Findora’s layer 1 protocol prioritizes privacy with zero knowledge proofs

0:01i'm ashton anderson from block west capital for investment pitch media in the crypto coin show and today on blockchain interviews we have warren paul anderson the vp of product at discrete labs the team behind fendora warren welcome to the show and thank you for taking the time to come on thanks a lot for having me ashton excited to be here yeah i'm excited to dive into this

0:22discussion i first spoke with fendora over a year ago and i know your team has been working on quite a lot uh in the year a year and a half really uh since we last spoke i would love to get the viewers up to speed by just getting an overview and a high level solutions of what findor is working on and what the team at discrete labs is focused on with

0:43fendora yeah sure so uh fendora is you know layer one blockchain with uh programmable privacy uh one of the teams that's working on is discrete labs discrete labs has actually grown to over 60 people based in both north america and asia and street labs kind of maintains a lot of the the code base related to to fendora using the programmable privacy and and

1:10how we use programmable privacy we probably get into it a little bit but we basically use a few different technologies one called zero knowledge proofs and the other called multi-party computation and these are kind of fringe technologies that have found their way into the blockchain space we anticipate them being used a lot more to do things like uh you know preserve

1:32privacy for users definitely and yeah i have heard of both of those but most of the time you know people just hear zero knowledge proofs and they just think okay zero knowledge like it must be good you know i don't really know about the the intricacies of and and sometimes you don't need to know exactly how but it's great to get uh you know sort of a high level i would love you

1:54know if you could talk a little bit about the problems in in blockchain right now and in preserving privacy and identity management in why technologies like zero knowledge proofs and secure mpc are needed you know in the way that blockchain is currently run uh is people are are people's information really vulnerable to uh hackers and and just public blockchain information or

2:20like why is that technology necessary to bring in with fendora yeah something we've identified you know some privacy issues in the blockchain space but also they kind of applied to you know all of uh uh the digital economy that's growing um you know and uh there's three particular problems in blockchain one was a user privacy problem so we're seeing you know

2:44lots and lots of uh you know these transactions are that are on uh some of these blockchains are actually they're not anonymous they're actually semi-anonymous and what they call studio anonymous and they're becoming less anonymous you know as as time goes on so as people uh you know create more exchange accounts they leave their identity information

3:07through a process called kyc or know your customer that's effectively like putting a fingerprint on the blockchain right the more times they do that the more fingerprints they leave so uh and and that's okay if you know that information is in the hands of the right people but it's not okay if it gets in the hands of the wrong people so definitely there's

3:28going to be uh continued user privacy issues because these transactions are radically transparent another one is actually more along the lines of a liquidity issue so you know because these uh transactions are so uh transparent uh what we're seeing is a lot of the institutional capital that's uh you know sitting on wall street we're talking

3:54in the order of you know trillions of dollars uh you know that's just trading you know throughout the day is actually kind of sitting on the sidelines because they want to enter into this space but they don't want to reveal the you know competitive intelligence that uh that you know they protect uh by by banking you know with uh regular you know traditional financial institutions um

4:19it's not great that a competitor you know knows your bank balance or knows your your crypto balance right and everyone knows you know that tesla bought 1.5 billion dollars for the bitcoin but everyone's also going to know when tesla sells 1.5 billion dollars worth of bitcoin so you know with transparency comes you know concerns around privacy and in actual competitive intelligence

4:43that that gets revealed so those are those are two really big problems that that we found um and they're not going to get any better as as you know crypto becomes more mainstream these problems become you know more ubiquitous and uh so really we wanted to build something you know using zero knowledge proofs that we could actually help preserve the privacy without uh you know

5:06uh reducing the actual integrity of the core blockchain mm-hmm definitely and yeah it's it's funny how you know retail investors they just they're not so concerned about uh you know they're more concerned about you know what price that i buy bitcoin at and then when large institutions come in uh with trillions of dollars there's so many more variables of like you know

