Oliver Gale on privacy solutions and zero knowledge proofs at Panther Protocol

0:01i'm ashamed anderson from block west capital for investment pitch media and the crypto coin show and today on blockchain interviews we have oliver gail the ceo of panther protocol oliver welcome to the show great to see you again and i'm really excited for this discussion into the d5 world thanks ashton it's a real pleasure to be here again thank you for having me

0:23you're very welcome it's been a while since uh we last spoke and so much has happened in d5 throughout 2021 and it is a really exciting time i'm really excited to dive into what panther is working on which i think is really needed in the d5 space as it continues to explode with the amount of value being locked in and the growth and interest from institutional investors

0:48can you kick us off with just an overview of panther protocol and some of the solutions you're looking to bring into the d5 space yeah sure so panther can be described as a meta protocol it is a protocol that can be deployed on multiple smart contract uh blockchains public blockchains and the problem that we're addressing at the core is one of transactional

1:12privacy transactional sovereignty surveillance resistance there are a number of different ways to say and there are enough a number of different reasons for wanting the properties of privacy not least of which is the protection of alpha and negotiating rights for individuals and institutions so uh by alpha what i mean is a competitive advantage it might be an

1:36information edge when you're trading with a d5 protocol as an individual or as an institution uh and then of course underpinning the entire protocol is this idea that and really that this very idea is what underpins the cypherpunk manifesto which is that a fundamental building block of democracy is privacy and so we as a protocol as a community are

2:04building solutions for public blockchains to enable any user to transact privately in a dpf environment that's incredible and it's definitely needed i've seen a lot of software where because these transactions are on public blockchains you can essentially once you know the wallet address of a whale or some institution you can follow their every move and see

2:30what they're doing and and you know get insider information like that so it really doesn't have a lot of privacy right now and i was looking into the details of these privacy solutions and i saw that you're integrating zero knowledge proofs uh with d5 can you talk about that technology and and why that's the specific solution needed uh to integrate with panther sure zero knowledge proofs

2:56are a form of cryptography which have already begun to but which we see as being a technology which continues to transform the very fabric of the entire financial infrastructure but in addition to that it's going to transform the relationship that we have with enterprises with governments with each other around data what is zero knowledge proof is essentially it's

3:21proof that a certain condition has been met that approver can submit to a counterparty the counterpart is the verifier and the verifier can validate this state uh has been met without the prover having to disclose any of the underlying information and so there's a zero knowledge disclosure that's made to the verifier by the prover now in simple terms this could

3:49apply to the finance use case to something like uh your identification or verification process here is proof that i'm over 18. here's proof that i'm not on a sanctions list here's proof that my transactions have not triggered any flags for suspicious activity report and those proofs can be submitted to the verifier without the verifier needing to actually

4:15cast it in the underlying data and see it and this preserves the privacy of the actor and it also dramatically reduces the cost of in this case something like compliance because one of the major costs around things like financial compliance is the cyber security costs of storage and maintenance of records and so if you look on the global spectrum of where we are

4:42with open banking frameworks the european union and their psd2 standards are ahead in many ways of u.s and american standards generally north central south american standards and so the more modern regulatory framework allows one financial institution that has verified a user to pass the kyc information or proof of that verification over to another

5:10institution without the other institution having to redo all of the onboarding process a redoing the process has a huge amount of costs and it also undermines your data privacy because you're sharing your passport information to every single exchange and every single vendor bank institution now i'm using the context of financial services but zero knowledge proofs and this data

5:33storage and replication problem exists in health care it exists in this sort of bio any sort of big data set and economy credit scoring and underwriting and so forth insurance and so the equifaxes that we've seen take place in the past with massive hacks and data breaches these are also part of the privacy problem and panther is as a protocol

6:02is building a decentralized uh solution governed by the community and its dow to enable users to transact privately with defining smart contracts and with each other using zero knowledge proofs and at the same time we recognize there are massive challenges in the compliance and data management storage and transportation

6:29layer and we're using zero knowledge proofs through a a layer of the protocol that we call metastrate to allow an individual to go to a trust provider get a proof of state such as i'm over 18 and not on the sanction in this country and my id is valid and submit that proof to a counterparty and so that's what i'll call that the long game that's the

6:56future of of privacy and compliance and data sharing and information one where users have sovereignty of their information but can prove state and have counterparties verify that state yeah i think it's incredibly valuable oliver as as you mentioned you know the equifax hack and even just in uh finance and in cryptocurrency

