Elena Nadolinski I Cross Chain Privacy Pool for EVM Chains I Iron Fish I Pragma San Francisco 2024

[Music] for our next talk I want to bring on Elena to tell you about how we actually Loop in privacy with all these things now that are happening on chain so please give Elena a big round of applause awesome thank you um cool yeah no it's great because my first ento into crypto is actually the 2017 eth water hackathon where crypto kitties actually debuted uh their entrance and so it's really cool to go right after him um cool so I'm going to talk about uh cross-chain privacy pools and how we can introduce that for evm chains so why make a really big deal about privacy anyways and so um embarrassingly I actually thought this this entire conference was at a different location but it's not it's uh it's actually here um and this is actually a great segue for the importance of private money um so private money dur uh during uh uh world I was was actually diamonds diamonds are a pretty great source of of private money they're portable they're small they're universally accepted and they're actually pretty great store of value um they're actually pretty private as well so if I give you a diamond for as a sort like a form of payment then there's no like public Ledger that records that transaction so makes makes it pretty private and it's a pretty great choice to kind of Safeguard your money um when the government is outed to confiscate all your bank accounts um so it was actually indeed used by Jewish people during the 1930s 1940s uh when they were trying to cross borders um so but the lesson here is that privacy actually does matter and so when we think about cryptocurrencies there's actually a lot of similarities between um you know diamonds and cryptocurrencies um both are portable both are gr stores of value uh and both are you know somewhat decentralized um but you know uh right now pretty much all of the top cryptocurrency projects are fully transparent um and so all transactions happen out in the open which kind of leads to pretty dystopian uh World um and I think like we can all agree that the biggest product Market fit of crypto is indeed stable coins um you know I've used usdc usdt way more than I've used pretty much anything else um and again everything that we do in with stable coins is transparent and so if we kind of fast forward this world and we can assume that crypto payments is being used for everything it does lead to kind of a weird dystopian future um I can look at anyone's account um I can track my friends accounts um I can look at anyone's wallet on ether scan um and even if you try to use multiple wallets across multiple chains we still have uh pretty good info companies that can actually aggregate all that information and so we know we know exactly how much crypto Donald Trump has for instance across many many chains um and so crypto is not new to privacy projects um there's actually been tons of attempts at making privacy for crypto work and it still doesn't work um you know uh there's not really a solution for me to use right now now if I wanted to send $20 privately to a friend of mine using crypto um I'm not entirely sure what I would use and I'm not saying that there aren't Solutions there are lots of companies lots of projects that are trying to solve this problem um and they're getting there in in different ways uh but right now it's actually still pretty pretty hard um I would have to kind of uh ask my ask the question of like okay if I want to send used DC privately what protocol do I use on what chain uh what asset do I need to do or what asset do I need to use for that trans action um if I send $20 versus versus $100 versus like one eth worth of money do I get different level of privacy because some protocols actually actually do rely on that um and is a project fully decentralized if I use a project will I get in trouble will I get in trouble using a privacy pool um or will the project disappear because of regulatory concern and so right now there actually isn't really a go-to solution for privacy in general and you know we really hope to change that so that is exactly what iron fish is trying to solve for um we are trying to make a cross chain privacy layer so that all evm chains can have access to a privacy layer for all their assets um so this talk is really about what are the ingredients that we used in particular to get there um and I'll kind of walk them through uh pretty quickly but I want to kind of give you the intuition of why privacy is so hard and why there are so few projects that are actually making this achievable um so the first ingredient is what we call ironfish masp which stands for multi-asset shielder protocol um and the second ingredient is multi wallets which for what it's worth there is currently no privacy chain in production right now that has full private multisig wallets and so even though it sounds like kind of a a small thing for other chains um technically it's actually very hard to achieve for privacy and then the third ingredient is custodian bridges that actually connect iron fish to other evm chains in a way that protects iron fish from Bad actors so we are partnering with the custodian Bridge so that um the bridge actually does monitor all transactions that go into iron fish to make sure that no bad guys actually enter iron fish and if they do their Fones are Frozen um cool so with all of this combined all these ingredients lead to what iron fish is today which is it's currently live we actually have been made that launch since April of last year um so it's a layer one proof proof of work very vanilla uh but it's a it's a full privacy chain um it's fully decentralized we have nodes all around the world and you can run the our Noe app right now and easily connect to the iron Fish Network um and we support wrapped br assets so that you can have uh private wrapped use DC from base or any other evm chain on iron fish in a totally private way um you can kind of think of iron fish as one privacy pool for all assets across multiple chains and the bridge partner that we have does full sanction screening and more so that the bridge protects the Privacy layer itself Okay cool so let's dive in uh on how all this works because iron fish does not have Smart contracts and yet we can achieve all of this um so I want to go over the iron fish multi-asset shielded pool very very quickly to kind of give you the intuition of how