Zero-Knowledge Smart Contracts with Alex Pruden of Aleo

Transcript

me uh private chat and I'll I'll retweet it as well all right well we're live so all right it's on it's on here all right let me send you this tweet hey everybody who's tuned in uh yeah so we're live um my name is and I am the host of the interop which is all about understanding and exploring the decentralized economic networks that make up the inner chain uh today I'm here with Alex Brewton who's the CEO of elio I've been told it's pronounced Elio like paleo so hopefully I get that right throughout the show uh there are blockchain that are bringing zero Knowles to Smart contracts uh we met uh two weeks ago in Korea and uh you were given the talk there at Little Asia

and had a chat in the in the speaker's room and you know it was really interesting what you guys are doing so I thought it'd be cool to have you on um so hi thanks for thanks for coming on yeah thank you very much for having me this is uh this is gonna be a fun chat yeah uh looking forward to it uh so you know if you guys are watching and listening uh I I you know I do want to like mention the brief Hiatus on which we've been for the last I guess month or so uh but you know the air off is back and we're gonna be producing episodes every week it's been a really crazy summer with like nebulous Summit uh which was at the end of July and then after that like traveling and some time off so

um the interop is back and we're gonna keep it at the regular schedule uh hopefully doing episodes every Thursday around this time so yeah you know you've got an interesting background so you were in the military before getting into crypto um I heard someone tell me that you were an AV seal is that right um sure we can go with that uh no so not technically although I was uh I I guess at the end of my military career I was uh in Special Forces and the team that I was leading was a had a dive specialty so this is probably more than anyone cares to know about U.S military Special Operations but in the Army there is a subset of people who do focus on Maritime and dive operations like the seals

um it's a little redundant but anyway so that's uh I guess maybe you could say I was I was doing something similar but yeah I guess my full career so I I am my full kind of story before crypto uh I was in high school at in when 9 11 happened my parents or actually my my uh yeah both my dad and several generations of my family had served in the military and of course 911 was a pretty big moment in the US and so I decided to to join the military as well I went to um the US Military Academy Commission in 2008 as an infantry officer which is basically like a basic rifle Rifleman effectively um and I did that for five years did a deployment to Afghanistan and then I went spent my last four years in US Army Special Forces which is colloquially the

Green Berets anyway so the the key piece of that story is I guess relevant to this audience and this podcast is how did I get into crypto and I got into crypto uh in during my last uh I was first exposed to crypto during my last deployment uh as a special forces officer I was working in turkey and at the time we were we were working on a program where we were training Syrian rebels and uh learned about Bitcoin from a Turkish person I had never heard of it before and I have not I do not have a technical Background by the way I studied Arabic and international relations in my undergrad and I was in the Army so I and I did nothing technical in the Army but anyway I learned about this concept of Bitcoin from a turken uh because of the people

that we were working with mostly you know refugees Syrian refugees who had fled from the Assad regime uh that you know many of those people had lost everything in terms of their wealth overnight and went from being relatively well off and in a professional class say in like Aleppo or Hama or somewhere in Syria to living hand to mouth in a refugee camp and I was I I didn't know anything about Finance at the time and I guess my first ignorant thought was like well why don't you just pull your money out of the bank account and like you know buy a house whatever right of course you know everyone's probably laughing because as you know like the financial system is really built around the US dollar it's easy to pull money out if you're An American in Europe somewhere but it's if you're a Syrian

and your wealth is in Syrian pounds uh then it's not really possible to pull out your money out of your bank account in turkey or Lebanon and it's even more hard or it's even harder rather if you know your wealth is tied up it's a physical asset so anyway the idea of Bitcoin really caught caught me in this idea where it's like okay well if you were able to transfer your wealth into this digital form and you you are the you know bearer of that asset you can basically have the bank account in your head walk across any Border in the world and start over again so that was that was kind of the insight for me and that's how I first got into crypto that's interesting so you know a lot I think a lot of folks in the crypto space you know when thinking about places in

the world where there are Financial controls or or people don't have like the same sorts of financial freedoms as we have in the west they immediately go to South America places like Argentina and Venezuela and like these places right like in you know the the sort of crypto use there has been widely documented like people like Camila Russo have written books that like crown and Chronicle this stuff and like I I've never really encountered or I haven't heard much uh talk about you know using crypto in the Middle East and you know in sort of war-torn countries like Syria and places like that in fact a lot of times I think when we hear about crypto in those places it's you know from the

mouthpiece of like regulatory folks or you know politicians that are talking about how like Bitcoin is using being used by by you know terrorism by terrorists and like daesh or whatever um did you get a sense that it was very broadly used by the the kind of working class that had been you know lost you know their uh their livelihoods and or was it sort of like a very Niche thing I think we lost Alex um oh there we go all right we're back I don't know if that was you or me but whatever I don't know but we're back

that's all it's matters we're back all right but I got your question uh I guess it was asking about you know that the The Narrative around use cases in the Middle East is often tied to you know okay terrorist financing Etc and I think this is most relevant recently with you know kind of the ofac pronouncement of sanctioning tornado cash which we can get into it yeah so so look I you know I have a I have a pretty strong and unique view on this because I you know two of my deployments including the one where I was training the Syrian rebels I mean we've focused on fighting daesh and uh it you know and was very aware of how they were raising money and the reality is they were raising money through the traditional banking system by and large and that's how they were financing

themselves and selling oil on the gray Market not even on the black market um so I think look like any technology um crypto can be used for good and bad right and it's it's just a tool right and it depends I think we need to separate my my high level tldr on the matter is like we need to separate the tool from the people using the tool I think people can use you know there's all depending on the legal system there's like a way to use a given tool that's legal or illegal and I think that we need to separate that from the tool itself now I I clearly have a view about political principles that are important I mean I I spent nine years of my life fighting to defend the US Constitution

so like those are things that matter to me and this this principle of Liberty is something that I do think is very important for Humanity like individual liberty and that's one of the things that I think is special about crypto is that it encodes in many ways uh your Liberty in the digital world right and it's it's a means to to reclaim that which I think the direction that the internet had been going for the last 20 years was in the opposite direction like it's harder and harder to control of to to take or maintain control over the things that you would care about namely your information and data about you so I guess what we can put it we can maybe come back to this conversation but I think overall you know the story about that cami

writes about with South America I mean look it's it's a universal human story right you as an individual in some place don't have control over the state of the world around you right you're just one person and when the when the powers that be decide to change the rules suddenly then you just have to adapt with that and when those rules have to do with finances like if the Central Bank decides to inflate the currency and there's runaway inflation like you know you're just stuck there's no control that you have and that's like The Narrative of Bitcoin for specifically early on was what I think a lot of people reacted positively to and and what led them to it in fact it's funny if you talk like I talk to people in the US all the time and who are less familiar with crypto and they they kind

of are like okay I don't really understand I have a store of value it's called my bank account dollars but if you go honestly if you go anywhere outside of us and Western Europe people immediately get it they're like even if they hadn't been exposed to crypto before um and so and I think it's true in Venezuela it's true in Turkey it's true in many places in Africa so yeah I think there's definitely uh you know we we definitely have this um this thing that we take for granted here which is you know the ability to just like transact and like you know we were both in Korea last week and or two weeks ago and you know like there there was some friction there and using your your Western Bank account or bank card in

