Exploring the Future of Privacy-Preserving DeFi: Insights from the DeCC Day X Shielding Summit

Exploring the Future of Privacy-Preserving DeFi: Insights from the DeCC Day X Shielding Summit

Privacy remains a critical yet challenging frontier. The DeCC Day X Shielding Summit brought together thought leaders and innovators to discuss the current state and future of privacy-preserving DeFi. Moderated by Carter Woetzel of Shade Protocol, the panel featured Supdoggie of SilentSwap, Adam Gagol of Aleph Zero, and intergovernmental expert Anndy Lian. The panel dives into their insights on the importance of privacy in DeFi, the hurdles faced by developers, and the potential pathways to broader adoption.

The Importance of Privacy in DeFi

Privacy in DeFi is not just a feature; it’s a necessity. As Carter Woetzel pointed out, “Privacy and the concept of shielding assets in DeFi have been around for a long time, yet adoption has lagged.” The panelists agreed that privacy is crucial for protecting user data and preventing malicious activities like front-running, where traders exploit transaction information for profit.

Anndy Lian, a governmental blockchain advisor, emphasized the significance of privacy from an investment perspective. “I realized that privacy is really important,” he said, drawing from his experience in the medical field where data breaches are a major concern. Lian’s journey into privacy began with creating a blockchain-based medical record system, highlighting the cross-industry relevance of privacy solutions.

Challenges in Privacy-Preserving DeFi

Despite its importance, privacy in DeFi faces significant challenges. Adam Gagol of Aleph Zero noted, “Right now, it has terrible user experience because the proof generation times are over 10 seconds for most products.” This technical hurdle, coupled with the complexity of privacy protocols, deters users who are accustomed to more straightforward financial interactions.

Regulatory barriers also play a significant role in stifling adoption. Supdoggie pointed out that “the biggest problem is regulation,” citing the example of Tornado Cash, a privacy tool classified as a mixer and banned in many jurisdictions. This regulatory uncertainty creates a hostile environment for privacy-focused projects, limiting their growth and accessibility.

Overcoming the Hurdles

To overcome these challenges, the panelists discussed several strategies. Improving user experience is paramount. As Adam Gagol mentioned, “We’re trying to build a wallet that looks like a regular wallet so that you don’t immediately even notice that this is a private wallet.” By simplifying the user interface and reducing the complexity of privacy features, developers can make privacy-preserving DeFi more accessible to the average user.

Another approach is to address liquidity issues. Supdoggie explained that SilentSwap is tackling this by “borrowing liquidity from public blockchains but transacting or swapping privately.” This innovative method allows users to benefit from the liquidity of public networks while maintaining privacy.

The Path to Adoption

The path to widespread adoption of privacy-preserving DeFi involves not only technical improvements but also strategic marketing and community building. Anndy Lian highlighted the importance of creating demand: “If you don’t have users, you don’t have liquidity. If you don’t have liquidity, you have nothing.” Building a strong community and generating excitement around privacy features are crucial steps toward achieving critical mass.

Carter Woetzel added that the race between privacy-first projects and traditional DeFi platforms integrating privacy features will be pivotal. “The Uniswaps of the world are going to start adding in privacy features,” he noted, suggesting that the first to successfully combine privacy with liquidity and user-friendliness will gain a significant advantage.

The Future of Privacy-Preserving DeFi

Looking ahead, the panelists were optimistic about the future of privacy-preserving DeFi. Adam Gagol predicted that “the proof generation time for the majority of use cases will stop being the topic of conversation because it’s going to be low enough to be actually useful.” As technical barriers diminish, the focus will shift to broader adoption and integration with existing financial systems.

Anndy Lian emphasized the need for collaboration and integration with larger platforms. “Instead of them creating that demand, the real true blue privacy guys should go there and say, ‘Hey, can we integrate? Can we do something together?'” By partnering with established players, privacy-focused projects can leverage existing networks to reach a wider audience.

Conclusion

The DeCC Day X Shielding Summit highlighted both the challenges and opportunities in the realm of privacy-preserving DeFi. As the panelists discussed, the road to adoption is fraught with technical, regulatory, and market challenges. However, with innovative solutions, strategic partnerships, and a focus on user experience, the future of privacy in DeFi looks promising. As Carter Woetzel aptly summarized, “Private DeFi is good. Can we find the demand and do it before someone else integrates privacy with large-scale distribution?” The race is on, and the stakes are high.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Ethereum’s Evolution: Exploring the Impact of EIP-7781

Ethereum’s Evolution: Exploring the Impact of EIP-7781

Ethereum has consistently been a leader, driving forward the development of decentralized applications and smart contracts. The recent introduction of Ethereum Improvement Proposal 7781 (EIP-7781) by Ben Adams, co-founder of Illyriad Games, marks a significant moment in Ethereum’s ongoing evolution. This proposal, if approved, aims to reduce block times from 12 seconds to 8 seconds, adjust the latency of rollups, and increase the capacity of blobs. These changes could have a profound impact on Ethereum’s scalability, efficiency, and user experience.

Breaking Down EIP-7781: A Technical Perspective

EIP-7781 is a comprehensive proposal that addresses several key challenges facing the Ethereum network. At its core, the proposal seeks to cut block times from 12 seconds to 8 seconds. This reduction is expected to increase Ethereum’s mainnet throughput, allowing more transactions to be processed in a shorter period. This is crucial as Ethereum strives to meet the growing demand for decentralized applications and services.

The proposal aims to increase the latency of rollups, a layer-2 scaling solution that aggregates multiple transactions into a single batch to reduce congestion on the mainnet. By enhancing rollup latency, EIP-7781 seeks to make these layer-2 solutions more efficient and appealing to developers and users.

