Nothing to Hide: On-Chain Privacy in 2026

Ivor Jugo, Protofire · 00:00

Okay. Hi everyone. Nice to have you all here. So today we're going to have a great Protocol Roundtable between more than six participants from different projects in the space. So first of all, I'm Ivor from Protofire. I'll be your host today. And we have also Rado, who is also from Protofire. And today we're going to speak about one of the, I would say, most interesting topics in the space. So, privacy: where are we now in 2006 [2026] with privacy, how it looked like on different chains and with different projects, and where we are going from here. It's been quite of a buzzword, we can say, in the last couple of months. So let's see what the future brings us when it comes to privacy.

So we are going live on X and LinkedIn at the same time. So if any one of the listeners have some question, feel free to write into the chat, and we will see at the end if we have some time and answer the most interesting ones. So yeah, first of all, I would like to give the mic for our guest today. And maybe we can go by the order of the list here in the chat. And just quickly tell us your name, your project, and you can tell us the problem that you're solving in the privacy space in a sentence or two. Yeah, Brian. Yeah, you can take that. Be the first one.

Brian Butler, Polygon Labs · 01:25

Hey, yeah, first of all, thanks for inviting me. Happy to be here. Yeah, Brian Butler, I'm at Polygon Labs. I do partnerships over there, specifically in the United States. And I was formerly at Visa, where I was on the crypto team, helped scale stablecoin settlement from 50 million a year to 5 billion a year, and also helped with stablecoin-linked cards with the Bridges, Rains, Reaps of the world. And for, obviously, our blockchain at Polygon, we need to solve privacy, in the sense of, it's obviously a growing narrative. Institutions are getting into the space, and then for them to feel more comfortable, right? There needs to be compliance and privacy in place. So adding some type of technology on top of Polygon's existing chain to effectively toggle privacy on is essential. But happy to be here.

Ivor Jugo, Protofire · 02:08

Cool, thanks. Thanks, Brian. Luke, how about you?

Luke Bowman, Secret Network · 02:14

Awesome, yeah. So my name's Luke. I'm the COO at Secret Network. Secret Network is a layer one blockchain, and we're focused on confidential computing. We started as for Web3. We've since evolved over the last year and a half or so into AI as well. So we provide privacy-preserving smart contracts, interoperability between blockchains, and also confidential computing for AI inference and agentic flows.

Ivor Jugo, Protofire · 02:54

Great, thanks, Luke. Yeah, let's continue. Aztec.

Aztec Amaya, LitVM · 03:00

It's great to be here on this panel. I'm the CSO at Lunar Digital Assets. It's a full-stack blockchain venture studio. Also co-founder of LitVM. We're the first Litecoin layer two fully endorsed by Litecoin Foundation and Charlie Lee. Naturally, I'm a supporter of Litecoin's MimbleWimble Extension Block technology. Everyone calls it MWEB, for optional privacy. But I'm more of a privacy supporter, not directly building in privacy.

Ivor Jugo, Protofire · 03:35

Cool, but you have the most privacy name, as we just talked about. Thanks. Cool. Justin, Justin is one of our partners. Nice to have you here. Please.

Aztec Amaya, LitVM · 03:36

Good to be here.

Aztec Amaya, LitVM · 03:40

Yeah.

Justin Giudici, Telos · 03:48

Yeah, hey guys, nice to be here. Privacy is something that I'm really interested in and have been for many, many years. I'm one of the co-founders of Telos. We've been around for like eight years now. It's been a struggle over the years to get adoption. And one of the things that I believe is that privacy will bring that adoption. So yeah, it's really critical. So yeah, excited to be here and join in. We're actually launching our privacy layer tomorrow, so that's exciting.

Ivor Jugo, Protofire · 04:25

Great, great to hear. Darren, how about you?

Darren Gray, QuickSwap · 04:30

Hello, I'm Darren, Head of Ecosystem at QuickSwap. Really bad at intros. QuickSwap is a place that you can swap quickly. That's usually it. I'm more on the side of Aztec, where QuickSwap isn't necessarily building strictly in the privacy sector, more of a privacy advocate.

Ivor Jugo, Protofire · 04:53

Yeah, thanks. But it would be also great to hear from your point of view, as maybe more on the user side, how we see things are moving. And Joël, yes, please.

Joël Valenzuela, Dash · 05:04

Hey everyone, I'm Joël. I run business development and marketing for Dash, which is the oldest active cryptocurrency to have any kind of built-in privacy features. And what we're hopefully doing is bringing sovereign transactions, which of course includes privacy, to the masses, with a very easy user experience with usernames, contact lists, encrypted metadata for transactions, all at the protocol level. And we're doing a pretty massive privacy overhaul, incorporating Zcash's Orchard shielded technology within the next, hopefully, few weeks. And then after that, bringing it to tokens and assets as well. So hopefully we'll have an encrypted token ecosystem.

Ivor Jugo, Protofire · 05:48

Cool. Cool. Thank you, everyone. We're really looking forward for this one, especially when we hear from where all of you are coming from. So yeah, then let's start with the first topic. So let's open the discussion about what do you see as the strongest use case for privacy. So it would be nice to hear not only the story about surveillance or any kind of that type of solution, but more on a particular use cases where people and end users can get a real benefit by having privacy, maybe in some earnings or any type of other metric that we can estimate, in a sense that will make privacy make sense. So maybe, Luke, we mentioned that you have quite a bit of experience and a long years in the space. Maybe you can start with how you see it.

Luke Bowman, Secret Network · 06:46

Yeah, I mean, it's a great question. It's kind of, there's so many, to be honest. I really say it's more like this. We've always had the dream of tokenizing everything, bringing everything on chain, tokenizing the world. And that dream only becomes a reality when privacy is adopted and built into the foundations. There's just no way that the institutions actually bring all of their things, including strategies and assets, on chain without being able to protect it, without selective disclosure.

