Firo | The Path to Uncensorable Liquidity for Privacy Coins - Reuben Yap | Common S3nse - 2026

[music] Good morning everyone. A resounding crowd but kind of expected but uh hi everyone. I am Ruben the co-founder and project steward of FIRO. We are a small little privacy coin that has been going around since 2016. And so we have a lot of experience [clears throat] especially uh you know on D-listings and stuff like that and you know we can we spend a lot of time and you know privacy projects has spent a lot of time trying to you know build the tech so that people can transact without exposing their financial lives.

But you know our experience is that you know just keeping a private chain running and all the cryptography is only one part of the job right. So people also need a way to acquire the coin, swap the coin, exchange the coin, spend it. And this is why it's, you know, liquidity is probably just as important as privacy when it comes to a privacy coin. And this is the story of what happened to us, you know, and when especially when those connections start disappearing and how we're actually trying to build them and also kind of like the trajectory of where privacy coins are going when solving this liquidity issue. So you know, FO was on like, you know, some of the largest exchanges we are were on Binance, HDX, we were seeing really good volumes.

Um but [clears throat] in I think it was started actually this whole process started in 2023 especially when uh there was kind of like a witch hunt on crypto uh and Binance was under pressure from the US government and as well as the European Micer regulations uh that while did not explicitly ban privacy coins made it like you had to reach a higher bar with the the exact terminology was that you can't actually list an asset that has inbuilt privacy, inbuilt anonymization features unless the exchange or the VAPS in this case can identify the user and their transaction history. Right? So because of that, Binance actually reached out to almost all the privacy coins on Binance which include Monero, you know, Zcash, US, uh, Pivax and and a bunch of others. and basically asked us uh are you going to be removing your privacy? Right?

Because that's one way to comply. And when I got this message, they were like, "Oh, are you going to remove your privacy?" I was like, "Not really. Why should we do that?" And they're like, "Noted."

I was like, "Oh, that's not a good sign, right?" So, I I'm I'm a I was a lawyer for, you know, 10 years prior to going full-time into this. And I was like, "Wait a minute. Let me try and talk to them." And to Binance's credit, they were actually quite receptive.

I had um I was talking to their you know legal and regulatory team and compliance team and I said let's try to work something out. What are the actual requirements that you need? And we actually introduced exchange addresses which basically prevented um an exchange from directly receiving freshly unshielded funds. it has to go through a intermediary transparent address and it kind of solved a bunch of things that Michael had to solve. And while [clears throat] we deployed this, it was working was actually Binance that actually told like Zcash and a bunch of other privacy coins, hey, you know, you should use what FOH uh basically, you know, has developed.

That's the right approach that we will accept. Uh Zcash was also talking about oh let's use um what do you call view keys which would have been a really horrible thing mainly because of the tooling and basically if you're giving your view key to the exchange you're giving a lot more like your your basically your wallet history right but at the end of the day didn't quite matter uh in 2025 Binance still delisted us um they actually had a a bit of like a theater they had actually had a D-listing what what do you call it a vote to Dellist competition where people with BNB could uh choose which coins they should be delisted right and they had a little disclaimer that oh you know this this vote is not binding and whatever and actually fo didn't receive that many votes we were actually in the bottom three quarters and at the top of it was actually like FTT Zcash was also at quite high and um But that being said, we still got delisted. HDX was well, you know, HTX is HDX, but HTX is a another cattle of fish. They actually had delisted us, I think, twice before this date. They had quietly delisted us and quietly relisted us, but told us do not tell people that we relisted you.

I'm like, what? You know, which is kind of crazy, right? Uh but eventually they did they list us and today we actually list it on gate.io as well but um you can't find it. You if you type fo in gate you will not find it and you have to actually put in the URL the exact URL then you go to the page.

We were told again this is for compliance reasons. I have no idea. It doesn't as a lawyer this doesn't really make sense. So you know the lesson is that technical compatibility and you know and commercial access are quite separate dependencies. You can do the integration work, you can try to comply, but at the end of the day, it's a business decision for these exchanges, right?

