AMA Highlights: Compatibility, Competition, Breakthrough: New Narrative in the Privacy Track

Author: Oasis Chinese Channel

On August 30, 2022, at 19:30, Oasis Network held a Twitter Space event themed "The Second Half of 2022: Compatibility, Competition, Breakthrough | New Narrative in Privacy Track."

Recently, Oasis Network launched the industry's first and only EVM-compatible privacy ParaTime, Sapphire, and initiated the "Keep it Confidential" privacy protection hackathon, calling on everyone to build the world's first DApp with privacy protection features in Solidity and win generous rewards.

In this era where users highly value data sovereignty, privacy DApps have become a necessity in Web3. As a pioneering development environment, can Sapphire lower the threshold for implementing blockchain privacy to some extent? In what specific application scenarios will it bring more innovation to the industry? What future Web3 privacy solutions are there?

In this event, we are honored to invite three guests: Funny, partner at 7 O'Clock Capital; Turing, co-founder of legaIDAO; and Jeffrey, co-founder of BOOL Network, to discuss related topics with the host, William, ecosystem product manager for Oasis China.

This article is a review of the highlights from this AMA event, with some content edited.

Self-Introduction Segment

First, let's welcome our guests and please introduce yourselves to everyone.

Funny:

Hello everyone, I am Funny, a partner at 7 O'Clock Capital. I am very happy to exchange and share with all the guests. 7 O'Clock Capital mainly focuses on primary and secondary investment businesses, dedicated to investing in public chains and Web3. I hope this sharing can spark more ideas with everyone.

Turing:

Hello everyone, I am Turing, co-founder of legaIDAO. legaIDAO is a DAO organization that brings together legal professionals from around the world to establish a Web3-native order. We hope to create a Web3-native order through decentralized forms and spread this order.

Jeffrey:

Hello everyone, I am Jeffrey, co-founder of BOOL Network. BOOL Network is a decentralized, secure, and fully chain-interoperable foundational network built on technologies like MPC, ZKP, and TEE, which can support protocols for distributed key management, cross-chain bridges, and oracles.

Q&A Sharing Segment

Question 1:

Recently, Oasis Network announced its development roadmap for Q3 and Q4 of 2022, where "the first EVM-compatible privacy ParaTime Sapphire" is a key focus for the next stage of development.

As the industry's first privacy EVM computing environment, do you think the launch of Sapphire can lower the threshold for implementing blockchain privacy to some extent? In what specific application scenarios will it bring more innovation to the industry?

Funny:

If Oasis's privacy ParaTime Sapphire can be EVM-compatible, then it will undoubtedly lower the threshold for implementing blockchain privacy. With EVM, many products that want to achieve blockchain privacy can directly adopt Oasis's technology instead of building from scratch. Additionally, through EVM, their products can easily have privacy attributes.

Moreover, I believe that for the entire ecosystem, the arrival of Sapphire can enable many things we previously thought were impossible to gradually come to fruition. For example, it can accelerate the development of DID. Previously, DID faced challenges in gaining deep user trust and obtaining sufficient private data. With Sapphire, users can have stronger trust in their network environment, allowing them to contribute more personal information to promote the development of DID.

Turing:

I believe the privacy needs on-chain can be divided into two aspects: one is financial privacy, such as managing multi-signature wallets. The other is applications in non-financial scenarios, such as salary distribution in decentralized organizations or decentralized scoring and voting.

legaIDAO has already started working on decentralized identity. We are starting from the identity of lawyers and currently developing a very vertical global DAO organization. Decentralized identity can bring about the accumulation of credit under the identity, so it also has a certain degree of extensibility. It can actively certify others and allow lawyers within the system to perform mutual certification. One can imagine that in the future, under DID identity, everyone can accumulate credit for their identity, which is why I believe privacy is very important in Web3.

From the perspective of privacy computing, although the current volume of data on-chain cannot reach the scale and volume of off-chain, as identities are established and data and reputation accumulate on identities, we may be able to package our data and behaviors for privacy computing commercial space expansion in the future.

Jeffrey:

I believe that blockchain itself is a very open network. If your address (Bitcoin, Ethereum, or others) corresponds to an actual person, then a person's privacy will be completely exposed to the public. How to utilize the corresponding on-chain data and even off-chain data while protecting privacy, such as calculating credit scores, requires the support of privacy computing technology.

Additionally, the current EVM ecosystem is the largest ecosystem in the blockchain space. Now that Oasis is confident in supporting privacy at the EVM level, I believe this will not only accelerate the development of the privacy computing track but also efficiently promote the prosperity of the Oasis ecosystem, which the entire industry is looking forward to.

Question 2:

While focusing on the development of the privacy track, we also noticed that the topic of "ZK-EVM" has been highly discussed recently. "ZK-EVM" is a virtual machine that is both EVM-compatible and friendly to zero-knowledge proofs, ensuring the integrity, correctness, and privacy of computations, with breakthroughs in blockchain scalability and privacy. However, the community has also had intense discussions about the advantages and disadvantages of "ZK-EVM."