some places or like having to use Google Maps and things like that which doesn't really work in Korea and so you know to the extent that like the frustration that I felt like being there having to deal with these sort of like small um inconveniences a lot of people like just this is their daily life you know I think like a lot of folks you know who even people who work in crypto like just don't realize the extent to which this is a real deal for like a lot of people around the globe um but yeah no uh you know interesting to hear about your background and I think like how that shapes your thinking around these things it's probably like really really valuable for you so um let's let's get into

um the Elio and you know like give us a high level overview of what you guys are building here and and maybe like maybe one one interesting aspect that I'd like to touch on here it's like what is a fully private application like I've seen that on your website like what does that mean and not only technically speaking but also from a user perspective yeah when actually using this stuff what does it mean to be using a fully private application because it seems so contradictory to everything that we know and like we use on a daily basis yeah yeah so uh I'm gonna answer that and as in my answer I'm going to finish maybe like just giving people context on how I even got to a Leo so I started you know

I got in crypto and then how do I get to Alias and this is going to start to answer your question and then we'll go into a full answer of what is a fully private application so yeah I got out of the military I went to Stanford I was in the business school but I was interested in computer science so I spent time over there learning cryptography Etc and uh got I met a professor of computer science of cryptography specifically who worked at a16z the crypto fund um and he recommended me for a job and I ended up working there for two years before I joined Elio now in his CL in this class so this is Professor Bonet Dan Bonnet who's written some uh relatively groundbreaking uh work on digital signatures specifically and a lot of other things but in his class I

learned about zero knowledge cryptography and maybe it's worth pausing for a minute to inform all of your listeners what this is because a Leo fundamentally is built on this cryptographic primitive known as zero knowledge cryptography so zero knowledge cryptography is basically it's a it's a cryptographic technique to prove something without revealing why it's true the simple example that I like to give in this case is like said you and me are playing poker uh you claim to have a royal flush and of course how do I verify that you have a royal flush you need to show your cards when the rounds of betting are over and then we decide okay yes you do have a royal flush and if that's better

than my hand you win the pot right so that's typically how we think about verifying information is we need to physically see the information to know that it's true or see the evidence that would convince us that what we're told is true and zero knowledge cryptography is kind of magical because it breaks that Paradigm you no longer need to see your hand of cards to verify that what you're telling me is correct right and it's like in poker it's kind of a bit of a contrived example because you're like okay does it really matter but there are many cases in the digital world today where this could be incredibly useful you pointed out earlier that the way that the internet has kind of evolved is we're basically constantly emitting information about ourselves that is

extremely personal especially when aggregated and that's that we often view the downsides of that like okay well people can aggregate this information and maybe create advertisements or or things that could manipulate me or nudge me one way or the other and apply writ large that could be bad but it's also important to acknowledge that this is enabled a level of personalization for various products and services that was unheard of before the internet existed right and so I think there's there's good things like we we want to share certain aspects about ourselves so to get better so as to get better service and products right and typically most people do I think and there's a spectrum of course depending on how how much people want to share or

not but the nice thing about this tool is it's not it no longer becomes All or nothing I can prove to you a fact about myself I can prove I visited a website I can prove I know you know some password to log in without having to reveal the thing itself so anyway now let me so this is zero knowledge cryptography in general is what I got really interested in at Stanford uh as a you know as a student in this class and a16z was looking at a lot of stuff and and this company which where is is Elio so I discovered a Leo and at the time it was it was it just started the four Founders and I'm not a Founder by the way I was the first non founder to join but it was the four founder of students out of Berkeley uh one of whom had written a

paper called sexy which is short for zero knowledge execution and the idea was basically to take this zero knowledge cryptography and layer on a smart contract system on top of it so that's a Leo so now okay now getting to the question of what is a fully private application so that's kind of like I we're talking Bottoms Up what is a Leo now top down what is it what is the user experience so the idea of fully private application like the Privacy that Elio offers is really privacy by default because again I think there's there there are reasons why we want to share certain inform there's reasons why we want to share certain information depending on the application but there's also I think over overwhelmingly for many applications especially Financial applications that people care about they they are going to want a degree of

privacy and the nice thing about a Leo is you can decide as a developer and as a user what information you want to share and what you want to conceal and so in that sense that's what we consider to be fully private I mean it's really we should probably reward that because I think it's privacy tuned to exactly what you want there is a world in a Leo and this is not true of every privacy focused blockchain where you can reveal everything like that's that's possible the reason we make it by private by default is because on other chains let's take Z cash for example where it's public by default the tendency is for people to not hide anything and so then it's very obvious when one per it's like you know you go to a costume party and you're the only one wearing a costume or like okay I

wonder who this is you know what I mean so that's why we think it's important to have a private by default um kind of mode but but to let people choose the degree to which they want to have privacy in their applications I'll pause there I hope that's helpful or answering your question yeah totally and I like one of the ways that it's described on I think on the website though there's like this quadrant right and on the bottom left you have Bitcoin and the bottom right you have ethereum on the top left you have Z cash and you know Z cash is is the private Bitcoin ethereum is the sort of customizable or programmable Bitcoin but we don't have a

thing that sits in the top right quadrant which is programmable private applications and this is where like paleo sort of you know comes at this uh you know from from this application Paradigm right um exactly what like let's talk about some of the types of things that I think this is helpful like what are the types of things that we could build um using a Leo and some of the you know early use cases or like applications that people are building on the platform yeah so um I'll cite things that that we have teams working on currently through

grants or Partnerships uh so I'll give you I'll get four examples so one is um uh decentralized exchanges in particular a decentralized OTC desk right so for people who are not familiar with Finance you know you have like big kind of order book style exchanges like coinbase and crypto or like you know NASDAQ well at nasdaq's index but like you know the New York Stock Exchange rather like well that's where like you know anybody can come and you know place a bid to buy or sell something and there's just a central entity that manages an order book and fills orders as they come in right the reason why that's I mean so it's popular obviously for you know many reasons but

those are the reason why that many big funds don't use that is if you're trading in large amounts you number one reveal some information about whether you're long or short an asset which you may not want to reveal to the market and two you may cause the price to slip very far One Direction or the other if that order that you're placing represents a large percentage of the total liquidity available for that pair so this is why OTC desks exist it's basically for large or counterparties that are holding large positions and want to sell or buy large positions they can kind of independently get together and that is facilitated you know by it by a desk quote unquote and those those trades all happen and exchange off the centralized exchange or

off of the order Book Exchange so no one actually knows that it happened therefore price is not affected and no information is revealed about what your intents your intention is or you're long or short something so we had to centralize exchanges on ethereum I mean uniswap is like one of my favorite crypto applications of all time it's great it kind of like is this super cool decentralized version of an order book type exchange but you don't really have the ability to do a OTC type swap on ethereum right and like I said one of the key things about this is you want to make sure you're not revealing who you are as a counterparty and not revealing the amount that you're trading which is the opposite of how it is in uniswap right in fact this is kind of a problem depending on who you ask on a open