And so, I guess, if we want to focus in on one, I think everybody can think of the value of financial or transactional privacy, right? The ability to pay people. And you can take that into payroll. But one that's maybe a little more outside of the normal spectrum: we at Secret Network, we've recently, over the last year, we built out confidential computing for AI. So we call it Secret AI. But it essentially allows you to launch a full LLM model, an AI model, inside of an encrypted environment so that you can start using AI and protecting the sensitive data.

So you can actually make, for example, an enterprise use case. You can make a specialized trained model just for your company and feed it all of that sensitive data that you don't want to give to OpenAI or Google and have it leak out and start training other people's companies. You can just keep that for yourself and still gain the power of AI to start...

Luke Bowman, Secret Network · 08:48

scaling up your efficiency within your company and things of that nature. And you can also take that into the agentic workflows. So not just inference, but you can start allowing agents to start transacting in an end-to-end encrypted manner. So you can start seeing those on-chain payments take place without all of that, again, sensitive strategy being leaked to the world.

So I really love those use cases for privacy, especially right now as AI is blowing up. I see people launching OpenClaw agents everywhere, and they're giving all of their information, their calendars, their emails, and not just read access, but write access to their computers, like the root. And without protecting that, that's insane to me. So using something like Secret AI, there are others, it doesn't have to be ours, but using a privacy-preserving environment for it is the only kind of sane way to go, in my opinion. I won't be using OpenClaw without it. Either that or a local model. Definitely not web-based or cloud-based.

Ivor Jugo, Protofire · 10:04

Yeah.

Ivor Jugo, Protofire · 10:12

Definitely.

Luke Bowman, Secret Network · 10:14

But yeah, I'll stop there and pass it on.

Ivor Jugo, Protofire · 10:17

Now, AI is definitely one of the most interesting topics. And I think people are starting to think about privacy much more as we are speaking with different LLMs every day. So, anyone else on the same topic? The use cases that you see, the largest problems?

Joël Valenzuela, Dash · 10:31

Yeah. I'd be more than happy to chime in on this. Obviously the financial thing is the big one. No one uses payments without a minimum viable privacy in the rest of the space, they won't here. But for other things, when we're trying to think about Web3, for example, we're hopefully building a lot of web infrastructure and apps, et cetera, on fully public decentralized rails. The problem being the fully public part. And so there's a lot of use cases where you want something to be out there on a blockchain, accessible to the entire planet, anyone, without any permissioning, but then you don't want that to be completely just plain text for people.

And so, one very simple thing: we're debuting sort of a social media slash blog, et cetera, site that, for example, the blog function, we also have an encrypted side of things for a kind of, let's just assume, something like a Substack, right? Where you want to pay to subscribe, you have paid subscribers, and you don't want to necessarily just have it all out there for free and just hope that people will pay you. Sometimes you want to keep private content feeds for individual people.

Another thing, for example, with a store functionality: if you're communicating with the seller about, 'I received this,' 'What's your address?' If you want to send your shipping address to an e-commerce platform that runs on decentralized rails, and then the blockchain in plain text tells the whole world where you live, that's just not going to work. So we do need privacy for some of those things as well.

Ivor Jugo, Protofire · 12:14

Makes sense, yeah, thanks. And if we maybe try to think more about, in particular, the Web3 or maybe the DeFi space, as some of us, more on that part of the stack, what do you think, guys? Where, there, we see the largest use cases? Do we have, I don't know, any... Sure.

Aztec Amaya, LitVM · 12:32

Yeah, I could jump in there. Yeah, just some thoughts, high level: privacy is a fundamental human right. And what I'd love to see is, and what I think the only way it makes sense, I think Luke kind of touched on this as well, is that all these institutional players that are coming on board, I think it's Sergey Nazarov who says quadrillions, if you looked at all the money in the world and see how much money is about to flow on chain, you realize all these institutional types are not going to bring their billions and trillions and quadrillions of dollars without some type of privacy. And so if we want to see everything interacting on chain, then we're going to need privacy. But, of course, I have to shout out Litecoin's optional privacy for payments, which is something I really like as well.

Ivor Jugo, Protofire · 13:37

Yeah, as you mentioned. Yeah, Justin, go ahead if you want to add something. Yeah, please.

Justin Giudici, Telos · 13:42

Yeah, I kind of want to almost turn this question on its head, because I guess the question to me is: what isn't good for privacy, or what doesn't require privacy, rather? Most of the use cases that we currently use on Web3, payments, interacting even with DeFi, and most of the things that we do in the real world, like paying for goods and services, payroll, all those things are obviously, in most cases, better private, right? And so I wonder if in Web3 we've spent so many years building out public transactions and there's really not much demand for it. So I guess I almost want to ask: what are the use cases that we want to be public? Because the rest, everything else, to me seems that it would be best private, as it has been for hundreds of years. So yeah, that's my opinion on use cases.

Darren Gray, QuickSwap · 14:52

Yeah, Justin jumped in just before me there. I mean, obviously the biggest use case is keeping all of your fingers and toes. You don't go into a cafe, buy a coffee, and then the person that you just gave money to knows exactly how much is in your bank account now. That is insane. Aztec obviously said it as well, but I think privacy is just a basic human right. It's something you should expect. If you're walking down the street, no one should know how much money you've got. It's so obvious.

Brian Butler, Polygon Labs · 15:28

Yeah, just to add to that. It's funny, what Darren's saying, that specific example of using a card and people being able to know where the money's flowing, how much balance is on that specific wallet. So when I was at Visa, we obviously served a lot of stablecoin-linked cards, where it's effectively a wallet you can spend on a stablecoin balance. Think Rain, Bridge, etc. And I remember when I was working on these specific programs, there were instances where people would actually make transactions with those cards and then go to the blockchain explorer and then see the transaction and route it to a specific settlement wallet, and then be able to see how much money these stablecoin and card companies are moving on a daily basis.