What are your views on the development of "ZK-EVM"? In terms of the privacy track, will "ZK-EVM" be a viable solution in the future?

Funny:

The main reason for the ongoing community discussions about the advantages and disadvantages of "ZK-EVM" is that several major mainstream projects in the market are ZK-based, and currently, any project related to ZK has a very high valuation, far exceeding that of ordinary projects.

Although "ZK-EVM" and its entire solution are still in testing and have not yet begun large-scale deployment, the reality is that everyone is very optimistic about it, which has led to the perception that zero-knowledge proofs are quite interesting.

Another reason is the endorsement from Ethereum, as anything involving collaboration with Ethereum is not cheap, given that Ethereum is currently the most core and widely recognized chain in the market. However, if everyone views ZK as the only solution for privacy computing, I do not agree, because we know there are many privacy solutions available.

The privacy track actually has other solutions, each with its advantages and disadvantages. Ultimately, it depends on how you empower certain projects within the ecosystem and the level of technical support you can provide, because the ultimate goal is to serve the projects/users. Only by serving the projects in the ecosystem well and ensuring the protocols are robust can users experience the security of your privacy technology.

Jeffrey:

ZK solutions are indeed very popular right now, whether in terms of layer-two scalability or the current ZK-based Layer 1 privacy chains, the market enthusiasm is high. Besides ZK, there are also privacy technologies like MPC and TEE, each with its different applicable scenarios.

However, currently, ZK faces many issues, particularly performance and centralization problems. Generating proofs with ZK is very time-consuming and inefficient. Additionally, there are centralization issues with ZK-based layer-two networks. If ZK can resolve performance, decentralization, and distributed ZK computing issues in the future, ZK solutions will still be very promising.

Moreover, at this stage, using TEE technology to address data security and privacy protection is a good solution. However, some may find using TEE for privacy computing less appealing because TEE relies on Intel or certain hardware manufacturers, and the remote attestation of TEE is relatively centralized. However, Intel is also delegating the attestation authority, for example, to cloud providers. If supporting SGX-based privacy computing services, it can rely on the certification systems provided by each vendor like Alibaba Cloud and Google Cloud, rather than solely depending on Intel.

Turing:

The overall state transition of Ethereum requires a design based on zero-knowledge proofs. There are two camps here: one is native-based, and the other is compiled-based. The difficulty and security of development differ slightly, which is also where we see the so-called wealth creation hotspots or some popular projects competing. However, what users consider the most are still the gas fees and the user-friendliness.

For us, using a standalone privacy public chain to establish in a new public chain or ecosystem, or doing so within an EVM-compatible ecosystem, I think we have no significant limitations because it is a relatively cutting-edge and fresh technology, and we hold a relatively open mindset towards it, which is my understanding.

Question 3:

When discussing scalability, we cannot help but think of another solution—layering. Oasis Network also adopts a unique layered architecture, separating consensus and smart contract execution into a consensus layer and a ParaTime layer. This layered architecture allows ParaTimes to process transactions of varying complexities in parallel while sharing consensus, providing unimaginable flexibility and scalability.

Therefore, I would like to ask each guest to share their thoughts: How do you see the future development prospects of the layered scalability solution?

Funny:

Early public chains essentially solved all problems with a single chain, executing everything on the main chain. In the short term, if the user base is not large, there won't be any issues. However, we must face the reality that in the envisioned Web3 era, we will welcome a vast number of users, and this massive data interaction will need to be computed through the public chain layer, which may lead to significant fluctuations in gas fees in the short term.

What do we know the ultimate goal of blockchain is? It is to eliminate gas fees, allowing everyone to experience the entire blockchain transaction. People realize that the main reason Ethereum needs to upgrade is to implement layering, separating many tasks originally handled by the main chain and delegating them to other layers. I believe scalability is not just a current trend; we should continue on the path of scalability in the future.

Turing:

Why is there layering? Because blockchain has an impossible triangle property, where decentralization, security, and scalability cannot be simultaneously satisfied. This leads to Bitcoin and Ethereum being sufficiently decentralized and secure, but unable to meet performance requirements.

ETH and the current layer-two networks, as well as sidechains, are, in a sense, also layering, essentially adding a layer to solve a problem that cannot be resolved. Therefore, from the perspective of layering, I think the current scalability solutions are a very natural situation for technology.

Jeffrey:

Layering is an inevitable solution. Specifically, Oasis is a public chain focused on privacy, divided into two parts: a consensus layer and a smart contract execution layer. It coordinates the entire system in this way. In simple terms, this approach can separate time-consuming computation processes, thereby improving efficiency to some extent.

Moreover, the concept of layering is a core guiding principle in computer software design, such as the multi-level cache mechanism in CPUs and software layered architecture. Of course, the layer-two network in blockchain is a typical application case of the layering concept.

For our overall structural design, this is a relatively friendly approach, so I agree with the viewpoints of the previous two guests that this is an inevitable solution.

