TEE as a Primitive for RWA & DeFi on Ethereum

Transcript

Test. Test. So, hello everyone. Uh today we're going to talk about like privacy uh in DeFi on RWA. Um I'm in Cannes since a few weeks and everyone talk about privacy on DeFi and mainly through RWA, vault, and so on. So, we will deep we will deep dive on it uh today. I'm Tom. Uh I co-founded Ataxia in 3 years. I'm dealing all partnerships, collaborations, uh dealing integration, and so on. Um we've been uh in the privacy space since 2017. Uh we since this time work

uh in TEE. We built an entire protocol based on that stack. And uh I mean, the goal of today is to present our new protocols that we just launched on Monday focused on DeFi on RWA. So, let's start about um a small screenshot uh of the RWA market. Um now on chain, you have a multitude of uh assets. Uh but we can see with uh this graphic that mostly um this is mostly through assets uh on chain uh which is like the US Treasury debt, which is T-bills. The second one is commodities and the third one is asset-backed credit, which is like receivables, invoice, private

credit, and so on. So, today we have more than 26 billions on chain. Um we can think that it's a lot, but let's compare to TradFi now. Um here is like a comparison table about TradFi market cap and like um like I mean, RWA on chain market cap. Um we can see that um today we have more than 360 trillions uh in TradFi and only I mean, only uh 26 billions in uh like I mean, on chain. So, we can see only uh as well that uh we mostly have credit market on chain, which is represent more than 0.02% of the total market cap. Uh And uh at in total, we have like uh

0.007% uh of the total market cap in TradFi, which is tokenized on chain. I mean, it's quite small. And uh the goal of today in my presentation is to have like how we can like grow this uh number, but also how we can support the institutional, the RWA issuer, the asset issuer to come on chain in a fully compliance, but also in a fully confidential way. So, here is deep dive uh on like the topic, but also the problems. What how we can like improve the like I mean, the tech on the blockchain, but also how we can improve compliance and confidentiality on chain.

So, what's actually blocking institutional adoptions today? At the beginning, at the very beginning I mean, uh blockchain were built to be open, uh but we do think at Ataxia that institutional um like RWA issuer, family offices, asset manager need the opposite. Um transparency, we do think that transparency kills strategy cuz every like on chain positions, allocation size, LP management, and so on are visibly are visible publicly in real time on like blockchain today.

It kills strategy. It kills yield. It kills like um like I mean, yeah yeah, yield strategy. So, we um we thought that only 0.007% are on chain and uh we do believe as well that the blocker isn't tech, it's transparency. But to answer these questions, we don't think like the answer is like a private chain. Um for us, it's mostly creating and having a private layer on top of each EVM or non-EVM chain, on top of each public infrastructure.

So, we built that and cuz we do believe that private blockchain have the same problem like uh as at the beginning cuz we have isolated liquidity. We have no inter access. The most of the private blockchain have like a I mean, some uh gate to enter in into the private blockchain and they built on top of improving infrastructure. So, we do believe that creating a private layer on each EVM chain are the solutions to resolve this problematic. So, we built a private layer on top of EVM, uh which is like we allow institutional, but also retails to come and to have confidentiality on top of, which allow us to see um as well like I mean, institutional to work in a battle

test infrastructure, which is EVM. EVM is everything like I think more than 10 years. So, we do believe in that like philosophy, creating a private layer on top of each public infrastructure. So, our mantra mainly is do not move the liquidity. Add the privacy where it's already live. So, like mainly what we fix, creating a confidential TEE layer on top of each public blockchain on each public infrastructure. So, let deep dive on like the real topic of uh this presentation, which is uh how TEE can improve and can become like a primitive for DeFi on RWA.

So, um TEE stands for like trusted execution environment. Uh and this headline say it all. I mean, compute you can trust, data no one can see. Uh essentially um TEE is a black box for smart contract executions. As an input, you will have your balance, your amount, your LP positions, your like I mean, your position in the general way in DeFi on RWA. It will put in the inside in enclave, which is like a enclave um with uh enclave TDX, sorry. Um inside this enclave TDX, the smart contract will run and the logic run inside the hardware enclave. So, no one uh no external party will have access to it. No external party, even like Ataxia, the node providers, the third-party can

alter it or read it at the end. As an output, you will have the unencrypted result. Only the authorized recipients can decrypt the output and only the output, which is like the result of the smart contract computations, will be publicly on chain. No [snorts] like the input and the like the computation inside the the enclave uh of uh like Intel TDX. So, here is like how TEE brings confidentiality to EVM uh with like an example of uh like our new protocol, which is Knox. You can uh search in uh in Twitter like on Google as well. We just launched uh the testnet on Monday at Ataxia here.