And for me, I don't trust people, I guess. What has been proven time and time again is people are scrappy at getting data. I mean, you literally see it all the time with the investment world. People truly have satellites from the sky looking at oil tankers going through a specific passage and just counting how many oil tankers are going through that single day. So, point being, this is also competitive intelligence and alpha that these people could go get if these transactions are not private. And so it is imperative that we get to that point, or else institutions will not come online.

Rado Patus, Protofire · 16:38

Yep. Just to chime in on what was already mentioned by Luke and Aztec about, especially, the institutionals. But let's start, let's get a step back. I believe that the privacy should be baked in, basically, in the protocol. Imagine that you would be sending an email...

Ivor Jugo, Protofire · 16:38

Thanks, Brian. Yeah.

Rado Patus, Protofire · 16:59

over a plain protocol, or browsing now with HTTP instead of HTTPS. You just don't realize that's even there. You just expect that all your communication will be private. So this boils [back] down to Web3, and especially the institutionals we now talk to, which we are working for and basically building some infrastructure for them. Imagine that a CFO will see other companies, which they want to acquire, their money flows. That's complete disadvantage for everyone. And it boils down also to treasuries, OTC flows, governance. Basically, you don't really want to expose anything of that. It should be by default private.

And that's where I see the privacy, where the use cases are. I believe that they are basically everywhere. So everything should be by default private, with a certain degree of, well, auditability and disclosure. And that's what the institutions are also expecting. They moved from 'it's optional, the privacy' to basically... sorry, now I forgot the word. Basically it boils down to compliance and basically... Yeah, basically it's a requirement if you want to deliver anything, any software for them. It's basically a requirement for them to be [unclear]. That's where we are. What do you think?

Brian Butler, Polygon Labs · 18:50

If I could just quickly add, I do think it's a great sign, though, that privacy is the topic of conversation now, because three, four years ago it was scalability, and now we have higher TPS across all chains. These transactions are happening at less than a cent. And so this is just the natural progression. And the fact that we're talking about privacy means institutions are looking into this and trying to solve a real problem. And so I think it's going to go, well, you had scalability, privacy, identity is probably next. Trying to make sure that this liquidity and your identity is not fragmented across so many protocols. But this is a good topic of discussion. It shows that we're heading in the right directions.

Aztec Amaya, LitVM · 19:27

Yeah, even the identity stuff needs privacy, some level, because if you're looking at...

Ivor Jugo, Protofire · 19:28

Yeah, definitely.

Aztec Amaya, LitVM · 19:37

I don't know, ZK technology and how it can help with your identity or DIDs or whatever it is, privacy is really important for that, the future innovations that will also happen in blockchain, like Brian was just talking about.

Joël Valenzuela, Dash · 19:56

Yeah, to sort of piggyback off what he said.

Luke Bowman, Secret Network · 19:57

100%.

Joël Valenzuela, Dash · 20:01

Sorry, go ahead. Yeah, so I think those are the two things. Obviously, security and self-custody is one, but privacy is really going to matter when people start using what is known today, at least, as a crypto wallet, for things much more than just sending and receiving money, as something that they can just have multiple of if one gets compromised. When it's treated as a permanent account, as your identity, for example, or you have login credentials or things like that that are stored in that account, you don't want the whole world seeing, let's say, 'This guy's a member of this gym. This guy goes and is a member of that society. He has this educational credential,' or whatever, that's all stored on a blockchain account of some kind. That's a lot more sensitive, maybe, than even just how much money you have.

There is a certain extent where, for example, high net worth individuals might... Everyone knows sort of how much money Elon Musk has, and it's not a huge concern, but all the rest of things could be very, very sensitive. And right now we kind of came from the digital cash point of view of 'this is just a cash container,' and then just started playing around with Web3 stuff under this kind of assumption that this doesn't matter. It's not real stuff. It's not your driver's license, social security card, passports. None of that stuff is on chain. And at some point, maybe it will be, and it can't be on chain if it's completely public.

Luke Bowman, Secret Network · 21:37

Yeah, yeah, 100%. I think a lot of that work is where selective disclosure starts coming into play. And in my opinion, everything should be private by default. It should start at encrypted, and it should all be baked into the foundation. In an ideal world, that's how it would be, in my opinion. However, we do need the ability to disclose certain information, especially for things like ID. So I need to be able to selectively disclose my ID to the person that I need to prove I'm of the age for whatever it is I want to buy. But I don't need the rest of the world to see that. And that person only needs to see that I am above the age that I need to be to purchase whatever that is. They don't need to see my address. They don't need to see if I'm an organ donor or anything of that nature. They just need to see what they need to see. So, the ability to disclose selectively.

And that's personal, but at the institutional level too, I think Rado was mentioning, the compliance areas of institutions also need that selective disclosure. They need to be able to just make certain disclosures for securities and things of this nature. And so that's another aspect: the ability to share at will, but the ability to control who it is that sees everything is the essential part. That makes sense?

Ivor Jugo, Protofire · 23:18

Yeah, definitely. So, having it in different layers of the stack, what exactly we're showing and whatnot. Great, great insights. Well, one question, maybe, on the... because most of these were on the positive side, but also let's speak a little bit about the thing that can be improved, potentially. I would say from my experience, but I'm speaking here more as an end user, of someone that tried some privacy tools.

One thing, as someone who is quite some time in the Web3 space: while I was trying on Ethereum to shield some transaction and sending some funds from one wallet to the other one, where I wanted to have private moving of funds from now on and not being able to link it to any other of my known accounts. Once trying it, tried to set it up, after a couple of hours of back and forth with the protocol, I just figured out this is something that I cannot do each time that I want to hide my transactions. And I will just do it once for the gas fees that I'm going to use, and that's it. Then after finishing it, I figured out that probably I can do the same with just sending it from some CEX and having the same result at the end.