Question 4:

As the importance of privacy becomes increasingly prominent, the development of privacy public chains is flourishing. How do you view the development of the privacy track? Which segments are relatively mature? Which segments still require ongoing construction? How will public chains integrate and compete in the future to promote the development of the privacy track?

Funny:

The privacy track can mainly be divided into three types of products: protocols, public chains, and applications.

Looking back at Bitcoin, you will find an interesting point: peer-to-peer payment. The initial discussion of blockchain was about peer-to-peer payments, which is essentially a privacy-related matter, as privacy holds significant allure in the financial sector.

When Bitcoin first emerged, hackers liked to use Bitcoin for transactions, but later they realized that on-chain payments could be traced. This led to the emergence of some projects we are very familiar with, such as Monero, whose core purpose is simple: privacy and anonymous transactions. It has developed to a point where it is now almost delisted from all exchanges.

Next, we talk about privacy applications. The largest privacy application is the currency protocol Tornado Cash. Although it is very useful and solves many problems, it has faced sanctions from the U.S.

This brings us back to a question: How can privacy coordinate with the laws and regulations of the real world? Currently, privacy public chains are a major investment trend because our transactions require anonymity, we have personal privacy needs, and we need to protect our assets. The Western perspective is straightforward: individual rights hold a very high status. Under this premise, if we cannot ensure our rights while experiencing many things, it is akin to running naked, posing significant risks. Institutions consider this as well.

The privacy track does not have a single solution; there is no technology/product in the market that can completely solve all problems. Users can explore multiple options to find a technology/product that suits their privacy protection needs. Some products have high scalability requirements, so they can lean towards ZK; others may require deeper privacy protection protocols, so they can choose from various other privacy technologies. The future will be a coexistence of multiple chains, ultimately forming a very prosperous market.

Jeffrey:

I personally believe that privacy is indeed very important for the overall development of blockchain. In Web3, for example, how to realize individual data ownership and how to use data without making it visible to others is crucial, and this is privacy.

The issues that privacy computing needs to address include enabling the circulation and sharing of real data elements both on-chain and off-chain. I believe this is a very important problem that privacy computing needs to solve in the future.

Turing:

If privacy is to exist while also integrating with regulation, there may be some points of intersection or solutions. We cannot abandon our demands because of regulation; this is the current situation. In the future, entrepreneurs in the privacy track may need to pay more attention to regulation and adjust their development directions accordingly.

This matter is also closely related to what legaIDAO aims to do in establishing a Web3-native order. Therefore, in the future, we hope to collaborate more with excellent public chains like Oasis to improve the entire Web3 privacy ecosystem.

Question 5:

Final question: What important role will privacy technology play in Web3? How can we better stimulate the greater value of privacy in benefiting society?

Turing:

Currently, the overall ownership of data in the market is still in the hands of Web2 companies. We are still passively accepting the algorithms provided by large companies using our data, while the rights to the benefits of the data have not returned to us.

I believe we have reason to take control of our data ownership and usage rights, and we can lease our data usage rights, allowing the profits generated from the models trained with our data to ultimately return to us.

In the future, I might provide my data to N companies for model training, and these N companies must pay me for using my data. In the future, Web3 may create a clearer separation of rights regarding data ownership and usage rights compared to Web2, allowing those who are the subjects of the data to gain the benefits created from that data.

Funny:

We know that in Web2, all our registration information and personal data are in a state of exposure, leading to a massive black market where personal information is sold. With the development of Web3 technology and the increasing awareness of personal rights protection, we know that privacy protection technology will become an indispensable technology in Web3.

Privacy technology will serve as infrastructure throughout the timeline of blockchain development. People may think that the development of privacy technology is not good enough due to some policy reasons, but we know that the entire blockchain is moving towards a more popularized and widespread degree, and the entire technology is embracing more universal values.

We know that blockchain has a very good core value: code sharing. If we allow all users to experience our technological achievements more profoundly, I believe everyone will increasingly embrace decentralized privacy in the Web3 era.

Jeffrey:

I personally believe that in the future, various privacy technologies will inevitably develop in collaboration. From a certain perspective, these technologies all belong to the category of privacy computing, but there are differences in the problems they solve or the methods they use. In the future, what we want to achieve, besides tapping into the value of on-chain data, is also to extract the value of Web2 data systems under the condition of privacy protection. Such a grand vision is difficult to achieve relying solely on one technology; its realization must depend on the cooperation between different technologies.

Privacy technology is very important for the future and will definitely be a technology used in the implementation of Web3. However, the future cannot be dominated by a single technology; it will certainly involve the collaborative development of various technologies.
Thank you to the guests for their answers, guiding us to further understand the future narrative and development trends of privacy. Thus, this Space event comes to a close. Thank you for the wonderful speeches from our guests, and thank you to everyone present for your active participation, as well as the strong support from the media partners of this event.

We look forward to the next event, and we hope to see you there.