transparent blockchain where a decentralized exchange where you're always vulnerable to front running so you can imagine if you placed a gigantic order on uniswap there are Bots that are watching that contract constantly in the mempool to see who was trading and they're constantly trying to get in front of or behind uh this order for their own profit at your detriment and so something like a decentralized OTC desk is possible on a Leo where again the counterparties can be private the amounts you're trading can be private and that can all be facilitated by by a smart contract and potentially sequencer depending on how you want it or to uh to set that up so that's one example so that works for I mean this works for an OTC trades and I can see how that works for our DC trades because you you you have to coordinate this kind of Coincidence

of wants uh where on one side you have like someone who's placing a bid and you know it's like they're placing like an order and on the other side you have like uh you know large orders and the amount you know the the amount of orders to want like her bids is reasonably like manageable probably like more so than on a on an order book decks or like on a on a or on an orbital exchange or on a decks um does this work when we start getting into like order book style like exchanges or just more traditional like dexes um can we do private uh trading there as well yeah absolutely so I think there's

the I think it has so it has to depend on what your definition of a DEX is right so something like uniswap one of the reasons why uniswap works in the way that it works is that it's kind of all transparent right what is unit swap right it's it's two it's like two pools and there's a line or there's a function that relates you know the the you know the the amount in in either pool right that's basically where you are on that line depending on the ratio uh in each pool is the price right that's your trading price so that like again what I just it told you implies that you need to know like a certain thing about that constraint like you need to know what's in each pool or someone does right to be able to give you that price

um so you can again like I said with a Leo it's private by default but we have the ability to make certain information public such that you could exactly recreate the uniswap model but even in in some sense a little more privately where you know you're going to need to know the information about the state of each side of the pool and thus to be able to prevent present a price to a potential buyer or seller but the nice thing is you can deposit into the pool fully privately so people don't necessarily have to know like what positions you hold or what percent of the pool the liquidity that you're providing is for example so yes you get the short answer your question is yes you can absolutely replicate a unit swap on a Leo you can also do something closer to zero X which is almost like a

more small scale version of the OTC model that I described earlier so these are all models that are possible and again this is a new paradigm that people like we're just now releasing the ability for people to deploy programs in alia and it's just like ethereum you know when people first got their hands on ethereum they didn't quite know what was possible I mean uniswap was kind of only conceived a little bit later although bancor kind of did an amm thing um so I think I'm excited to see the other types of permutations of what an exchange could look like that people come up with what what are the what are the kinds of things that you know like so okay maybe maybe a a DEX in the way that we think about uniswap would be difficult because you you need to have that market transparent

that transparency in order to find the price like that that's part of what uh makes a DEX possible what are some of the other things that you know we know as like D5 Primitives or applications on blockchains that just don't work in in the zero knowledge context um yeah I wouldn't say I don't I don't know if I would use the term don't work I just think it's you have to the thing with zero knowledge that you have to remember and this is by the way this applies to every ZK VM anything that's using zero knowledge this is a cryptographic ticket again what is zero knowledge it's like I can prove to you that something is true without revealing why the key piece being without revealing right so

if you need to know the thing that's that that's being proved you know if there's some State it's like to be to put it in concrete terms for a program if there's some state that you need to operate on as a user that you that you want to update like and it's and you want everyone to be able to update that maybe concurrently in the course of a block there needs to I that either needs to be transparent on chain or there needs to be a a party that maintains that state generally right now there's another cryptographic primitive out there that is interesting and it still enables you to preserve privacy that this is not what Elio's focused on but in the future I think we could see a Leo ethereum and a lot of blockchains looking to use this it's called multi-party computation which is or and also fully homomorphic

encryption so let me Define these two things multi-party computation is where everyone has a little bit of the of the story and they like collectively can run a computation and no one sees everything uh and then fully homomorphic encryption is you can send me some encrypted message and I can ask a question of this message that's arbitrary and get an answer without seeing the results so these three things I think in the in 10 years from now will be combined a lot of times people look at them as substitutes for one another NPC and zero knowledge and fhe but I think really the cool thing is these can all be combined to enable applications to be as private or as not private as you want again to me I think there's always going to be things that we as users depending on the application category are going to want

to be public and want to be private yeah I think the biggest thing is just remembering the Nuance around concurrent access to the same state that's that in general requires you to either have a sequencer or to make that public okay um and so one of the things I I learned while you know researching this is that that the X the execution doesn't actually happen on chain so the chain itself does the proof verification but the execution of the application logic happens off chain can you describe how that works and like who's who's executing the the logic and as a you know as a counterparty user of an

application let's say like you and I are engaged in some sort of you know like some sort of transaction um how do I know that the code that you're running uh actually does what you told me it's supposed to do um yeah yeah great question um and yeah so you're right the model of computation that Elio performs or the the Paradigm I guess that aeleo is in is this world of off-chain execution on chain verification by the way this is this is a pretty much exactly how Roll-Ups worked 2 right where you have a sense of like okay there's some other network that's coming you know that's doing some computation and there's a result is just posted to the ethereum blockchain for example or Celestia or

whatever um and this is this is kind of the model that you should think about for Alia and there's you know I think people are probably already aware but there's a lot of really nice things about this model so one it's much more scalable um on ethereum and most smart contract blockchains today nodes have to re-compute and re-run every transaction every single at every block right so everybody's doing a ton of duplicate work um with the model of a Leo you know you submit you the user generate a transaction on your own and then you post that transaction which is in the form of a zero knowledge proof that then nodes only need to verify so a node just simply needs to verify cryptographically

that the proof is correct and then they can include that transaction in a block which is a trend you know it affects a state update so that's much more efficient and therefore much more scalable than a model where everyone does all the work right it also saves a lot on Space because instead of all of the steps in the computation that you need to save because if you ever want to re-sync a node from Genesis you need to re-run through each one of those steps you know you only need to save this proof and this proof records by the way this is why other how other blockchains like Minna they've they've kind of taken this construction to the next level where it's like you have proofs about blocks and then you recursively construct these proofs of blocks all the way back to the beginning such that you only have just a

nice succinct proof that says hey this like client that you're running is absolutely the canonical one and this is you know I think this is a plan for us to do in the future as well but again that's another application of zero knowledge proofs in addition to concealing they can compress um so that's so that's one big thing is the efficiency and again the other thing is and we talked about this earlier but this is this really is enables you to conceal information that you don't want to share right because to if I want something executed publicly AKA I want the nodes on the network to execute it you need to do a transaction in the model of Bitcoin or ethereum today you basically need to publish your instructions to the network and then there's a lag period between when you publish those instructions and when they

get executed and then the interlude anybody can do anything they want with that information right it's just like again the unit swap front running example is the most obvious one it's like okay you're doing a trade I'm going to do a trade in front of you and maybe try and front running right and even if you don't get front run those instructions still exist for all time and so there's very it's very hard to have privacy in that model so the off chain execution model ensures privacy in addition to efficiency the other cool thing last thing and this is a little bit more nuanced is it allows for programs with unlimited runtime and so if you think about a program on ethereum like we have this concept of gas right to make sure that no one basically just doses the chain they don't like have a program that just goes