But what I want to say from all of that is that I just felt that the user experience of hiding the transaction at this point of time is quite a headache, especially for the newcomers into the space. So I'm curious to hear how you see it, how the ones that building in the space, how you try to fix it, make it better, how it looks like on your chains, protocols. Any thoughts?

Aztec Amaya, LitVM · 25:05

Sure, I can jump in a bit here. So, I think one of the big killer apps right now, or technologies, is DeFi. And in DeFi, there are certain vulnerabilities that can occur if you don't have privacy, like MEV attacks, front-running, just gathering information on individuals. So, what's great is that there are people like SilentSwap. I have a good friend, Shibtoshi, that's building SilentSwap. So you have privacy on chain. And so I think it's great to see that even though, like Luke was saying earlier, things weren't necessarily built for privacy up front, that this is starting to change. And I think over time, with this kind of, I call it the world unified ledger, you'll be able to use different types of cross-chain tools, or borrow privacy, let's say, from another stack, and interoperate and work together. So things are quickly changing, and a lot of these vulnerabilities will be solved.

Ivor Jugo, Protofire · 26:36

Anyone else here?

Luke Bowman, Secret Network · 26:36

Yeah, I would just jump in. I guess one of the pain points that basically anyone that uses privacy in Web3 will point out is the user experience is rough. Generally speaking, no matter what, there's going to be extra steps somewhere. So you have to create viewing keys in some cases. You have to wrap it in a MimbleWimble to hide it, you have to send your Zcash into the privacy pool. There's some extra steps. So that's added friction. And that's usually, generally, the pain point. So what needs to be iterated on more and more, and it's something that we continuously work on improving on, is that user experience: reducing the amount of steps needed in order to do whatever it is you want to do.

And to Aztec's point, he mentioned SilentSwap. What I love about that tool is it feels just like a normal swap. Everything's basically on the back end. It's all abstracted, so the user doesn't have to take all the steps. They just need to swap like they normally would. If they can use Uniswap, they can use it. And it takes care of things like bridging, wrapping it in the privacy technology, and then routing it to the end destination, all on the back end. So no matter where you're building, if you're building in privacy, think about the user experience and how you can improve it. That's going to 10x the space quicker than anything else, in my opinion.

Joël Valenzuela, Dash · 28:26

Yeah, I would definitely echo that. And as a long-term user myself of a lot of this stuff, I have a lot of unfortunate experience with some of the worst parts of the pain points. One thing, I mean, obviously scaling is one thing. If scaling is easy, it becomes more difficult with privacy. So, for example, a Bitcoin transaction is like a few hundred bytes, and a Zcash transaction is like nine kilobytes or something like that. Just the amount of data that you need is much higher. Wallet syncing and things like that can become very difficult because, again, a lot of this data isn't publicly on chain, and so you have to find where to look for. There's encrypted nullifiers, things like that, to look for.

The user experience, which has always been a trade-off, because you want the very fastest, best user experience. Sometimes generating a cryptographic proof takes like a couple seconds. And then, of course, if you want to broadcast to your whatever node over Tor, you want to communicate with that, that adds some latency. Then if you have a protocol like Dandelion++, which kind of routes the network level traffic through a few hops, that adds extra latency. And then, for example, if you have a Monero transaction, you need to wait for 10 confirmations before you can re-spend your change. And I've seen people in real life going and buying something with Monero and then having to switch to Litecoin, for example, because they can't re-spend it within that short amount of time that they're going to buy something from one merchant and then another.

There's just all these complexities, and that's one of those things where I think that we can really evolve the space to really work out well on that. But it requires just the smartest and best engineering. And I have to say, it's, maybe, I don't know if it's a tall task, I guess it is, but it's achievable. It's just you can't make a lot of poor engineering decisions on your road there, because there's a lot of unnecessary trade-offs that maybe someone might make that don't really rear their ugly heads if you don't have...

Joël Valenzuela, Dash · 30:31

complex things like privacy or smart contracts or other things, that as soon as you add those extra factors in, it starts to show the limitations of your stack. And so I do think that we can have high-level privacy for everyday usage, and it actually works and has a great user experience, but it will require doing things the right way.

And another thing is, I do think people need to think very intelligently about how they're approaching privacy and what privacy you really, realistically need, because there is no such thing as universal perfect privacy. And the closer you get to that, the more major trade-offs you have to get that might not really do you any good. So, for example, if you're using a shielded pool, like a Zcash shielded pool, all the transactions, anytime anyone broadcasts a transaction, it just looks the same. Now, if you have a tokenized system where you send tokens, you can make it, which, for example, Zcash Shielded Assets are trying to do this, where those transactions are indistinguishable between regular Zcash transactions, but that adds a whole lot of overhead.

Now, if you split those pools into two different ones, where one's just for Zcash and one's just for tokens, for example, you have a lot of efficiency gains, but a network observer can tell someone is sending a token versus another transaction, and they can't tell anything else, like how much it's for, what token, who it is, et cetera, who's receiving it, who's the sender. But for me, that's a perfectly acceptable trade-off. But for a lot of privacy hardcores, it's not. They just don't want... just absolute zero information leakage. So we have to think about what information is getting out there, and actually think what are we okay with and what do we actually want private on a pretty granular level.

Justin Giudici, Telos · 32:24

Yeah, some really great ideas there, Joël. I think my first experience with a privacy wallet, I think, was Railgun, I think it's called, for Ethereum. Yeah, they're great people, it's a great protocol. But my experience with it was it's designed for these hardcore people like you're referring to. And not everyone is that hardcore, like most of us, just everyday people...