So, yeah, we could not make a company to keep a market. And I think it's really important to realize that a D-listing especially on a large exchange has kind of a lot of knock-on effects. Um a lot of people say oh yeah you know we lose volume we lose accessibility but a lot of these uh you know supplementary services that power the ecosystem like swaps loans you know travel payment gateways all these other things rely on centralized exchange backends. So when you get delisted, you actually lose all of these, right? We were, you know, people were using Pharaoh to get like stable coin loans.

We had in a lot of swap providers. We could, you know, use Trevor and all this kind of went away in the next like two, three months after the delisting from Binance, right? So the idea is that this is not ideal, right? se centralized exchange listings can seem to be like a quick stop gap but especially if you take a look at the current environment I mean you saw what happened to BitMart you saw what happened to Ascendex uh it's really not something that a privacy coin should be pursuing and some may say well look at Zcash it has remained listed right Monero has suffered from some delistings but you know they have still kind of have a bunch of centralized exchange listings but just want wanted to let you know that a D-listing itself has like, you know, very far ramifications, especially the larger ones. So, obviously, we're adapting, right?

Um, you know, first of all, we do still have some centralized exchange listings, right? And the community is kind of rallying around and building tools to access that liquidity through like little apps that they're building. Uh, you can go there and swap. There's even a front end to atomic swap dexes. But on the back end, you know, we do have basic swap that which is atomic exchange, atomic uh swap exchange.

There's Rosenfuro which I guess we'll talk about later. And we'll in talks with to chain that seem very positive and Sarai I think is probably which we'll talk about later is the most promising I would say um decentralized automated market maker crosschain stuff. So that is in development. Sarah has not been launched. is probably we'll start with Monero support but we're in touch with the developer he seems to be open but today we're actually going to be talking about you know not just about FOH we're going to talk about right how does this affect other privacy coins right because it's easy to say oh yeah FOH is a small coin you know Monero Zcash would be fine right so yeah of course bigger markets bigger deeper markets absolutely help exchanges of Of course, look at the your turnover volume as one of the big metrics that they consider, but we need to ask ourselves like, okay, you know, if the centralized exchange listings disappear, which roots actually still work, right?

And you have to think about it like people might say, oh yeah, look, some privacy coins have survived Micah. That's not quite true. Actually uh in 2027 new EU anti-money laundering regulations come into play and unlike the previous micer well not the current mic regulations we still say all right as long as you can identify your user and transaction history that's okay. This almost plays almost an explicit ban on privacy coins, right? It actually says, "We don't care whether it's mandatory or optional.

We're just going to delist you." And they may say, "Oh, well, that's fine. You know, we only lose Europe." But many many exchanges actually rely on European liquidity. If you take a look at the recent shutdowns like a Sandex, BitMart, a lot a big part of it was from the Micro Dlisting.

Now just imagine a whole segment of the world now gets cut off from privacy coins. That's going to have knock-on effects maybe. Yes. You know can the US centralized exchange still like take out all this? Not not really.

Right. So you know although we may seem that oh yeah privacy is great right now you know next year is going to be really tough uh for especially maintaining the centralized exchange listings. So let's talk about some of the alternatives right and you know Neo intense has become very popular uh especially as Zcash uh implemented it and they're doing like quite decent volume if I'm not mistaken it's like 8 to 10 million or or so every day on average and uh it's quite smart in the sense that it's almost kind of like a OTC desk you post your intent that I want to swap from this to this and professional market makers basically come in and fulfill these uh requests and this is like you know done through through the near intents but you have to realize that oh yeah this isn't a replacement to centralized exchanges because professional market makers still need a source to get liquidity to get quotes and a lot of them will be drawing on centralized exchange changes. So let's say if you lose your centralized exchange listings will the professional market makers still be providing this kind of service to service near intense and on top of that like unlike the EVM chains which near intense uses quite decentralized thing called a rainbow bridge uh UTXO's chains like Zcash and Dash use something called a proof of authority bridge and that's actually run by some the same developer and operator. So it's like a single entity running that bridge.

If there's any sort of regulatory pressure, this whole thing collapses, right? So not just a market maker issue. That is a real problem there that is really hard. So I'm not saying that new intense is bad, but just realize that it is not a perfect replacement for centralized exchanges, right? It's really useful.