into an infinite Loop that's why gas exists um that obviously makes the Computing model tractable but it limits the types of things you can do the most obvious thing is like okay you can't you can't run any program that's longer than the ethereum block time right and you're like okay well why what would I do that's longer than ethereum blocked I don't know I mean there's a lot of models to that you know to run like AI models for example um to run would take longer than 15 seconds even on a very performant machine so you like even basic AI algorithms like a linear regression would blow up in terms of gas on ethereum but the nice thing about something like a Leo where you have this off chain execution model

is you can run a program for days for years I mean you could I don't know why you'd ever do this but you could do like the seti thing seti at home or like folding proteins in like 10 years from now you can prove that you found something and it's still a valid transaction on chain that you again in the model of gas you can never do that because it you simply need to have each computation needs to be Atomic per block okay so so things are executed off chain in essentially like a zero knowledge circuit and we'll get to you know what the tools that you've built around that in a few minutes but okay so let's let's go back to like my zero knowledge Basics here

um this is something I feel like I used to know a lot more about maybe because like I was using it in my work or you know like my previous company like we talked about zero knowledge or not a lot but I feel like I've kind of lost like the the mental model of how this works so let's say like you and I are engaged in like some kind of you know transaction and I need to uh I need to prove something to you so like I need to prove to you you know like my age for instance but I don't want to reveal my date of birth um uh I'm going to like input my age into this circuit um in how will come like a true or false uh about whether or not I'm like over 18 or like this is a simple example but I

think it's one that gets used a lot of things your knowledge you're gonna you're gonna get the um you're going to get the proof uh that proof will be submitted on chain and but like at what point do you have the ability to verify the code that's in this circuit is that code like posted somewhere and there's like a hash or like what what's the verification method because also it's being executed off chain so how do you also know that the thing that gets sent to the Elio chain is the thing that came from that zero knowledge circuit it's a great question and this is this was really so sexy the paper that Elio is based on was written by many of the Z cash founding team several members of the Z cash value team

and some members of it of its current team and this was this was the idea they were trying to that they were trying to solve right or zcash this isn't a problem because zcash is just I send you money you send me money if there's implicitly there's only one program now how would you expand this to any program now and the idea here is that we have a program registry that lives on chain and each transaction is has an a program ID associated with it so and you know you need to have access to this program registry because in order to sit in order to verify or prove a transaction about a given program you need to be able to synthesize what's called a proving key

and a verification key and to do that you need to know what the program is so that so if we both have a shared understanding of which program we're operating on we can both synthesize the cryptographic keys that we individually need you to prove me to verify and that's how we maintain awareness about what we're talking that's how we speak the same language functionally and that this is okay this is different by the way this is similar and it's different it's both different and similar to ethereum it's it's similar to ethereum in that it's the same thing like smart contract byte code is lives on chain right so nodes host the byte code right in the same way nodes and a Leo host the a Leo the AVM byte code or the allele instructions for a given

program now the the key thing here is there's a key value store that maps program ID to program and that that's a namespace that lives at kind of the base layer that you can also do a lot of other interesting things with okay so the the programs that people are running off chain also need to register on chain in order to to be recognized by like different users of the Alienware chain and so like now if you present to me so like here's some off-chain application that you're gonna interact with um you as a user as a counterparty to that I can look at the AIO chain uh see that that program has been registered

and it's a way for me to verify that this is exactly actually directed not only and it's not just you're seeing it you you need to synthesize the actual verification key to be convinced that whatever the proof you sent me is true so you actually need access to that from a cryptographic standpoint okay so you so as a counterparty user do you also have access to the code where you can verify the code that's being run yeah yeah so the the way that when you synthesize is what you do basically you sort of like do some process by which you take the code and then like you get to verify that code actually what's on chain yeah exactly so effectively the the way it's just like so in ethereum like you know we we take advantage of the fact that there's like decompilers right

like ether scan for example takes evm byte code decompiles it and gives you okay this is the contract you're interacting with same idea in a Leo so there's like the program ID and the avian byte code which can be decompiled and you can read in a human readable form what the program is and then you go the other way and compile that byte code into r1cs and then from that synthesize the privy key or verification key so that's why that's why it's very specific that the what is stored on chain is this compressed or serialized form of the human readable instructions because then you can go up or go down this is why it's called an intermediate representation you can go up to the high level human readable stuff you can go down to the low level r1cs which is what you need to actually compute

okay or verify cool so I want to talk about the compiler like this r1cs and like you know this language you guys have built um but I think it's helpful to maybe compare this to other platforms and the things that come to mind here are um starknet and all the work that the starboard team have been doing over the years um there's also I think a Noma comes to mind when you talk about you know like having an OTC uh desk right that that is private and where you essentially have like you know a this Coincidence of wants right where you have this coordination between

someone who like has something to offer and someone who um wants something um I know amount comes to mind because I think this is like fundamentally like what they're trying to build at a very um Atomic level and then you know maybe another and and we were talking about this earlier and we're like unsure this is possible but like if you take something like Celestia which essentially allows you to just send proofs to it um one could you know conceivably build like a sexy uh execution environment that runs independently off chain and it just sends proof to Celestia um what how do you guys you know maybe from what you're familiar with these other platforms like how would you

compare to some of these other initiatives yeah uh so first off let me I guess uh just to maybe distinguish between like the aloe andoma case potentially so I think there's a lot of use cases for besides just Financial transactions and one I want to really highlight or two real quickly I'll highlight is identity so one thing that by the way is relevant to D5 is relevant to a ton of other applications in crypto is this concept of self-sovereign identity or on-chain identity and it's very hard to do this in a blockchain like ethereum where you're just you know I can go to your account see everything about you the second you authenticate one time right this is I think identity on or off chain in the digital world requires zero knowledge right you want to be able to prove like for example I want to prove

that I served in the military without revealing like what unit I was in or where I was deployed or something like that right it's like that's like this is something this is how you would want to build an identity system it exactly replicates the way that identity works in the real world right I can show you my service record or like show you that I have a VA card without you being like okay you know I this is now I know everything about this person service so that identity is a huge use case gaming is another really cool use Case by the way I love this is like one of my favorite use cases for zero knowledge because I think on-chain games and crypto like crypto gaming is just this unbelievably lucrative Undiscovered Country right there's this opportunity to have on-chain player owned Dow owned

games they can live forever and kind of morph and change as the con you know as the players change that's not possible in the real world like the way games work today and the games that take advantage of like private information like Battleship for example is not possible on the in the transparent blockchain model it's the typical smart contract model because I can look at your account see where all your ships are it's not really fun right the private information aspect is what zero knowledge gives you and that's actually one of the use cases that we're most excited about anyway but back to your question how does it compare um see I think Anonymous focused mainly on this this concept of bartering in like a barter economy and thinking about different assets and trading them so that's the their their focus uh and knowing those folks pretty well maybe