And here is like the workflow and how it work. It's all beginning with a user who interact with the dapp. And I mean, before the dapp uh already integrated the Knox protocol. So, the user will will integrate it, sorry, with like an under gateway, which is essentially like an encryption-decryption bridge between the public layer on like the confidentiality layer. I mean, it's a bridge between the public and the private world. On the on chain part, you have an ACL, which is the Knox smart contracts, um ensuring um on where the user can define essentially who can see what, the auditor, the regulator, the counterparty, or a even no one.

Um on the on chain part off chain part, sorry. It's where like I mean, the magic happens and the real thing happens. Um the ingestor will listen the event from like the Knox smart contract on chain and he will route them to the runner, which is essentially the enclave TDX. This runner will push back the result for the private computation who happen like inside enclave to the under gateway through the KMS, which is like a element I think key element in our protocol. The key um the KMS, sorry, ensuring that only the authorized recipients can have access to the like complete data at the end.

So, let's deep dive now on most like the use case, how we can use TEE in DeFi firstly and we'll see more in the RWA part. We have three use I put three use case uh in this slide. The two first one is like I mean, quite the same, but it's all about like having private order executions in DeFi protocols. What does it mean? Like you will be able to like put some order uh in like an order book, which is processed processed inside like a TEE enclave. So, all the order inside this enclave will be invisible until settlement, which is like they will be like uh not public until like uh the settlement on chain on the trade like uh happens.

So, the trade execute on chain and the intents never leaks, which is essentially at the end like liquid uh dark liquidity pools, which is dark pools. So, with dark pools, uh the pool composition, uh the position size, and the LP management, and the LPs allocations will remain like encrypted inside the enclave. The third use case, which is like quite linked to the RWA one, is like more privacy vault, encrypted vault positions. With this type of use case, our user will will interact with DeFi vault without revealing the deposit side, the yield strategy, and at the end the exit timing, which is quite important for like institutions, RWA issuer, asset manager, and so on.

Let Now, let's deep deep dive more on like uh TEE x RWA cuz as I said at the beginning, we are here like since 1 week and we everyone talk about like RWA, I mean. And we want to like be more focused on that topic cuz we do believe that there is like one like places for RWA x confidentiality in the coming months, in the coming year. And I think it's the answer that um like how institutions can bring on chain a lot of asset more than 26 billion, I mean, and more less than 0.0.07% on chain.

So, here is how it work essentially on chain um about like the Knox workflow. You have at the beginning an ERC-20 token or any classic token on your like EVM chain or not, you will put into like a wrapper, which is a SCL smart contract, and you will the wrapper will wrap it um into like a C token, which is which mean confidential token. This confidential token on I mean, it's my job to develop that, will be used into like some integration on chain into like protocols, RWA platform, RWA marketplace, and so on.

We work with a lot of uh and we discuss as well with a lot of vault provider um RWA issuer, as I said, to integrate this type of standards cuz as input you will have like an ERC-20, let's take an example on on the EVM chain. You will have an ERC-20, but as an input as an output, sorry, you will have an an ERC-7940, which is a new standard developed by OpenZeppelin and Zama, uh which handling like whole the confidentiality on chain. You You will have an example after. So, the work for us is to implement these standards to like the existing protocols in defined RWA. So, it's our main problematics uh in the next few months to have like a composability, to have a liquidity behind like the confidential token.

Let's talk about like a huge feature for us, which is the safety disclosure. Um this feature allow, as I said, like investor, asset issuer, RWA provider to grant access to like the history of the transactions to anyone else that want to have access to that, meaning like institutional, uh regulators, counterparties, auditors, and so on. So, they will do that with um as I said, the SCL smart contract engine, which is um a smart contract inside like a TE Intel TDX. So, at the end, investor on like institutional uh define who can access to their data uh under what conditions. It's quite powerful cuz we do believe that we need to mix compliance and confidentiality to have like a success, I mean, at the end cuz

um the main things uh today is like um we saw a lot of new regulatory framework work each month, like each year, and we need to work with that and not like hiding uh our eyes about that, so. >> [snorts] >> Uh at the end with this feature, I mean, your asset asset will be auditable for regulator and invisible for the market. So, which is quite important for any RWA issuer that want privacy on chain. So, here is like a concrete concrete example of who see what at the end at the on the investor side, um he will be able to see their own balance, I mean, classic one.

Um he will control who access their data within the SCL engine, and he can set SCL rules. I mean, as I said, uh define who can see what at the end auditor regulator nobody. On the regulator side, he will have access to uh the data that they like that they receive the grant access at the end. He will be able to see what's compliance require, like nothing more. And um he will have um as a proof of like validations, the blockchain explorer transactions. Lastly, on the market, um the retail user or the market will uh know that the transaction occur on chain.

