Defending On-Chain Privacy With ASPs | Taras Woronjanski - 0xBow.io

on chain problems we have uh this is an excellent work done by Zack xpt uh I think this happened last year the year before uh where he traced the source of funds from North Korean Harmony hack where funds went from tornado cash which is a privacy protocol all the way to rail gun and somehow he has done an excellent work tracing it back to exchanges well there are three problems in this diagram here one the price protocols did not stop any of the source of funds two the PRI of protocols both rail gun and intern cast did not report the flow funds and three both protocols did not provide enough privacy to anonymize the source of funds now these are not the main problems the main problem is that with the current investment being made into privacy Tech and the evergrowing talent pool that we have right now working in the Privacy uh industry I believe that in 46 months time we have this magical marriage between ZK privacy and FH and the problem with that is that in this scenario this becomes a complete Black Box and it's going to make someone EXA xpt lives a lot harder and I don't need to say anymore that you know if Regulators are going to see this they're going to probably crap the PS right and they'll do absolutely anything to stop from this happening so what is oxer's interest in the space well I mean to make it simple we want to defend the future of onchain privacy uh we want to protect the Investments made into privacy technology and we want to protect the life or Lovel hoods of all the contributors of privacy Tech and last but most importantly we want to protect the rights of privacy in web uh web 3.0 well how do we do this well in September 2023 a vitalic and a me both that we are actually working closely with um a me as a project called privacy pool and arim from chainway is working hard to implement that to mainnet uh they both released this paper September 203 talking about how to achieve or how to practice du diligence for privacy system what they've introduced is a novel but a very simple way for privacy protocol to exercise its due diligence and ensure that privacy is only guaranteed to good actors um I want go into too much detail but if you know how torado cash works when you make a deposit into torado Cash pool that creates a utxo when you do a withdrawal that's when privacy is guaranteed you submit a ZK proof uh proof of balance to a relay and the relay then proceeds with the withdrawal well what privacy pool does it extends this a little bit bit further by adding another proof which is what we call a proof of innocence and what this is this is proving that your set of deposits are members of a more restrictive Association set who's providing this Association set well exports that's that's us as the assocition set provider the members of our assocition set are deposits that we have audited through a very lengthy uh reviewing process either by you know third party Wenders or credible or uh um uh I guess experts in that space and then what you do is if you want to produce a uh proof of Innocence you just pull out a assion set get your set of deposits generate a membership proof is assion set and then provide that as a real layer so this is a very high level technical uh view of what essentially happens uh on withdrawal the user generating the uh both the proof of innocence and proof balance through us through as pay and then provides to the reer and that guarantees confidence for the real that they are not facilitating uh any criminal activity uh just to do a little quick demonstration of our asso set so right now this is one of their profitable contract on a test net uh we go over to just a sample transaction this is the essentially dxo we hash that we forward that to our reviewing process and based on the reports that we aggregate we either put that in our inclusion set or exclusion set so inclusion set means that we've traced that source of funds to criminal activity inclusion set means that it's all clean uh if you want to get entire set related at a pool uh you can the web two way of doing things okay that's a little bit blurry isn't it is there a way to make this sharper okay cool um you just simply call our API specify what contract it is uh and that generates pretty much ass solution set that includes everything that's inclusion set if you want to know what's an exclusion set so what we have projected uh there you go those are the uh transactions that have been uh rejected Okay cool so let's say you have a set of Hass of your deposits and you want to create an asso set with your own deposits you can specify it in the hash so those are my deposit hases uh I want this to be a union uh I want this to be a random set weeded of 20 extra transaction so that increases my Anonymous set and to add that even more I want this to pin this to ipfs and put this on chain so if I send it that'll go into our back end we generate the set for you there we go so that's the assocition set with 20 random uh hashes including my deposit hashes and right at the bottom here is the transaction hash when we put that on chain uh currently we live our stion sets are living in the ZK test net so if I go to the transaction and we go to logs uh that's the meal rout of the Set uh that's just a generated U ID of the set and this is the ipfs hash for the generated assu Set uh now here uh containing all the data for you to construct the mer uh Merkle tree and verify everything um and and this includes all the records or all the elements that are part of the solution set including your own deposit as well so then by generating a membership proof of your deposit to this assocition set then you can produce a proof of Innocence um the sets are also living on our chain as well so you can specify with the MTI ID uh all the elements all the hashes related to that set and also identify if a certain element or certain hash exists in a assocition set so hypothetically you can also generate your assocition set on chain um so where to next well there are three key phase uh areas that we're looking into right now so one is sophisticated onchain analysis uh we want to cut down the time uh to decide on a transaction with high level of confidence uh that involves us incorporating kyc to a certain degree plus working also with digal identities right now we're working with polygon ID to achieve that uh we want to work also in predicting intents so understanding the intents of users entering into privacy pools and we're also working with notable names and Wenders in the space to achieve this so let you imagine around while you probably can guess who we're working with uh second key areas we want to focus on data availability and accessibility so we want to make sure that we can generate and verify soltion sets uh and also verify proof of Innocence rather quickly and easily uh I've you seen a lot of our data is on chain but we're also involved ipfs storage as well uh we're looking at also integrating with a P2P pops up and crypto channel so uh we're looking at integrating with waku on that and maybe I mean still up to debate maybe roll out an L zero and L2 as well for it and last uh we're also focusing on trust and transparency so Oxo is right now Paving the way for decentralized asps so we are are looking into creating a generalized framework in which you can establish trust and transparency for asps and by doing that we're tackling the question on how can we verify that an asp is not censoring valid transactions or is not in front for criminal organization so we start off by generating ZK proofs to verify the the decision around rejecting or approving a deposit is based on a set of verifiable audit reports such as from chain analysis or trm and transparent set of criterias so right now we're working with suxin sp1 uh ZK VM SDK for that so I'm going to end my talk with this two statements uh icps are critical in defending onchain privacy and icsp is also critical and protecting the future of decentralization so if you want to work with us or you want us to integrate with you please reach out to us why website or why my Twitter we're also hiring I mean we need incredible Talent as well working in the space please also reach out to us for that thank you any questions no okay cool