Joël Valenzuela, Dash · 32:37

Yeah, I know those guys, great people.

Justin Giudici, Telos · 32:54

who expect privacy in our payments and everything we do, and that's just the default that we don't want to... it's just unnecessary to give up on that. So yeah, some of the things that I experienced were, yeah, that syncing issue. It took like 10 minutes, or I tried another wallet and it took like an hour to sync my balance. It's like, well, that's a no-go for 99% of people, right? And I think where we need to take privacy in crypto generally is to more like a consumer wallet experience. It's got to be as good as banking, or if not actually better. And there's no reason we can't achieve that over time.

In the short term, that may require some trade-offs on the level of privacy, but I think, yeah, for most people, they're not trying to money launder or do malicious things. They're just trying to have general day-to-day privacy over their balances. They don't want to get robbed because they have $10,000 and they live in a third world country where those types of things might happen. Those are the types of things that we need to solve for people. And if they're going to use these wallets, they have to have a decent user experience, otherwise they may as well just use their bank account. So yeah, I think that's where we need to go, is more towards a consumer experience.

Brian Butler, Polygon Labs · 34:29

Yeah, just to add, so I agree with you fully, Justin. It's got to be, effectively, [a] toggle, like I was saying before. And specifically for the business too, it's probably just going to be default for them, right? It's going to be a button that they press: all their transactions are private. Regulator comes, 'We want to see all your transactions.' 'Here you go.' No problems at all. It's going to have to be that simple. Now, getting down to that level, Joël touched on it, it's very complex when it comes to the actual development that goes into it, but I have belief in this space and we're always going to figure it out.

That's one thought. Two, it's so funny. We're talking about privacy, but when I got into this space back in 2020, I mean, the entire thing that enticed me to it was the public nature of it all. And it's so funny, when these big companies come with big checks asking for things to be private now, we're changing pretty much the entire ethos of it all, which is totally fair. And it makes obviously sense for transactions and doing things on chain, but yeah, money will change the opinion. So, but I do think that... I saw the other day that Visa is now a super validator for Canton Network and things along those lines. And I congratulate the team over there. That's really exciting, that they're going to be a validator node, right? Visa's routing transactions for a blockchain network. I mean, we're in 2026 and that happened.

It's going to be interesting to see how these different networks take it on, right? You have, effectively, privacy is now becoming a new way of selling permissioned networks again. So Canton, I would say, is more of a commercial permissioned type of network. Tempo effectively has a way to go into a privacy environment within it. I think Polygon is going to be looking into similar types of technologies, where effectively you have the public chain, but you're able to go into private environments and then leave those environments.

There's going to be a lot of different interesting solutions, but what is going to be problematic is just, with all of these different chains, as soon as you bridge, I feel like the privacy will effectively go back to zero. As soon as you're bridging over and you're trying to connect all these different liquidity points, you're going to run into this trouble of just things becoming public again. And so whoever can solve that problem, and just making sure all this liquidity is not fragmented and still remains private, that would definitely be a winning solution.

Rado Patus, Protofire · 36:33

Yeah, so to add to that, really one of the questions we got from the procurement is, basically, when you had these institutional ones, they don't really want to stay on one chain. They really want to have their assets on different chains, basically, and switch them back and forth. And prove me wrong: if there is already a solution that can basically do some privacy cross-chain, that will be a killer feature. So if you know about one, I'll be happy to hear it and I'll sell it to everyone. But as far as I know, there is not really a good one.

Aztec Amaya, LitVM · 37:10

SilentSwap.

Luke Bowman, Secret Network · 37:13

Yeah, that's a really hard one. And there's definitely limitations. Yes, it is possible, especially at the transactional level. And it comes down to routing and obfuscation. Brian was 100% correct. Once you bridge out of a privacy network, you are now bound to the rules of the public network that you just bridged to. So you have to start depending on obfuscation, and that is tough on public blockchains.

You can route, for example, SilentSwap, like Aztec just mentioned, does it. For example, you can swap native Bitcoin into native Ethereum cross-chain privately, but it's because it's routed through privacy networks. So it starts public, goes private, routes out of the privacy networks and pools, the privacy layers, I should say, back into the public domain. So in the middle of the routing, it's obfuscated. The chain is broken. So no one can track that this Ethereum came from this Bitcoin. But it is a tough problem, and especially with other use cases. So you can get creative, but it's a very tough problem to solve. And so the tougher it gets, the harder the UX tends to become.

Rado Patus, Protofire · 38:47

Yeah, so, yes.

Luke Bowman, Secret Network · 38:53

I think SilentSwap is fantastic in how little friction there is. And I've never seen anything else like it. It's absolutely the best user experience I've ever seen in all the years I've been in this space. But I would love to see more and more things like that. Things that protect privacy on non-financial assets, cross-chain messaging, smart contract calls, things like this. I would love to see more innovation in those areas as well.

Joël Valenzuela, Dash · 39:29

So I have to give it [a] random shout-out, and, unfortunately, I've not had enough time to do tons of research on it, but NEAR, the NEAR blockchain, has been advertising a private shard they deployed, and I'm very much looking forward to NEAR Intents, the cross-chain DEX, which supports Dash and Litecoin and a bunch of other assets like that, to be available on that. So the actual swap, the actual intent on chain, is private. So I think we are coming along, where definitely cross-chain privacy is tricky, especially because people think they can do pass-through privacy by swapping Bitcoin to something like Zcash and then back to Bitcoin, and, 'I cleaned the coins,' or whatever, and it's not quite how that works. But I am hopeful that we'll get there within the next few years.

Darren Gray, QuickSwap · 40:17

I mean, the thing is as well, people tend to go for the cheapest option. If the privacy option is more expensive, a lot of people will just skip it. We do live in an era where people are happy to give all of their data to Facebook and all of their data to Google for just a good service. People care less about privacy than they do about a good UX or a good service.