5:28who's gonna know when we bought this what what at what time should we buy it where should we move the money from where should we store it and with fully decentralized public blockchains you know that can all be seen if uh they see the transaction of where they bought it and then you can see their balance and if they move it uh you know there's all these whale alert platforms and tracking

5:48for blockchain explorers you can easily see if tesla starts moving that money before they put out a press release you know the second it happens you can get a notification um so obviously there are uh some things needed for these large institutions and just for general privacy as well um to be able to you know sort of protect some of that information and you mentioned their zero

6:09knowledge proofs can you talk a little bit about you know what exactly does zero knowledge proofs do and if you are a large institution that's gonna make a big purchase or try to hide information how exactly does zero knowledge proofs help with that yeah sure so zero knowledge proofs are something that were invented actually several decades ago it's a cryptographic

6:32method that allows you to effectively share information without actually showing it and so we call it kind of sharing without showing and concretely what that means is you know if i wanted to prove to you that i was um you know over the age of 21. typically in the real world i'd have to just show you my id and you look at my id but then you also see where i live

7:00you see um you know my all the other information that's on that id that isn't relevant to my age right and um with the zero knowledge proof actually what i can do is is just show you a proof that uh that i'm actually over 21 or over and and you can compute that proof verify that proof and then we know that that's that's a that's a that's a legitimate statement that that i'm over

7:2521. and what's nice about that is that i actually don't have to reveal my actual age i only have to reveal that i'm over 21. so uh that kind of process you know applied to lots of different use cases in financial technology especially is becoming you know really really useful so they're being used now uh to to do a lot of um uh scalability you know on different

7:52networks by you basically they're compressing a lot of the the blockchain data into a very succinct form and being able to show a proof that that this is valid and then you can kind of uh uh verify the the the actual information from from that proof um but we're also you know we're uh discrete labs is using uh zero knowledge proofs particularly for privacy so being

8:17able to to use that same kind of technology to prove that these transactions are actually happening without actually revealing them very cool and and i know we spoke you know quite a while ago but i believe the platform is already in development can you talk about when fendora started uh what you've been working on and where you're at right now yeah sure so i joined the team in

8:42mid-march um we were uh right then we were about to to launch uh or call mainnet beta which we did at the end of march um and the the phase uh right now is is the the the uh the network is in is a mainnet beta which were basically it's a a stripped-down version of um you know of an existing you know network uh it has very simple uh transaction types being able to send and

9:11receive the native token fra uh both confidentially and you know transparently um and then also you can issue tokens similar like how you would on ethereum uh and create tokens actually both confidentially and transparently so that's a pretty interesting kind of uh use case because that would allow for something like stable coins and private stable coins to be issued on fendora

9:38um and other types of assets so uh that's kind of the basis right now of of what uh the fendora main net looks like we have a couple weeks ago a couple months ago we released um proof of stake staking on test net so it's running uh you know the fully you know staking with delegation because fedora actually runs the tendermint consensus so

10:06we're able to inherit a lot of the robustness of the tenor tendermint consensus mechanism uh to allow for proof of stake so on test that we're running uh staking we expect to you know push that into mainnet in the next next couple months and then we are about to roll out actually another kind of developer network that is going to have essentially the the the latest kind

10:30of beta releases coming out that will be deployed on both testnet and mainnet wow very cool and it's great to hear that you can also create an ecosystem inside of fendora create you know native assets that have that privacy preserving structure as well that's really interesting and i'm excited to see how that plays out i think the developer ecosystem is going

10:52to be a great addition and something that's needed to help bring more people in to help develop on your platform because there's so many protocols coming out with different uh developer developer environments and really it's about making it easy for developers to to start working on fendora i'm curious you know you have this full ecosystem uh with fandura and the

11:16ability to create tokens uh but i'm guessing that you know i've spoken to the tendermint cosmos team and i know they're all about like the inner blockchain communication and working with other blockchains if the if an institution is trying to buy bitcoin or ethereum or something that's not related uh to the fendora layer one protocol specifically does the

