyber while you use any of these daps that you like okay let's go to the next slide we're running out of time here so i'm just going to say it's essentially the same process for the rest of these um and if you want more information i can show you where to find that at the end uh let's skip this slide please checking and again okay so like i said yeah uniswap and kyber have already been integrated i mean there are actually quite a few others that have as well but the point here is just to show that anything built on ethereum can be integrated with incognito's privacy or i should say incognito's privacy can be integrated with anything on ethereum so as you go forward in the rest of this conference and you learn about new projects new products or you think about things you want to build yourself all of that is applicable when it comes to privacy so you don't have to sacrifice privacy just because uh there's some cool tech on ethereum you want to use those two things can always go together you can always uh here actually go ahead and skip forward past kyber uh one more one more and another okay well let's stop here for a second yeah trading volume so incognito uh has an app uh but it's not our only product of course but in that app you have a privacy dex a decentralized exchange with with which you can uh trade anonymously we have uh an investment feature where you can add liquidity we'll be creating some lending features in the in the near future um and up until now since its launch in ethereum and erc20 tokens alone uh the pdx has has experienced about 60 million worth of trading volume go ahead chucky all right oh sorry aaron i'll let you uh i'll finish it up real quick in 30 seconds um i apologize for running over the time so to sum up essentially incognito is privacy for everything on ethereum it's programmable privacy so if you want to build something you have smart contracts you're building a decentralized application think about applying privacy to that um and if you want more information you can find more at our active forum we.incognito.org there's thousands of users there and resources as well that will support you awesome thanks guys that was fantastic we learned a lot about how to go and make regular use of the ethereum network a lot more private today