they would differ and hopefully have them on the show at some point they're a great team uh and they're they're doing a lot of cool work uh in the cosmos ecosystem I know especially uh but there are I think their main focus is more on this kind of bartering and this economic transacting uh model whereas we think of ourselves as more General again like I said trading you could do an OTC desk but I think you know identity things like that are also use cases that we really care about and focus on um there's some other distinctions that are kind of more low level in terms of the cryptography but we won't get into that um stockware is so I think two main distinctions from starkware uh or Stark net uh and I know it's Stark net and Stark X I think so uh so number one it's

different yeah I also get those confused sometimes yeah I think Stark X is like the validium roll-up and Stark net as the zika rule um anyway uh so two I think two main ones uh one it's using a different type of zero knowledge proof which is better in some ways but also has some drawbacks uh and namely the the one of the big drawbacks of a stark versus a snark and Elio is built on snarks is the proof size so proof Skies the proof size is not constant the bigger the program that you run the larger the proof size is and kind of at by default proofs are very large so it's very hard to build a blockchain totally built around Starks because the size of the chain would massively blow up very quickly and you would have effectively a

centralized chain but that actually you know that's the other distinction between a Leo and Stark whereas starkware is a is not a totally permissionless system like the Stark prover that they've developed which they use for their roll ups is licensed right so you have to you can't no one can permissionlessly generate proofs on that system there's a there's basically a sequencer that they run an approver that they run and the model there is you delegate to this prover the prover runs the computation for you sends you back the result they can't cheat you but nonetheless you yourself cannot permissionlessly deploy a program or permissionlessly transact in that system and that's by Design whereas Elio takes the opposite philosophy much closer to what ethereum is where it's like you

don't need to ask a Leo permission to deploy or transact you can prove now you can do the same thing where you're delegating approved to a third party and we think that's a very interesting ecosystem that we'll be developing in the future around your knowledge where you know like these proofs are kind of intensive to compute so you may want to offload that to a server in exactly the same way that the today's like client server architecture works for the web like my phone you know my phone is not that powerful relative to a server in the cloud so you can delegate some instructions get get a result back the nice thing about this model though with zero knowledge is that you can verify that this was done correctly for you so yeah I would say the permissionlessness is the main distinction between a Leo

and starkware specifically and then oh Celestia we're supposed to talk about Celestia yeah so and again I'm not as familiar with Celestia um but my recollection of it um back when it was called lazy Ledger I think it used to be called lazy Ledger right yeah yeah and the idea there is just like kind of really optimizing for data availability and then like you can kind of do different Logic on top I think the one thing and again I'm not sure of this but the question I would have is like okay at the layer one what are nodes able to process like what are the nodes doing are they just hosting data or are they actually Computing over data an Elio like nodes are hosting data about the programs the state of Records which are basically what the results of transactions turn into and but they're

also able to verify transactions are correct right so this requires the ability to you know compute a zero or verify as your knowledge proof and that requires support of certain cryptographic Primitives so I don't know if those support for those Primitives exist in Celestia and this is by the way a big problem with a lot of the CK evm stuff that's being built on ethereum because the ZK requires typically if efficient DK constructions require special cryptography that when ethereum was designed nobody like thought they needed so now it's it's often a problem for compatibility where you have like it's very costly to verify a zero knowledge proof on chain in ethereum this is why for example on the roll-up side or the ZK VM side scroll ckvm

produces a block once every 24 hours it's just very expensive to do this and so this is one of the other reasons why we built our own L1 is we wanted to bake in all of The Primitives that you know that we knew we would need to build an efficient smart contract system in ZK right at the base layer got it um no that makes sense and I think like having a general purpose permissionless like zero knowledge smart Contracting platform you know it's like a it's a great utility to have in the space and you know the types of things that people are going to build on a Leo or maybe certainly different than the types of constructions that you'll have on an Oma or like on start net or Stark X system and

um I'm still I tweeted I tweeted out a while ago basically like asking my question uh whether or not we could do what I think we could do on Celestia haven't got an answer yet but uh well hopefully by by the time this comes out we'll have the answer I mean all these things are evolving too right so it's like it's always hard to like what can you do well it's like what can you do today or what can you do tomorrow anyway yeah let's talk about some of the stuff you built here and one of the things that I really like so you you have this language and the way that I would describe this is like Leo is a language that um compiles down to a lower level uh basically to like a ZK circuit and so it allows you to write a ZK circuit

effectively in something that's like akin to typescript and what I really like is like so you you've got your own IDE and everything so I think there's like one drawback to this and and it's similar to I I believe with um with uh starknet where you have to learn a new language um now with this you know perhaps having some background in like JavaScript or rust uh you could probably pick this up quite quickly but like you do have to learn a new language what one of the things that I like about it is that it's it's like an easy way to build a ZK circuit whereas like that's probably pretty complex to do um I'm sure there's libraries to do that

but you've got like an in in browser IDE uh which I'd like to show here um which is pretty cool because like you you can basically pick this up and like start writing DK circuits um right in your browser and I wonder if you know if we could go through an example here just to get an idea of what we're actually doing um so you know there's a couple of examples here maybe we can just take like a basic one uh like this one where effectively we're like multiplying uh two numbers and getting the result um can you walk us through this this example yeah sure so this is again a very simple kind of hello world example in this in

this case you're actually adding two numbers you're multiplying the result of those two of that sum to itself so basically yeah you're squaring the result of a sum um right and that's it's a simple program as you pointed out it's typed it's a bit tight I I like to think of it as like rust plus typescript I think if you if you see it's tight this is a type language So you you're defining what are the types here that you're using and let me just take a quick digression uh about types in the ZK because this is something that if you look at there's there's a number of different zero knowledge kind of languages out there um but this is something that does make Leo special is that we have support for um for kind of traditional types so one thing to note about zero knowledge

proofs is that these take like proofs are generated and verified over a different domain mathematically speaking than like what computers typically operate on like your computer our computer right now is built to do bit you know it's built over the the binary number domain right so everything's some bits right and that's how numbers are representative and the computers basically are detected to do binary arithmetic and Boolean logic right whereas proofs are cryptographic operations defined over elliptic curves that are just it's just different right it's a different domain and so it's very very hard to translate between these things that's why even though zero knowledge cryptography has been around

for a long time it's only just recently become efficient to generate to do proofs in production or to do zero knowledge in production and then it's only just now becoming possible to write arbitrary programs that where you can represent things like u32s inside of a circuit efficiently right so this is like it seems simple because every programming language does this but again I want to just I just want to point out that these at a low level the difference between a program that you write in Rust and a program that you write in ZK very very different and it's not it's a non-trivial problem solve okay so anyway so you have your inputs in Maine so you have two 32s that and the output is a u32 um and in this case I don't actually think there's anything that's uh that's