The other thing is to chain and Maya, right? I'm big fans of what to chain and Maya is doing. It gives like a very good UX to swap crosschain. But you know as you know to chain and and Maya [clears throat] are very complex systems. They have a lot of surface area and they've been hacked I don't know how many times now right and on top of that even if we accept yes you know um they are active attack surfaces there are ways that you know the LP withdrawals can be suspended.

We always talk about chain and Maya not being custodial. Yes, that's technically correct. But what if the the the protocol can says you can't withdraw, then what's the what's the meaning of that self-custody, right? If if they can someone can prevent you from withdrawing your stuff. Obviously with tall chain uh they remove they had like a thing that had sort of like admin powers that was removed in February but uh right now they still if to do emergency halts you just need three three node operators to say let's do an emergency hot and unless they are competing votes to say don't halt then the hot happens and that's not a lot three plus you know nodes right so that's an active risk Maya's in a worse position where there's actually admin access where any of these allow listed addresses can just halt the network and prevent uh vaults.

And I'm not I'm not saying that this is wrong, you know, especially given the amount of hacks and AI assisted, you know, stuff that has been happening. It is arguably responsible to have this type of things. But at the same time you know uh it is very you have to realize that yeah you know providing liquidity in tall chain or Maya where it can get hacked and has been hacked before is a risk. So if we go and say let's provide like 10% of our our our supply and and put it on to chain or whatn not right it is a huge risk that that these things will be uh hacked on top of that you know I do think that we haven't actually seen how a witch hunt on these type of systems happen you just need a few more news I mean yes to chain has like you know uh laundered uh you know North Korean funds and and all these other type of things if there's enough pressure I'm not so sure whether or as decentralized as you say it is can will the operators or the the people running the nodes will be comfortable with that trap if there's sufficient legal pressure again it's a very good system but we have to realize it limitations as well now another thing that's been [clears throat] kind of taking up I believe is um rat coins right and what are rat wrap coins basically instead of using the native coin like in torch chain and Maya you basically wrap the coin in some sort of like ERC20 or equivalent type of token and you trade it like any sort of token as part of their ecosystem right so um the really famous one I would say is Wagyu XMR1 on hyperlquid there is Zcash I think it's a Zunit or something like that and there's something that we we have been doing called RSO which is powered using the Rosen Bridge, right? [clears throat] But these all have very different thread levels.

Like for example, if you take a look at Rat Bitcoin, right? That's just a just just a centralized custodian, right? There's one custodian that that kind of does that. With uh XMR Wagyu, there's this guy perpetual cow that basically holds a bunch of Monero that's not a super decentralized option. And then he was like, "Oh, the path to decentralization is adding a little bit more signers to the vault known people in Monero, but I'm still going to retain like a huge proportion of the keys."

That to me is uh existential risks, you know, especially the given amount of Monero that is in these Wagyu stuff. And I don't think that's like decentralized enough. It's really asking for trouble. Z quite more um I think there's like three guardians. I think it's hyperlquid, Zcash and one other operator a really relatively small set a little bit better.

While with [clears throat] Rosen Pharaoh there is a kind of like a federation of around like 10 different uh supposedly independent I I cannot verify that but what's interesting about the Rosen uh architecture is that not just the the people that are holding the funds do not actually watch the events. They they not only independently watch the events. there's a separate network of what we call watchers that anyone can be or come a watcher with sufficient um you know coins in in Rosen and what these watchers do is that they actually watch the network for events for swap events and only if the watchers have a quorum then they pass that messaging to the vaults. So in that sense it's kind of like two layer it's a little bit more secure and it's I would say arguably better than the other two options that they are there. So yeah, this is what we talked about.

Now I would say probably the best although you know everyone's oh atomic swaps they've been around for god knows how long and and you know it will never take off but they are probably like the most censorship resistant way to do liquidity and that is because well first of all it's truly self-custody right and one of the reasons why atomic swaps have kind of failed is because it's a really bad user experience Many existing ones require you to sync the node like the full node for this. You also need to remain online for the entire swap which can be you know half an hour or so. And as a result you know atomic swaps will have been like oh yeah that's cool we can do it but it's not a lot of liquidity. Like for example basic swap I think only has 244,000 liquidity across its entire uh stretch. And we although we have atomic swap kind of um uh integrations we have seen very very little use of it except in very specific instances and one of the problems with atomic swaps is not just because of the bad UX.