7:23giving out your information to other parties or giving away your passport and not having that security behind it if there's any hacks which there are quite often in in the space then your information is now out there in in the web and who knows who may get access to it so i think that's very valuable uh on the zero knowledge proof side and it's not going to happen overnight

7:47but it is something that's completely necessary so that's really interesting and now on the transaction side on the privacy side as you mentioned doing transactions in d5 on public blockchains there's different blockchains but most of them you can just go ahead and look at transactions and see the balances see the history of the transactions right on

8:08the blockchain right there and that's something that obviously uh is crucial information if there's uh somebody that's trying to make a transaction private i was looking into panther and i saw that you're creating something called z assets or z assets um that i'm guessing have privacy ingrained in assets are those synthetic assets or maybe can explain more surrounding

8:32the privacy of the of the coins yeah of course so i'll use ethereum as the example because it's the first as we call them pair chains that panther is being built on so panther has a decentralized model but there's a habits full component to it where we're building panther extensions on pair chains like ethereum like solana like cardano and then we're building a

8:55private interchange dex to allow routing of transactions seamlessly across an interconnected d5 interoperable connected e5 ecosystem and so using ethereum and erc20 tokens as the first example what panther enables you to do is deposit say uh a die token or an each token to an on-chain for self-custodial default where the assets are uh

9:26securely held and custody by the protocol itself and then a corresponding one to one fully backed z asset so in this case would be z or is minted panther is rolling out on layer 2 using polygon in the first instance so it's actually a layer 2 vault and the z asset is issued on lit polygons layer 2 so your z or z die is now represented on this ledger and you have a zero knowledge

9:56proof of ownership and essentially represents a claim to the underlying ether diet and we've chosen this design as compared to other protocols which are tackling privacy because the you know sort of creating synthetic assets with it changes the fundamental properties of the corresponding derivative token or counterparty token what we are calling a c asset

10:22and exposing holders investors institutions retailers hotlines whatever it is to new sets of counterparty risk really confounds the value proposition of plant fit what panthers bring in to these assets is the additional property of privacy we're not trying to change the risk profile by you know and with synthetic assets force things like collateralization

10:50over collateralization requirements we're really saying today you use diet tomorrow you can use some diet today you use eats tomorrow you can use cds and so that's what the z asset type is and one of the beautiful properties about these the assets is that aside from the privacy between them users can actually clear and settle transactions on the layer 2

11:15in a very low cost fashion and so there's a network effect around joining the panther ecosystem and joining this the asset class and it's for that reason that we say that the asset will be an expanding asset class as people opt in for privacy but they stay for interoperability low latency no cost that's great and yeah i think that interoperability and settling on layer 2

11:42for no to low cost sounds amazing and so that's really interesting and with those z assets there's also the panther protocol token as well which is the zkp zero knowledge proof token i would love to know how that integrates onto that network uh what are the main functionalities that it's gonna provide for for the privacy d5 solutions yeah well good question a lot of thought

12:12and energy has gone into really assessing and understanding what successful utility tokens looked like in the defy space and so when we set out designing panther there were a couple of building blocks more than a couple that we chose one was to focus on governance another is the focus on composability a third is the focus on usability and the fourth is efficient privacy

12:37and so when it comes to usability we don't want to force users to hold zkp in addition to whatever asset is in their wallet that they want to transact with so the zkp token is not a gas token it is a utility token it's a utility token because it's required to stake on uh it's required for voting and there's incentivized vote in where you're economically rewarded

13:05for participating in the governance of the panther protocol so that's one use case two the zkp token is used for something called privacy mining which is the game theoretic mechanism for building the privacy set so to use an analogy if i have a zero knowledge proof that i'm in a coliseum and i'm the only person in the coliseum it's not a very useful proof there's no privacy there

13:28so you need to have people in your coliseum so to speak or in your panther pool uh as we call it uh in order to have the benefit of privacy and so privacy miners are rewarded in ckp for providing assets into the pool to build the anonymity set the zkp token is used to bond assets for the interchange decks so

13:56you know if you are familiar if the viewers are familiar with things like 4chan their requirements for bonding assets that secure a corresponding or proportional amount of assets held in an unchained vault so there's this bonding requirement where you're rewarded for bonding zkp against the collateral held by the interchain decks which will be a massive driver of lockups and value