Rado Patus, Protofire · 40:49

Yeah, that boils down to what Justin said. If I am an average Joe and I see that I need to spend an extra amount of effort to transfer from A to B, and I need to pay five bucks for it, maybe not. Maybe I'll just use the regular transfer, which is two cents.

Ivor Jugo, Protofire · 41:12

Okay, but we also have, on the other side, some on-chain proof that people are paying for fees, and we see, yes, a decent volume of private transactions, let's say, on the largest protocols here, for now. But yeah, things are changing, definitely. But another thing that I was thinking, I think Brian mentioned it, regarding the liquidity separation. So we already have hundreds of chain, with each chain has its own hundreds or whatever number of DeFi protocols. So the liquidity, it is what it is. It's a zero-sum game. So it's being divided between a huge amount of different players. And if we go a step further and start to dividing it between different privacy protocol, because there is no correlation between each one of them, is this a deal breaker for whatever DeFi protocol to potentially integrate some private protocol? I would love to hear your thinking.

Ivor Jugo, Protofire · 42:18

Yeah, maybe Darren, you are with QuickSwap. So, as a decentralized exchange, how do you think about it?

Darren Gray, QuickSwap · 42:27

Can you repeat just the last bit, please?

Ivor Jugo, Protofire · 42:31

Yeah, sure. So if you consider integrating a privacy protocol, which potentially would separate the liquidity that you have on the exchange even more between different privacy solutions. So how do you think about it? Is it a deal breaker, or it's something that you...

Darren Gray, QuickSwap · 42:49

Yeah, I mean, we actually have been looking into that. QuickSwap has always worked with everyone we can. So if other people are going to build things on top of QuickSwap, we're usually more than happy to sort of put that on the front end, or sort of instill that as part of the core product. There's a lot of people building in very specific niches that no one has the time to cover it all. So the sort of whole mantra since day one has been: work with people that have the cool tech, and then just everybody wins.

We have been looking a lot into this, a lot of it. Specifically, the privacy and transaction sort of obfuscation, et cetera, has been the touchy subject, because even the lawyer on our side is a little bit... Obviously, up until, I think, maybe two years ago, the landscape in the crypto space was definitely very different. The SEC at the time was much more scary than it is now. So I think things are definitely moving in the right direction. I think it's a lot about, obviously, QuickSwap has immutable contracts. Anyone can sort of use it. But we are sort of bound to make sure the front end isn't used by maybe parties that shouldn't actually be using the front end, maybe OFAC-sanctioned people or anyone engaging in other nefarious activities.

But yeah, I mean, it has been a touchy subject on our side. It's something that we haven't had a lot of ask from the community for so far. But it's definitely something we're open to integrating if there's a lot of demand for it. I mean, looking at the volume of the different swaps so far, QuickSwap does a lot more volume. So I think right now we're still looking at exactly what everyone just said. I think it was Justin: the demand for products like that isn't maybe as much as it could be yet. And it could be fee related. It could be just people don't care about being private.

Aztec Amaya, LitVM · 45:05

I'd love to jump in there. So I'm one of the ones that really leans on a lot of DEXes out there to adopt privacy, because I think that right now there might not look like there's that much demand, but if people had the ability to choose...

Brian Butler, Polygon Labs · 45:05

I...

Aztec Amaya, LitVM · 45:30

I think, and it made sense, devil's in the details with the costs, slippage, transactional costs, all that. But if it was pretty much on par, I think they would choose privacy. And I also think that, as the builders in this space, it's up to us to push everyone to build, in a... focus on decentralization, focus on privacy, these really important things in our world.

And I think that if we continue to do that over time, what will happen is that the conversation will switch from being like, 'Well, it kind of causes these issues,' or, 'It's maybe a little bit more expensive,' to people just demanding other solutions, like, 'Why don't you have privacy?' So I know we're kind of in that early stage right now, where people are starting to get it for privacy, but to me it's up to us to make sure that the future generations of this world have really great tech, and that's up to us.

I'm sure there might be some reasons why you as a solution might not adopt it today, but I think it's, to be not only on the cutting edge, but to also just do the right thing. I would say try to find out how you can add privacy to your solution.

Darren Gray, QuickSwap · 46:59

Just to jump in, sorry, quickly, and maybe push a small question. I know Joël's actually been looking into this recently, but where do you all actually see privacy being? Obviously it could be at the blockchain level. I personally think it'll eventually end up at wallet level, where you just download a wallet, things that happen inside that wallet are private to you. But if you need to sort of give anything to a government that asked nicely, then there you go.

Joël Valenzuela, Dash · 46:59

I...

Joël Valenzuela, Dash · 47:31

Yeah, privacy is at so many different levels for so many different things. I think that the one thing that's very much the sort of non-negotiable part, I think, will be on-chain privacy, meaning your on-chain transaction will have to at least minimize the amount of data leakage. And I like this term MVP, or minimum viable privacy. And I kind of feel like for financial transactions, that sort of... amounts are hidden. If you see that a well-known someone transact, some address transact with someone else, if you hide the amounts, that's most of the damage that's hidden, even though you would like to hopefully break the transaction graph as well.

Now, where other things happen, the blockchain is the most public level. So that part has to have at least a minimum of privacy on it, because anyone with a block explorer just goes in there and can find it, especially in the era of AI, where you could just have your LLM just scrape the entire blockchain, try to find patterns indiscriminately, and just be like, 'I think this is a person. I think this is a person. I found an IP trace to probably their home address.' That's the number one thing. Other network-level privacy things, of which node is broadcasting which transaction based on IP addresses, is important, but it's a little bit more sophisticated to go after, maybe. The one thing where, and this is where...