It's also hard for community to provide liquidity to this atomic swap kind of solutions because like with an automated market maker with something like unis swap as a community member you know if I have a wrap token like RSPro I just go to unis swap create a LP pool and I leave it there and I forget about it. Obviously it's better to manage it but you can forget about it. You don't have to keep your computer running or what. But with atomic swaps you do need to keep a market maker bot up and running. you need to keep the funds kind of exposed and that's a lot of work for let's say a community member.

Some wallets have tried to address that like bison wallet. They have inbuilt the market making function there. So anyone can just say oh I want to provide liquidity in this areas and press start and the whole market maker bots starts running. We'll have to see whether that really takes off. But uh it is really interesting because you know all these uh doesn't have like a centralized server basic swap you know it's just like messaging all these different things.

And the great thing is that there are some providers that are beginning to integrate these liquidity pools into their centralized front ends allowing a lot more people to actually use these things because even if it's a centralized front end uh you will actually have more people using it and more people are willing to provide liquidity. This one I'll probably like you know just talk a little bit about it because Retto swap is always talked about uh when you're talking about Monero but you know obviously as as beautiful as it sounds the arbitration is still controlled by one entity. So that kind of means like when two or three multisig when you're dealing a retto swap when you're dealing like a swap with fiat basically one key is always being held by the people running swap. So and they have had actually a a hack recently as well. This is really good as a kind of like a backup especially when you're dealing with fiat money but yeah it's again not not ideal.

So I would like to just quickly talk about Sarai. So Sarai is something being developed by Luke Parker Kayaba nerve and he wants to build basically kind of like a tall chain for Monero. And the beautiful thing about it is that unlike the other kind of solutions where the the vaults are kind of like known entities, they have what we call open validator set. So basically anyone with you know what a sarai token or whatn not can join this validator set and become like one of these vaults right obviously with these type of solutions first of all yeah there's no privacy in this type solution you need to you know everything needs to be transparent but on top of that this whole system is very very complex and uh you know sarai was meant to have launched this year or last year but that date has constantly been pushed back and we've seen a lot of like audit findings. Um again it's a very complex system but to me if this actually works this is really really positive because it gives that exp that experience of paw chain with better open validator sets and again you know we are hoping to get integrated once they are stable but that is a big question mark at now but I do I do you know recommend people take a look at Sarai.

So the idea is that yes you know there is no perfect solution right and the idea is that we need to build like a liquidity hydra right so and it's not just about oh let's put liquidity in all these different places we need to have places where there is deep liquidity you know where within the 2% bands and you have to make sure that these have like as you say different dependencies like a regulator risk versus a vault risk versus a custody risk you want to make sure that your options have different different risks point so that there's no single failure position and obviously you always have to have some sort of fallbacks. I would say like atomic swap are great fallbacks but they are still not ready today to let's say if you lost your centralized exchange listings today that's not going to take it up at this point in time but the idea is that you know we have to have we compete for capital are you going to put it in tall chain are you going to put it in a rap ph so you have to kind of think about this but the idea is that for the moment you want to have concentrate in a few like three or four maybe good options and make sure that you are hedging your risk risk uh especially as a project. So in the end I think the end goal is that you know every D-listing should be survivable. You know of course with FO we exper you know experienced this the work is still underway and the idea is that a lot of these options are out there but they're not they're not so native. They should be integrated into your wallets.

it should be integrated into your experience into your ecosystem not just as a side service right and that's going to give you a much better chance that these alternative options are going to be used because they are going to be convenient you don't have to go to the centralized exchange and all of that and I would say that you know for [clears throat] the wider privacy count community you say you you want to judge progress more than just a new venue or yesterday's volume right can a normal per person get a quote, can the trade finish, who can stop it and what else stops it at the same time, right? So, privacy technology protects the transaction and our next responsibility is to make sure that we keep access to that technology useful when the convenient roots disappear. So, yeah, thank you very much and if any questions uh let me know. Thank you, Reuben. I think it's very important that we also know how um we have to move on with liquidity pools and providing liquidity especially for private uh coins.

And also a point that I would like to touch on is of course next year um there are going to be harder um breakdowns on privacy coins especially in the EU um because for example UAE as well.

Okay. Now that's also very interesting I would say. So thank you for that. And