14:23for the protocol and beyond that there's also now this meta straight layer which is the zero knowledge proof layer for proving and verifying arbitrary states around data and there is a rewards program providing those services now the dot itself which is in decentralized autonomous organization is going to be charging users for

14:52each of these services they're not charging as ekp but they'll be charging them in the native token and those fees will go into the treasury of the dow and the dow in turn then will purchase zkpt tokens off of the open market almost you can think of it a proxy in the private equity world will be a corporate share buyback right in any event what you have is an outflow to

15:17incentivize usage of the protocol and as the protocol treasury grows tokens are acquired on the open market by way of taxes and those go into reserves so as the protocol finds this equilibrium between incentivizing participation and generating uh fees which are then used to purchase be off of the market you'd find that you either have an inflationary

15:43or a deflationary economy and again in the principles of really because privacy is about freedom and sovereignty all of this is controlled by the token holders themselves so they can actually calibrate the economy themselves to be inflationary deflationary or in an equilibrium condition where in there will only ever be a billion ckp tokens so from that perspective

16:11it's a fixed cap uh token that can store value but from a utility perspective there'll be variations definitely thank you for that explanation oliver and yeah it's really interesting uh that and great that the community will be able to govern uh the future of the protocol uh through the dao as you continue to build that out i know that there's a lot

16:38to the protocol and that there's still more that your team's working on can you talk about how the community would get involved and how that transition into the dow and moving into full decentralization will happen in the future yeah certainly so i haven't spoken much about the team but you know this team is really impressive we collected we have over

17:0155 protocol protocols and either at the core architecture level or participated in the building of so there's a lot of credential over 50 years of cryptography experience as well and so this is something that we really understand how to tackle now there are multiple layers to the solution there's the technical solution and then there's the

17:29legal regulatory solution as well and what we call a path to decentralization so we spend a lot of time on that particularly because panther is a privacy protocol and the key objective for us is to decentralize the protocol on day one so we will be launching without functionality in october of this year after our public sale uh the mvp is a minimum viable product

17:58so it's not going to have all of the bells and whistles attached to it around things like calibration of ckp rewards versus inflows and so forth but there will be a level of governance there which allows the protocol to be fully decentralized and so our development studio which is responsible for delivering the contract to the panther foundation will launch that and then we have a road

18:26map over the next three to four years to continue to build new iterations of panther which will then be voted on by the community as launch proposals very cool and yeah you mentioned there the uh public launch and a date set around october as you work towards that uh what's the best way for the viewers to

18:53follow along and is there any other dates that they should know about as you lead towards the end of 2021 there are no dates which are key dates in my mind aside from the net launch which again is scheduled for october and the public sale this is a fast moving industry we're paying close attention talks with regulators constantly monitoring the situation

19:20as it pertains to what is now being called regfi and things like fatf guidelines and so forth so on that frontier we're moving forward on the best available information basis to say that we will launch in october with the mvp and we'll have a total sale sometime prior to that uh things do change quickly the viewers can

19:45join our community uh we are on telegram we have an open telegram channel our website's a protocol the io it's not announced yet but we recently bought panther.org so we'll be migrating to panther.org on twitter where zkp panther or zk panther and so those are the right channels to check us out we also have a discord as well which is increasingly becoming

20:12active so we would love you know to get to the point our main objective as the team building panther is to decentralize it foster community ownership and this is important it particularly in the case of a protocol like panther more so than many other protocols because panther is at the core defending rights to privacy the freedom and the sovereignty

20:38and those rights can only be defended as a decentralized community they're enshrined in some remark of the free world's constitutions but there are massive underminings of our freedoms through surveillance surveillance economies and so we see our work as being hugely important to maintenance of open fair free democratic societies and we can only maintain that freedom

21:07with the support and the decentralization of the project across the board so anyone who joins the community or sees our website wants to be part of our team whether it's directly or indirectly we encourage that there will be an incentivized test net which we launch as well so that's something to look out for definitely very well said and thank you for those community links oliver i will

21:32leave those as well in the description box below for the viewers uh all the best with everything your team is working on leading up to the main net i'm excited for these kind of solutions to be brought into the market because i do think they are much needed uh let's follow up in the near future uh closer to the mainnet launch and when your team is uh preparing for the token sale and

21:54yeah thank you so much for coming on the show today thank you very much once again for having me and i look forward to reconnecting the next day