Joël Valenzuela, Dash · 49:00

I think a lot of hardcore cypherpunks like myself might not bristle at this thought, but I kind of feel like the wallet and infra level is where things might leak more long term, and everyone's okay with it. Meaning, if you have a wallet and you're using some company's nodes to broadcast your transactions out to the public, and you're querying CoinGecko for a fiat price of this or whatever it is. All that stuff that's leaked to the manufacturer of the wallet that you use, there's plenty of ways of getting rid of that, but that's where you get a lot of trade-offs. I kind of feel like that's where most people will be comfortable with the trade-offs. They'll say, 'Well, the whole world doesn't know what I'm doing, but the actual wallet manufacturer might know a lot of things, even though I self-custody everything.'

And, I guess, if the government has to subpoena the company and just be like, 'Tell me all the user data you've figured out,' that's not a big threat model for a lot of people. And so I kind of think that's where the trade-off is going to end up being, if it does have some UX efficiency gains. Although, obviously, I'm going to keep pushing for things that don't have those trade-offs, because you always need to have that for the Overton window. But if I'm just being realistic, I think that people will be like, 'Hey, I download Trust Wallet. I trust Trust Wallet as long as the rest of the world doesn't hack me, and as long as I'm not doing wildly illegal things, I think I'm okay with whatever, with them knowing some things about my transaction history.'

Brian Butler, Polygon Labs · 50:42

I think, just to add, so I remember, Ivor, you're talking about if all things were equal, when it comes to the cost, let's just say, for making a transaction, actually, maybe it was Aztec saying it, you would choose privacy, right? If the costs were equal. But the thing that we're going to see with privacy, and what we have to solve for, is, again, that liquidity fragmentation. And all that really means is these transactions and this swapping becomes more expensive. And that matters so much to these different payments companies, because at Visa, every single basis point, which is literally just $1 off of $10,000 transaction, matters to these companies.

And so for companies that are moving $100 million in a transaction, let's say the swap fee is 10 basis points, or, sorry, more so one basis point, that's about $10,000, I want to say. So in these situations, you have to get the cost as low as possible. And so, in order to do that, you really have to connect all these different liquidity endpoints in order to do so.

And this is not as much related to privacy, but funny enough, I actually really agree with, I mean, he's a Brian himself, Brian Armstrong's entire thought on not accepting the CLARITY Act yet. I think there's a huge point there, because at the end of the day, if money is not treated like money on chain and it can't just make yield, you're going to still run into these on- and off-ramping problems, where there are costs to do these rampings. And so that just adds intermediaries into these transactions, and we're trying to get away from that. And so I think, again, we just have to continue to keep reducing the cost. That way, blockchains truly are the cheaper, programmable, faster way to move money across the world. So yeah, we have to make it a global RTP network, but that's not costly.

Justin Giudici, Telos · 52:24

Yeah, if I can quickly just touch on cost as well, I tend to agree with Brian. I think, yeah, we'll get to a certain point where, and I think we're pretty close to that already, where the price is just... there's not too much difference. I mean, at the moment I'm spending like hundreds of dollars on AI subscriptions. So the thought of, say, spending like $5 on my transactions for the month to do those privately, versus spending 50 cents or a dollar, like in first world countries, that's not going to make any difference at all. Of course I'll spend a few dollars more to do things privately.

Once we get the user experience to a point where it's better, then there's just no reason not to use privacy. And the costs will come down. So in my mind, it's not something I'm really concerned about, that people will go with the cheaper option. They'll always, over time, go with the better option. And it's our job, I think, just to make sure that privacy is the better product, essentially.

Aztec Amaya, LitVM · 53:42

I have to agree. So first off, with something like Litecoin today, with MWEB, you can send cryptocurrency across the world for less than a penny. But in regards to Web3 functionality and the cost of privacy today, sometimes it's a little bit higher. But what I believe will happen is that as it gets adopted more, it will be a race to the bottom of people trying to find ways to make it more cost-effective. So I think where we start is just making sure that people start trying to implement privacy. And as builders in this space, if we work on basically competing and creating competition in this free marketplace, the price of privacy will only go down over time. So, of course, just innovating and trying to find great ways to bring it down in general is really important as well.

Luke Bowman, Secret Network · 54:49

Yeah, absolutely. Well, on a couple levels there: speaking to the liquidity and the cost of the fragmentation, it's real. The struggle is real, especially right now. The privacy networks are generally thin compared to some of the more public protocols. One day, and as it gets adopted, it will grow, after a few institutions just say, 'Hey, everything has to be private or we can't adopt this.' Then we'll see Uniswap-level liquidity on these privacy protocols. It is a cost now. But as Aztec was saying, the trick is just getting the optionality in front of people, let them choose. And then the more people see adoption, the more people will start [competing] to make better products and take advantage of that, the users.

I am going to have to drop off here in a couple of minutes, but I wanted to just touch on the levels of privacy. Yeah, I have another appointment. It's been a great conversation, but I have to agree with Joël...

Joël Valenzuela, Dash · 56:01

Yeah, same.

Luke Bowman, Secret Network · 56:10

a lot, on just what he said when it comes to which level is the most important. 100%, the on-chain privacy is the most important. The wallet, yes, there is a lot of metadata that people don't even realize they're sharing with the wallet. But at the end of the day, the wallet cannot protect the on-chain data. It doesn't matter what wallet I'm using. If I'm on Ethereum, the Ethereum blockchain is public. So we have to work on that level of being encrypted. And so if we had to choose one, it is there.

But on the other hand, I would love to challenge more wallet providers to start integrating better privacy practices: start protecting IP, start protecting metadata, start protecting your users overall. And the same can be said for just app builders. At the app level, there is a lot of leakage that people don't really think about. And so we can do better on all levels. But like Joël said, if we have to focus on one thing, let's get the on-chain data encrypted, or at least an optionality to get the minimum viable privacy. I actually like that, the MVP. So yeah.