Um they will see the wallet addresses, I mean, the sender and the receiver, but the amount and the portfolio exposure will be fully hide. No market exposure to on these two topic. Here is a concrete example. This morning, I sent one RLC, which is our token. Let's play it. Um which is yes, the RLC. So, I did like one public transactions and I did one private transactions. The first one, you can see on the explorer that I sent one RLC here and here. I did the same with the confidential confidential RLC, which is like a C RLC within our protocols and through Knox.

In the explorer in block block scout, you will be only able to see the receiver and the sender, as I said before, and not like the total amount of the transactions will be hided by this a few dots. You will have like a confidential transfer informations, but no amount on the explorer, fully hide through the Knox protocols, which is quite powerful at the end. These two screenshots come from block scout explorer uh through the Knox. So, I will have some link at the end, but feel free to come into our demo to to wrap it, to test it, and to transfer some confidential token, and to enjoy like the private life at the end.

Here is uh some use case about RWA now cuz I do believe that RWA will be more like um uh open to have some confidentiality and compliance uh in the next few months. We work with two use cases mainly uh with on top of two standards, new standards, which is the ERC-3643 and which is like the ERC-7540, which is like a I said a lot of number, but I will describe on the whole um its mean. The first one is essentially like an ERC-20 with some compliance on top of. So, you won't be able to trade an ERC-3643 without a compliance check, which is like a KYB KYC.

So, yeah, you won't be able to do that without this KYC and KYB, which is quite powerful to institution to come on chain to trade T-bills, commodities, private equity with these standards. The second one is I I mean, essentially the same, but for vault. You won't be able to like um jump into a vault without KYC with high KYB, and these standards essentially are asynchronous vault, which is like for deposit and for withdrawal, you will have like a redeem period where the compliance check happens and where like the I mean, the protocol check if you are fully compliant with the the smart contract rules.

For these two standards, which is like mainly the use case for stock tokenized uh security, private equity, private credit, and so on, and vault, which is a more yield strategy on on chain, we will integrate Knox on top of to like have a mix of compliance and security and confidentiality. So, at the end, you will be fully compliant, but as well fully like secure and fully confidential on chain. So, here is about Knox protocols. Um as I said, we just launched our protocols on Monday on testnet. Uh it's like a month of works. Uh we are more than happy to have some feedback feedback about like uh the demo, but also the protocols itself. We have some developer here. Uh feel free to talk with them

about tech. And we have like built these protocols to have an entire playbooks uh to support institutional to come on chain, but also to support RWA issuer, RWA marketplace, RWA platform, and if a project want to have confidentiality, we can support them to have that on top of their projects. So, as I said at the end, you will have with Knox protocols in the next few months on mainnet on mainly EVM chain, you will have composability, I mean, liquidity behind the confidential token. You will have like um a smooth UX, which is like quite important to onboard more retail user at the end.

You will have trustless, you will be able to prove it when to prove it that the the token uh run inside TE enclave within like some attestation, and so on. You will be able to like uh touch some multiple privacy tech. I talk about a lot about privacy, but we do use like ZK. We are in maybe uh integrate some new techs if the need happens. We will be like omnichain and multichain. I think it's a key point here. You As I said, we create a private layer. So, we are fully composable on any EVM chain, layer one, layer two, but also if the need happens in like another uh language, I mean, like Cosmos, Solana, and so on, we will be able to go there with a little bit of work.

Uh and uh the last one, uh as I said, is safety disclosure. Uh we do believe that it's a key part of our protocols to onboard institutional, but also any project that they want to work with us cuz the key part of the RWA is to mix compliance, blockchain, and confidentiality. So, this feature answers the three questions, and we are quite like happy to have uh this one on our protocols. So, yeah, as I said, our demo is available since Monday. Uh here is the link about like to trace the wrap, the transfer, and the unwrap amount. It's basically shield and unshield like functions. Uh it's on testnet on Arbitrum, and yeah, feel free to test it at the end, or like um we are also available in Cannes in the next few

days. We organize like a private garden party uh in 1 hour. We will have some panel about like confidentiality, data privacy, and so on uh in the Hilton Canopy near to like the main event. So, feel free to come with us and talk about privacy and so on. I'm happy to answer any question if you may have here. Thank you. >> [applause] >> Do we have time for? Uh so, where would be the TEs? Is that

for like who will own the TEs and uh process the transactions on the TEs? Will it be the nodes or I mean, you mean like the the running of the transactions? Like the smart contract like owner? Yeah, like where the TEs uh execute exactly. Like is it for those transactions for the uh confidential tokens? Or is that some complete other thing? We have both. I mean, we uh we use TE to encrypt the SCL, which is like the smart contract for like uh access list control, and we do use uh the developer are here, but we do use TE as well to encrypt like the smart contract computations for the use case uh specific use case.

Those smart contracts are on the EVM? Yeah. Okay. We are all EVM uh based for the testnet on Arbitrum on mainnet. Okay. Here we go.