11:38technology privacy preserving does that apply to you know any kind of transactions outside of pandora as well it's a really good question so uh the the vision is yes we want to apply uh you know fendora's journal knowledge proof uh kind of privacy preserving technology to other blockchains uh and that's really kind of the pillar that we're standing on with interoperability

12:03being able to do cross-chain uh interoperability but the the vision is you know uh the execution is much more difficult than the vision right because a lot of these uh these networks uh the fedora blockchain is a utxo based blockchain which is lends itself better to uh to preserving privacy because there's it's effectively a stateless you know blockchain there's no

12:28actual state that's being stored so you can actually you know uh wrap that into a privacy preserving protocol uh most of the other you know networks are becoming you know more and more stateful so ethereum is an account based you know network so uh bringing privacy to ethereum is actually quite a a challenge uh but we're going to be releasing some things on to the

12:52developer network you know here in the next couple um couple weeks that will actually lend itself kind of down that path because we think that uh preserving privacy you know on fedora first is obviously kind of the first staple and then the next is is starting to introduce that into other networks but it's a step-by-step process it's going to involve a lot of uh

13:13critical work on uh you know our cryptographers uh you know actually writing you know and implementing uh different zero knowledge proofs for more complex statements and uh and figuring out some breakthroughs on that field definitely yeah uh a big work in progress and i know i can imagine that the fendora ecosystem itself is already a huge task to take on in developing the

13:39developer ecosystem building out the uh a token infrastructure to build tokens on top um i'm also curious more about the fra native token that you briefly mentioned so far you mentioned that you can do staking i'm curious on what else you can do with the fendora token and how it plays a role into the ecosystem in the protocol yes just like most networks you know

14:05fendora has a native token called fra it's primarily used to you know as gas to pay fees um it can also be used as the native token to to do asset transfer um uh but what's kind of unique about fendora among the other kind of privacy uh blockchains is that you can actually issue uh private tokens so um you mentioned before you know that there's twitter

14:31bots like every time there's a movement of funds uh when it applies to uh stable coins for instance like tether or usdc the same rule applies uh every time more tether is minted uh uh some twitter bot you know publishes how much that that that is uh and that's because you know the balances are radically transparent tether but uh i think most people would prefer

14:57that their wallet balance in in fiat currency or stable coin isn't revealed uh so we expect to see more and more stable coins uh start to seek out you know these privacy blockchains to be able to issue you know tokens and maintain a balance in a confidential way so that they're protecting users privacy uh so that's one of the unique properties of fendora as it relates to

15:23some of the other privacy blockchains very cool and you mentioned that the full main nets coming up uh the mainnet beta is out can you talk about what are the major next steps that you and your team are focused on uh towards the release of the main net and just towards the really uh the end of the year yeah sure uh so the next few weeks we expect uh you know

15:46um the test net to reach uh sufficient stability you know for the community to adopt on mainnet which will include staking and delegation um there's a whole tokenomics model that's you know been applied to uh generate apy for stakers uh and delegators which will help kind of you know build more of the ecosystem around um you know around staking uh also you know we're

16:15gonna be introducing more programmability into into the the network um i won't say exactly which networks we're going to be uh integrating into first uh but we'll just say they're they're the bigger ones um and uh we expect to kind of have that kick off more of the cross-chain kind of compatibility interoperability uh of of different assets so that we can start to build

16:43liquidity bridges you know into those networks um with a follow-up to eventually introduce privacy to those networks great to hear warren and for the viewers that are looking to follow along with the release of the mainnet learn more about fendora fra and get involved in the community what's the best way for them to get involved uh probably the best access points just

17:07pandora.org uh there's a lot of information you know the teams are constantly updating you know the the site to to make sure it has the most relevant information um and then you know we're on twitter with the fendora official uh so catch us there obviously lots of telegrams and then our discord channel is growing you know pretty considerably if you're a

17:26developer you want to get involved in the project sounds great warren i will leave all those links in the description box below as well all the best on fendora moving forward and let's follow up in the near future thanks a lot ashton you