Joël Valenzuela, Dash · 57:41

Yeah. Ironically, by the way, I think that the metadata at app, et cetera, level is the much bigger threat to privacy than the on-chain thing. It's just that the on-chain thing is like the foundation. Without that, you can do everything else and it's really hard to keep that. And also, once the chain is better, you can build more privacy experiences easier, as opposed to the other way around. So yeah. And I will have to jump off with this, but it's been a fantastic conversation...

Luke Bowman, Secret Network · 58:09

Yeah, agreed.

Joël Valenzuela, Dash · 58:12

everyone. Thanks very much for inviting me, and I got a Space to run, so thanks, everyone.

Ivor Jugo, Protofire · 58:17

Sure. Sure. Yeah. As we're coming close to the end, I would then just suggest that we do a lightning round of, maybe you can answer quickly, to one of you: what is the most exciting thing that you think that we could expect in a year or two when it comes to privacy? And then we can close it up. Maybe starting with Luke. You also hurry up for another one. Yeah, please.

Luke Bowman, Secret Network · 58:45

The most exciting, within a year: I think within a year we'll get there with on-chain agents adopting privacy. That would be the most exciting to me, seeing AI agents actually use confidential computing at the foundation and adopting and using privacy protocols for their workflows. That would be mine. My choice. Then I got to jump off. Thanks again, everybody. Great, great conversation. I got to run, but I appreciate it.

Brian Butler, Polygon Labs · 59:23

I'm happy to give my quick take, and it was great meeting you, Luke. But I would say over the next 12 to 24 months, what's going to be really interesting is seeing these public blockchains create privacy environments on their public chain. At the end of the day, I'm at Polygon, Solana and all these other different chains out there that have been public since day one are not necessarily just ignoring what's happening, right? Things are going to be done. And so there's going to be massive technological advances in order to make sure that, for certain situations where things need to be public, we will maintain it. But also, when we have to, there needs to be that toggle button to be private. And so I think, I guess I'll say, public chains having privacy environments.

Aztec Amaya, LitVM · 1:00:15

I have to echo what Brian's saying, and in a bit of what Luke was saying. I think that what's exciting in general, which is coming up, is just the ability to, in this, again, bringing up this word, unified world ledger, that all of these shards, or all of these chains, essentially will be able to interoperate with each other and borrow from other, all these modular pieces. And so maybe chains won't necessarily need to build their own privacy. Maybe there's some kind of bolt-on privacy, or they just borrow the privacy of another solution. And I think it's also interesting how agents will interact and transact, like Luke was saying, using privacy solutions in the workflows. I think a lot of this will start happening in the next year. It's also something I'm looking into myself with LitVM. We're building on top of Litecoin. So the future looks bright. I'm glad to see the cypherpunk mission continuing.

Justin Giudici, Telos · 1:01:37

Yeah, great responses so far. For me, I think even just making some really good traction towards interacting from that privacy base, maybe from the wallet level, having that privacy there. A lot of stuff will still be on the public cryptoverse, but to be able to interact from that private base and make trades cross-chain, I think that's going to be a critical step. And I know it's not perfect privacy by any means, but if we can start to move towards that and get a couple of percentage of adoption into privacy-first wallets, privacy-first networks, from those privacy networks, even just interacting with the public cryptoverse, that would be a huge leap in the next year. It's a small goal, but currently you'd have to say like 99.99% of crypto is public. So if we can even just get to 1% in the next year, that would be huge. And I think that it will be more of a parabolic increase in privacy versus public. It starts small, but you have to start somewhere.

Rado Patus, Protofire · 1:03:09

Yeah, I would just chime in. Yes, what Justin said. I would also love to see... I don't really think that we will see institutions massively jumping in a year, basically, in the privacy. They need much more, something we didn't even touch, basically: that selective disclosure. So basically, who owns the decision to disclose. So that's one of the big problems which is still blocking this adoption. But as Justin mentioned, I would love to see much more people using, and basically much more products and DeFi projects use the privacy and start pushing the adoption. That's what I would love to see in a year.

Darren Gray, QuickSwap · 1:04:02

See, my issue with the question was that it mentioned a year. So what no one sort of mentioned yet, actually, which is a really big thing, was that ETH and their strawmap mentioned that they're going to be working on shielded ETH transfers. I think once maybe a blockchain like ETH brings that in, more of the other chains will follow. It'll be like a standard sort of process at that point. If I can do it on ETH, I want to do it on Polygon, I want to do it on Solana, I want to do it everywhere else. But yeah, again, the issue is that it's on the ETH roadmap, and a year time scale is probably not feasible. I think, yeah, short term... Yeah, I think that's the main thing we were probably waiting on before everyone sort of thinks, 'Okay, yeah, cool, privacy. Yeah, I want that.'

Brian Butler, Polygon Labs · 1:04:57

I have faith in all of this stuff. I think I look around at all the builders in the space and I'm so impressed. And one thing I've noticed, going to all these different conferences and meetups with people building, is everyone has eye bags, because everyone works long nights. So we're going to figure it out.

Ivor Jugo, Protofire · 1:04:57

Cool.

Ivor Jugo, Protofire · 1:05:14

Definitely. Okay, guys. Thank you. Thank you very much for your time. This was a great discussion. I hope we will find some time doing something similar in the future with the same people here. Also, thanks to our listeners. And yeah, I wish you all have a nice day, and thanks again for being with us.

Ivor Jugo, Protofire · 1:05:38

Bye.

Rado Patus, Protofire · 1:05:38

Thanks, all.

Brian Butler, Polygon Labs · 1:05:39

Great meeting you all, bye.

Aztec Amaya, LitVM · 1:05:40

Go on, legends.

Rado Patus, Protofire · 1:05:42

See you.