published here so you have we have a different um command that lets you it's kind of the equivalent of console.log in JavaScript for anyone who's familiar with JavaScript which outputs some public value so you could do that here um I will make you I will make you write it but uh just note that whatever result gets computed about inside the proof can be made public and um and yeah so then and then down here below you have your program inputs so this is what you as the independent is the as the user of your gen or the person generating the proof you you uh you have those numbers there and then that registers we won't get it we don't have time to get into it here but just yeah that's not really super important to remember but the key thing here is now you can run the proof

you want to say run so you can basically say okay take take my inputs Okay now what's happening here so if you actually want to scroll up in that um and that bottom bottom line there um Okay cool so yeah yep okay so the build okay so what's happening here is and this is all happening on the back end uh so you you've got this logic that's written in Leo now this is getting compiled down to the intermittent the intermediate representation which is the a Leo instructions those Halo instructions are then getting turned into r1cs which is like the low level representation of a zero knowledge proof the setup down here is and this is what you're seeing here is going to be different than what actually happens on chain because this is this is a little bit of a demo and

this as we update this as we launch our chain like this will be more closer to like what the actual experience is like but here the setup this is you're actually generating a your own you're doing your own setup ceremony here just for yourself and the setup ceremony for a ZK snark is critical to be able to generate proving verifying keys so this is where you're generating a setup in practice Elio has done a trusted setup already and this is by the way is the biggest setup ceremony ever we have thousands of contributors um so it's you know I've actually should probably call it a trustless setup ceremony because again we've got a ton of people so in practice you would not do this step you would download the parameters from the blockchain and they would use those parameters so rather than generating your own setup

you would take the parameters that have already been set up okay so then right so in practice when you're running when you're running if you're relying on the Paleo and if you go down actually scroll down yeah so you see the the biggest part is the setup right and so in practice that actually wouldn't that wouldn't take very long it would take no time because you would already have that information okay so then now you have the proving so this is where you're taking the parameters degenerated the setup the r1cs you're generating the proving key and you're outputting is your knowledge proof and then the verification is like in again in practice you would not do this but the nodes on the chat on chain would do this they would verify the proof and make sure it was valid include the transaction on chain and update

State and you actually see here the registers since you clicked on Main dot out on top that that's the result of your program right so okay so this is the this is the result and so basically when I look at this I see this is the result and I see that the proof of salad and so I I can trust that this is the result that um exactly that I was expecting from the problem exactly exactly now it's a little again this is like because it's a toy example you have to kind of like you're like okay what you have to think back and like okay what what's the question that I'm asking that this would matter like actually that like programming in ZK is kind of interesting because the Paradigm is kind of different um have you ever read Hitchhiker's Guide to the Galaxy I don't know if you've

read that book but no I haven't the famous science fiction book I think I watched this movie at some point but there's a little anecdote where it's like you know there's like the super computer that like what's the answer to like the all the world's problems or something and it just get like one point spits out an answer 39 and then everyone's like all right gets out of these three I think it's 43. 42 yeah 42. thank you yeah anyway but anyway then everyone's like well what was the question and that's kind of like how ZK is you're like here's the proof in the number and you're like okay well what's the question so it's it's kind of an interesting way as a developer you have to think about it you're like okay what do I want the user to be able to show to

prove a question true anyway but this is Leo and uh and again in addition to writing programs in this high level form you can also write in the a Leo instructions directly in the same way that some people write Yule uh instead of uh evm or they write evm byte code like kind of specifically to make things more optimal and uh yeah and I can share some more resources about that if you're curious or your listeners are curious no I mean this is really cool I think like what this you know for for someone like me who's like a you know low-level programmer like with some programming use with these are the like experience um I mean look at this say okay like this is how uh you know basically understanding how this works at a basic

level and then like you know if I want to dive deeper I've got like the developer resources Etc but like it you know with with some basic programming knowledge you can write a zero knowledge uh proof and you can write a zero knowledge application without having to understand you know some of the more lower level um languages and like writing circuits Etc um so I think that's really cool um yeah maybe also I'd like to talk about this package manager so it this kind of feels like an npm like um uh service can can you talk about what this is for and you know what types of things we'll we'll find here yeah so this is something that I I really think

is cool about Elio that not a lot of other smart contract languages uh or or blockchains have which almost every other programming language has right so you mentioned npm a second ago when what is npm for those who maybe are not as technical npm stands for node package manager and it's if it's a package manager in the sense that someone else like Seb can you can write some code let's say what's you know how do I efficiently Square two numbers and then you can publish that as a package on npm and then I can use that import it very in a single line and and you see up here yeah leoad so this is like the syntax for adding a package um

or for installing a package and you have the import import line down there in the usage and it shows you how to like import the thing um anyway the point is is like you someone else can write some logic you can use that logic without to copy and paste it and it seems like again for people who've been programming for a while that's like the obvious thing that that should exist in every basically language ecosystem you know rust C JavaScript every language that I know of has a package manager typically associated with the ecosystem but in blockchains we actually don't have this like ethereum for example um you know what's the uh safe math is um you have you have a a library that everyone uses which is basically ensures that you're you're in it you know your

integer arithmetic doesn't underflow or overflow but that the way that's imported is control C control V like and yes that's that's so this is like a nice ergonomic feature that we think is both better for developer experience but also for security because believe it or not people have screwed up the control C control V exercise in ethereum and cost themselves millions of dollars um yeah I mean in fact like ethereum has a ton of packages that everybody uses like the open Zeppelin contracts or exactly um I don't know hypnosis safe or like yes you know safe math or whatever uh but but there is not like a canonical way to streamline adding those into your contract or at least I mean I I don't

write solidity and I'm like not writing smart contracts like that but uh yeah I mean it's not it's not obvious that there's like a streamlined way to do that um this this is yeah this is super well yeah and this is and this also makes you want to go write some code yeah and it also it's open this up the door for like because one thing's this cool about this is typically you have these packages and these ecosystems which are widely used but there's really no way for the developer that wrote them to capture value but you can imagine a world in which you as the developer can basically add into this package like some some mechanism to tip yourself right some amount and then you this is a way to sustainably fund like these these projects which are or like these libraries which are really really

important to it to an ecosystem which doesn't exist right if you think of uh I don't know I'm trying to think of like anything like Serta in uh in Rust right that's like this package everyone uses to serialize and deserialize things in a different formats like the developers who wrote that get nothing effectively from every time that's used but in the world of elio because it's on chain there's this financial component you could imagine a world where microtransactions are are paying developers some fee stream for writing these cool libraries that's cool um yeah there's another topic that I wanted to touch on here which is um you know the the current regulatory environment uh so yeah I spent some time in the regulatory world I I I I was

comments director at basically the French crypto lobbying organization that did a lot of work on on Mika and and the EU regulatory uh package uh but you know recently and a couple last couple weeks we had this news that uh training their cash uh contracts were effectively uh sanctioned and there's been some arrests and I think the full you know the full consequence of that decision is not I think we haven't really seen the full consequences of what this means for the industry uh but there's I think it's definitely like a feeling that um at least the the US uh