it works even though again we don't have any smart contracts at all so the key generation is fairly complex but you can kind of think of ironfish as having really three keys you have your uh secret key which is the same that you know concept you have in ethereum you have your public address which is how you request money but you also have a Vu key and a Vu key lets you give an auditor or somebody else full access to your to your um transactional history um and then even though iron fish is a utxo based system we do support Uh custom assets and the way we do that is you can actually Define an asset on iron fish and it is fairly limited for instance it doesn't have like a full erc20 solidity example but you can still give it a name metadata Creator Etc and we actually use that information to create what's called an acid generator which is a point on elliptic curve which we'll then use to balance the equation so even though the equation is fully encrypted you can't see that the the sender recipient or the amount um or even the AET type we can still balance all all of the out in the end um so if you're familiar with Bitcoin um Iron fish is similar in the sense that it works on a utxo based structure um unlike Bitcoin we do give you more optionality so you can uh again give um give a note an asset effectively um and a bunch of other information to help us make it more useful um and then the way pretty much all privacy projects work is very very similar so the idea is that you have a global Merkel tree of notes um and all the notes are encrypted um so for instance this is a kind of Wikipedia page a very classic example of a of a Merkel tree and this is basically the global data set of all notes ever created for iron fish uh in their encrypted form um and uh an ironfish transaction has basically four functionalities so again even though we don't have Smart contracts we give you functionalities for how you can spend or create new assets so you can spend assets you can create new assets you can mint them and you can burn them um and uh effectively uh the way it works is a spend is always private and an output is always private meaning that I can always uh spend my money and I can give you money in a way that nobody sees um but the mint and burn operations are actually public so that you can see if a bridge operator for instance is acting honestly and not printing more money than it should um so cool so for a spend description all I want you to get out of the slide is that everything is fully encrypted so if for instance on ether scan you can literally see you know exactly what's being created um here on iron fish everything is encrypted um and instead we have a Zer knowledge proofs that verifies that even though the transaction is encrypted that I'm spending this money it's still accurate and so the tldr of what a spend description does on iron fish is it says um there is a note in that Merkel tree that I showed you earlier I am the owner of it and I am revealing a nullifier to you in a way that was constructed honestly such that I cannot such that I'm not able to spend that note again in the future so there's no double spend um an output description is very similar again it's fully encrypted so only the recipient and the sender sees that information um and there is a z launch proof attached to it that basically says that I as the sender have created this output note for the recipient in a way that they can then spend it in the future um the M description is very very similar um except that it does have public information so we can kind of audit the chain and make sure that bridge operators are acting accordingly and not creating more money than they should um and then uh the M description um the zer proof around it just means just just says I'm allowed to print more of this asset and then the burn description doesn't actually need a ISE proof at all because we can anyone can burn an asset if they choose to um and so the important part of this is that every transaction comes with or every uh description I should say comes with a value commitment of how much of an asset we're spending or creating um and this is important because we actually use this to balance the equation so a transaction that can have wrapped USC or iron or pretty much any other transa or any other asset would still balance based on the fact that we use value commitments and um elliptic curves to basically guarantee that even though transaction might have hidden assets everything still balances as it should um cool and now we have uh multi-asset shielder pool so this is kind of an example of even though we don't have Smart contracts we can still actually have multi- ass protocol in a completely private way um for people to create custom assets um um and a transaction does not reveal whether or not a trans whether or not there's any like any custom Assets in it at all um everything's fly encrypted cool so the next ingredient is how do we create multisig wallets um and we implement we um implemented something called Frost EKG and frost is a threshold signature scheme and dkg means that it's decentralized key generation meaning that there's no Central party that is responsible for um helping you create the multisig everything is done in a fully decentralized way um and so the tldr of that is it's the ability to create a fully private wallet without a central dealer and you can create a wallet such that you can require n ofk signers for a transaction to go through out of a wallet and so if you combine all these ingredients together this is actually a demo of test net to testnet um you can literally use um you know a bridge to send an erc20 from an ethereum testet to iron fish and you can have a wrap representation of that asset on iron fish um this is the not app Wallet that kind of shows you that there is indeed a wrap representation of the rc20 coin that originally was on ethereum or on on zolia really um and you're able to have it be on iron fish and then you can also send it back so this is something that is currently being tested out in test net to testnet but we are really hoping to launch this soon um and we're working hard on uh launching iron fish to you know pretty much all the popular evm L1 one and L2 chains so that any asset can have access to uh privacy layer so this is coming soon and if you're interested you can always follow us on Twitter for more info all right thank you so much [Applause] [Music]