apparatus regulatory like or oversight apparatus um is is at war with like privacy in crypto um you know for for the reasons that they put forth right which is that like this stuff is being used for money laundering Etc um I I can't help but you know think about Mark Miller's story like you know Mark Miller who you know is like a long time cryptographer and um like cyberpunk and he like now works with agorik you know he came on epicenter and he told the story of like how they used to print the RSA algorithms on their on their t-shirts called a munition right yeah exactly and

so I I can't help but like sort of think of that story when I see guys like singing the tornado cash code on Twitter uh but yeah so like what are the steps that you guys are taking to keep your team out of jail like you know how do you you know how do you wake up in the morning and think like after after this news uh falls upon the ecosystem and think like we want to keep doing what we're doing yeah so um it's a fascinating case right um and look I told you already that I'm someone who believes in not just this technology but the principles that

underpin it because I've I've been places in the world where those are not withheld or protected um but I think that's like let me start with by saying a couple things um first of all I think there's facts of the case that not everyone is aware of so I think you know it's easy to jump to the conclusion that the US government is at war with privacy but I don't know again we there there may be facts of this case that are relevant that we don't know I think one thing that's that is more or less known is that you know it is true that North Korean hackers oh well it's it's alleged that North Korean hackers use that to launder money from the Ronin Bridge hack right so I think there's a there's a legitimate question of I think you have to separate two questions so one is like

what is tornado cash or similar projects good for and then two is what were they actually used for and I think that's I think most likely the reason why that project was targeted because there's a lot of privacy projects I mean look there's we mentioned it like Z cash or Monero right these these projects facilitate private payments as well they were not targeted tornado cash was targeted so there may be facts of this case that we're not aware of and so I don't want to necessarily say yet that the US government is worth privacy because I think there actually is very good reason why in a payment system of the future you would want privacy like we've you know just think about how banking works today like I don't I mean

sure the bank can access my account information if subpoenaed by the government and by the way you can do that same thing in this zero knowledge cryptography domain like every every user of every transaction has a view key which they can use okay hey if the law enforcement shows up and asks me they can they have the ability to decrypt and show what there is so that's that's possible to replicate in the CK domain but I think if you have an economy where everything is transparent like that doesn't work right like if you and me are suppliers or if I'm sorry if I'm a vendor of you and you know you look at you it's like you're Walmart right and you're by you know you're buying plastic toys for me right and you're maybe bidding with a couple other vendors like how are we going to have

how are you going to protect business interests and secrets in a world in which everything is transparent on chain you need some level of privacy in the real Financial world that's why if I send you a bank wire I don't just get to see your account right like it's actually the the level of transparency in blockchains is insanely hi even relative to like the way the internet works like where it's like you're kind of emitting data all the time um yeah it's like privacy by obscurity you know yeah yeah barely right because I mean as as we've seen I mean look trm Labs was of course like one of the you you know the businesses that the government work with to identify and and help prosecute this or well help build the case against tornado cash right and the reality is like it's trivial if you

know what you're doing to I to de-anonymize everybody on a blockchain like a theory right uh and this is how I mean even six years ago or five six seven I could wear Ross Albrecht who's running Silk Road I mean he got caught this way um and look I think there's reasons from like a practical for there's many practical reasons why privacy is important there's many national security reasons why privacy is important and so I think the government has a more nuanced view on this than people than people give it credit for but also I think it's important from it from a platform so taking the perspective of someone building a platform for private applications I think the onus is on us and on other members of the space that are building this to to demonstrate and prove that there are use cases for this

and these are real use cases that I think everyone would agree upon but but to prove that these in practice there are use cases that are not criminal in nature right I think again my impression is that the majority of use of tornado cash at least from the perspective of the US government was illicit right and so then it's a question of balancing okay do we let this keep going or do we preserve the principle that we maybe agree with but you know just the the disparity between these two things is too high so I think it's really important for us to make sure we build things such that people can choose can build things that are compliant and I think because that's that's something that tornado cash really

didn't do right there's no way to prove compliance in that world right and whereas in our case like let's just take an example of an Elio program you can imagine a like a erc20 equivalent let's call it an arc 20. um and you can imagine a stable coin like uh ustc in in the a Leo model and you can actually encode like whatever logic you want about compliance let's just take the simple one that usdc does where there's a blacklist and ofac you know it says ofac maintains The Blacklist says all these addresses are associated with bad people or things you cannot transact with them right and you can you can encode that into the a Leo program and so when I generate the proof that says I'm sending

Seb money I'm also attesting to the fact that his address is not on this list right and that and therefore and that that's that's critical for a couple reasons one like yes it lets you prove that you're compliant and therefore you can have a system that that works in that in a regulatory regime but two it saves an enormous amount of resources for Regulators like yeah this is also true for you know regular vanilla smart contracts as well like this is true I think an argument that you can make about like an ethereum smart contract too smart contracts are not private right and so you have to give everything up of transparency yeah go ahead but but I I think this is an argument that a lot of us in the space have been making for some time like you know my in my

previous company we were making this argument you know back in 2015 or whatever um seeing how the regulatory environment and I'm more a more privileged like how the regulatory environment is evolving in Europe less so I guess in the in the US but in Europe there is definitely I think a sentiment from the crypto community and you know with some with some level of um uh of you know like certainty that the that the European regulator for apparatus really it's going like doesn't want to have um any sort of privacy in crypto and you

know the prime example of that is that I haven't read the last version of Mika but in previous versions and drafts that were made public um things like Marrero and Z cash were uh to be outside of the regulatory scope uh I believe and um as far as as far as things like you know cbdc's and other sorts of like State currencies are concerned uh I believe there's also a you know an intention there to have those things be um you know auditable by the state where the state would have some sort of uh uh or like you know the state would have some sort of a way to um to to to have like a like a a view key effectively uh

which is novel right compared to compared to say cash or something like that so yeah yeah so with a Leo you can build both right you can build a cbdc that has a like that basically gives the state superpowers to view everything that's possible you can build a private payment Network or someone like a closer yeah maybe not desirable you could build a payment Network at C centralized like Z cash you can do both right I think that's the key thing and that's what I mean it's just like the internet right like the internet like HTTP and like you know TCP these Technologies are just it's just ideas basically that then gets implemented in the real world can be used for good or bad things right and and that's why I view like what we need

to be focused on is building tools that people can use and and we need to show that these tools have legitimate use cases because they do because again I really believe that even from the perspective of the state they do not want this to be I think they maybe think they want but I think that's in some cases they think they want but I think that's because they're not as educated on what this technology could potentially do and as they become more educated about what this this technology can do they are going to want something like frankly the model of a Leo or just zero knowledge in general where it's like I can prove I'm compliant I can prove a b and c but I don't have to like you don't need to know what it is unless there's like a some subpoena thing that's okay here's a view key that's

exactly how the world Works already today to go to a model of like usdc is insane like it's invasive even from like the Chinese government's policies like it's crazy like so I think that's that's the key thing and I think governments are going to realize this I think it's just it it's a matter of education at least that's my view what's the what's the link to say The Interchange here like what's the are are we gonna are we gonna be able to um do we can we expect Elio to be you know IBC compatible and um like how how have you guys fit in the in the broader ecosystem of The Interchange yeah so let

me first say let me first start by saying that like just for everyone's PSA Elio is not live so a Leo we've just launched our third test net and right yeah we're aiming for kind of into this year early next year for a mainnet launch um so this all this is theoretical and I'm saying this because the you know like any blockchain that's in development things are getting tweaked and like whether something is going to be compatible or not I can't really comment on because that engineering roadmap is evolving a little bit that said Elio does very much consider itself to be or we consider Elio to be uh or we hope that it is kind of this settlement layer that can connect to a bunch of different ecosystems and I think in particular we've had conversations with the folks XLR to be able to access and

be part of like the cosmos ecosystem and I think one of the cool things about having a blockchain that's built around zero knowledge produces that it's very easy to have like clients or to have bridges that are more secure than your typical Bridge which is just a multi-sig here you know the like client effectively that's implemented on the other end of a blockchain can ingest State and verify the verify a proof about the current state of The Ledger whereas in in the traditional blockchain world you just kind of have to take the oracle's word for it um that the current state that you got is valid um so I think this a Leo is a tool for more secure bridging and I we hope that even Beyond a Leo people take this technique of just this zero knowledge cryptography and apply it towards both like clients and bridges because I think

there's a lot of security benefits in fact we've already been in conversations and besides cycle vaccine but also we've talked a bit with Solana about potentially implementing a newer version of their Wormhole bridge and we've done some preliminary work on that and in general we see a Leo as a like I said a settlement layer that fits in between other members of the ecosystem Okay cool so so potentially there could be like an IBC like client implementation that would allow you to move um exactly so the way you would do it yeah so probably I guess like you know again I think the way that I'm current currently contemplating it is like the axolar right so it's like because axlr

kind of does this in the IBC ecosystem so we implemented it yeah my client which I guess is an IBC like client on a Leo and then axar implements the aliolite client funds can go to and from and then from maxillar things can go anywhere and then and then you can use it actually you can use Elio as like a tornado attack yeah I mean or or for many other things that required privacy right so like yeah it can be it could be many things to many people and uh again it just comes down to the fact it's a tool that you can use but I think what private settlement is going to be critical if and this is maybe like a personal feeling like if we want this I mean you said you've been in the space a long time I have to like I'm sure many of your

listeners have like if we like we're still at the cusp of actual adoption I think people maybe sometimes mistake how far we are in crypto right like yeah in terms of Real World Adoption we've it's the beginning of the beginning of the beginning oh yeah absolutely like scratching the surface exactly despite all the money that's coming into the space and in order to gain Real World Adoption we need to provide real utility and again I think the utility comes from the fact that this is a better method of financial settlement but in financial settlement I think people have expectations about what is private what is not private and so I think to me this is a real it's a precondition uh to have the option to do things privately

financially uh to have this actually grow and and support an ecosystem of actual or a real economy rather um so that's my view cool so what's the road map you just mentioned that you're on your I think um you guys are on the third test net um what's the road map to mainnet and how can people get involved yeah so it's a perfect time to get involved so this is just launching our third test net and this is you know I guess I'll just probably people probably already know this but building blockchains is complicated especially zero knowledge one so it's taken a couple iterations to get it to where we're happy with it um but this one is plans to be the final

test net before our mainnet launch which again is contemplated at the end of this year early next have you had incentivized testing already we had one incentivized testnet we learned a lot of things during that incentivized test and that that motivated the design of this test that which is by the way anyone building a blockchain I highly recommend doing incentivized test Nets because you will learn things that you did not expect anytime anytime you dangle economic incentives people do things and actually in fact our last test net uh was proof of work we were using a proof of work based consensus model and frankly we faced a lot of challenges with that uh I can get into this I'm curious but we actually because of that experience we transitioned to a proof of stake model uh now there is a work component and this is one way that people can get

involved because one of my criticisms with proof of stake is that you kind of encode the ownership like the cap table quote unquote at the beginning because theoretically everyone's just incentivized to State what they have and then they just kind of continue to accumulate and they keep their relative position the same and I think one of the cool things about the way ethereum is doing its proof of stake is they started proof of work and it's kind of got very wide distribution and now they're going proof of stake and so this this to me implies will be a more decentralized system and so what we have in our system is we have this proof it's proof of State consensus so blocks are produced by validators and transactions are verified by validators but the coinbase transaction the way new money comes into the system is split between validators the

construct box and provers and this concept of provers we have is like you can do it's kind of like a proof of work puzzle but you can compete with other provers and potentially earn a share of the coinbase transaction and we wanted to keep this for two reasons one it ensures that the distribution of the token is going outside of the initial owners and it's continuing to like distribute uh these tokens in a way that hopefully will make the validator set more more kind of equal but also we want like I mentioned a couple times the zero knowledge cryptography is a pretty new thing it's only become practical recently one of the things that's going to make it mainstream is specialized hardware and there needs to be an incentive for Hardware developers to put this Hardware inside of phones

laptops servers you name it and this is like one of the things actually if you look at the development of the internet there's a really key Milestone so I I'm old enough I don't know I don't know how old VR said but maybe you're old enough to remember a time when https was not the universal standard everywhere like I remember when you opened it was like 10 years ago yeah yeah exactly it was like but there was like a noticeable difference when you were paying with a credit card card page like it took much noticeably longer and that's because the encryption that you're using as part of that like TLS which is what https basically implements like that in real world time took seconds now since the reason that it does you don't see that anymore is because Intel baked in a set of instructions specifically for that

encryption inside of all Hardware which took the real world time down to nothing with ZK that potential is also there so that's why we have this incentive for provers to earn money from the protocol so that then they can invest in better faster Hardware to do proofs more efficiently more cheaply more quickly and that benefits everyone so um so anyway so okay so you can buy so you can participate as approver potentially earn credits again this is Tesla three's incentivized see these these credits you know you can earn will transfer to mainnet you can be a validator um and you can help produce construct blocks and again you'll be earning part of the coinbase reward there you can be a developer right so you can write Leo programs deploy them on chain and

interact with programs and that's part of the incentivization scheme as well and lastly you can be a hacker which is like you can find find bugs in our consensus protocol and hopefully tell us about them and we will pay you for things uh and yeah hopefully break things and you know we have a relatively large amount of credit set aside for people that break things I guess just quickly it's just for people's nomenclature so we we call the native unit of value in our Network a Leo credits um kind of modeled on AWS credits because that's that's kind of how we see it like what you're what an alio credit represents fundamentally is a unit of a ZK compute very cool uh well I I think that that about covers uh a lot of it um and uh yeah I think like definitely

we at interop would uh would be keen on yeah maybe writing some validators getting involved somehow um cool and yeah when's the mainnet launch yeah so Tesla 3 just started and we're kind of rolling out features over the next couple months and mainnet we're aimed for end of the year early next year for our launch cool yeah well uh the people should definitely check out the website Elio dot org yep Leo Dash Lang dot org for the IDE that said you you uh you demoed a minute ago yeah cool all right thanks uh thanks a lot Alex hey this is a lot of fun thanks a lot for having me on the show

don't worry