Another key aspect of the proposal is the expansion of blob capacity. Blobs are temporary data structures designed to reduce layer-2 network fees by optimizing data storage and retrieval. By increasing blob capacity, EIP-7781 aims to lower transaction costs, making Ethereum more accessible to a wider audience.

Enhancing Scalability

One of the most promising aspects of EIP-7781 is its potential to enhance Ethereum’s scalability. As the network continues to grow, scalability has become a critical concern. The current 12-second block time, while efficient, can still lead to congestion during periods of high demand. By reducing block times to 8 seconds, EIP-7781 could significantly increase the number of transactions processed per second, alleviating congestion and improving the overall user experience.

This increase in throughput is particularly important as Ethereum competes with other blockchain networks that offer faster transaction speeds. For example, Solana, a high-performance blockchain, boasts block times of around 400 milliseconds, enabling it to process thousands of transactions per second. While Ethereum’s proposed 8-second block time may not match Solana’s speed, it represents a substantial improvement that could help Ethereum maintain its competitive edge.

Balancing Security and Speed

While the potential benefits of EIP-7781 are clear, it’s important to consider the potential trade-offs. One major concern with reducing block times is the impact on network security. Shorter block times can increase the risk of orphaned blocks, which occur when two miners solve a block simultaneously, and only one block is added to the chain. This can lead to wasted computational resources and potential vulnerabilities.

To mitigate these risks, Ethereum developers must carefully balance the desire for increased throughput with the need to maintain robust security protocols. This may involve implementing additional measures to ensure the network remains secure even as block times are reduced.

The Role of Layer-2 Solutions

EIP-7781 also highlights the growing importance of layer-2 solutions in Ethereum’s scaling strategy. By increasing rollup latency and boosting blob capacity, the proposal aims to enhance the efficiency of these solutions, making them more attractive to developers and users.

Layer-2 solutions, such as Optimistic Rollups and zk-Rollups, have become essential components of Ethereum’s scaling roadmap. These solutions allow for off-chain transaction processing, reducing the load on the mainnet and enabling faster, cheaper transactions. By improving the performance of these solutions, EIP-7781 could help Ethereum scale more effectively, accommodating the growing demand for decentralized applications and services.

Economic Implications: Reducing Transaction Costs

One of the most appealing aspects of EIP-7781 is its potential to lower transaction costs on the Ethereum network. High gas fees have long been a pain point for Ethereum users, particularly during periods of high demand. By increasing blob capacity and optimizing data storage, the proposal aims to reduce layer-2 network fees, making Ethereum more accessible to a broader audience.

Lower transaction costs could have far-reaching economic implications, encouraging more users to participate in the Ethereum ecosystem and driving the adoption of decentralized applications. This, in turn, could lead to increased demand for Ether (ETH), the native cryptocurrency of the Ethereum network, potentially driving up its value.

Community Reactions and Developer Insights

The introduction of EIP-7781 has sparked lively debate within the Ethereum community. Pseudonymous developer Cygaar described the proposal as the “first huge” step toward improving the base layer of the Ethereum network.

This sentiment reflects the growing recognition of the need to enhance Ethereum’s scalability and efficiency to meet the demands of a rapidly evolving blockchain landscape.

Not all community members are convinced of the proposal’s merits. Some critics argue that reducing block times could lead to increased centralization, as only the most powerful miners may be able to keep up with the faster pace. This could potentially undermine the decentralized ethos that underpins the Ethereum network.

To address these concerns, it is crucial for Ethereum developers to engage in open dialogue with the community, soliciting feedback and addressing potential risks. By fostering a collaborative approach, the Ethereum community can work together to ensure that EIP-7781 is implemented in a way that maximizes its benefits while minimizing potential drawbacks.

Looking Forward: The Future of Ethereum

As Ethereum continues to evolve, proposals like EIP-7781 play a critical role in shaping the network’s future. By addressing key challenges related to scalability, efficiency, and cost, this proposal has the potential to position Ethereum as a leading platform for decentralized applications and services.

The successful implementation of EIP-7781 will require careful consideration of the potential trade-offs involved. Balancing the desire for increased throughput with the need to maintain robust security protocols will be essential to ensuring the long-term success of the Ethereum network.

The proposal underscores the importance of layer-2 solutions in Ethereum’s scaling strategy. By enhancing the performance of these solutions, Ethereum can better accommodate the growing demand for decentralized applications, driving adoption and fostering innovation.

In conclusion, EIP-7781 represents a significant step forward for Ethereum, offering the potential to enhance scalability, reduce transaction costs, and improve the overall user experience. As the Ethereum community continues to debate the merits of this proposal, it is essential to engage in open dialogue, soliciting feedback and addressing potential risks. By doing so, Ethereum can continue to evolve, maintaining its position as a leading platform for decentralized innovation in the years to come.

 

Source: https://www.securities.io/ethereums-evolution-exploring-the-impact-of-eip-7781/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Leadership Thought: Exploring Stablecoins and Their Role in Crypto Payments

Leadership Thought: Exploring Stablecoins and Their Role in Crypto Payments

Stablecoins have emerged as a pivotal component, offering a bridge between the volatile nature of digital currencies and the stability of traditional fiat money. Anndy Lian, a best-selling book author, and Tran Hung, CEO of UQUID, explore the adaptability of stablecoins in crypto payments and their potential to revolutionize the financial landscape.

Stablecoins are digital currencies pegged to a stable asset, such as the US dollar, to minimize price volatility. As they become integral to the crypto ecosystem, understanding their impact on finance and daily transactions is crucial. This episode brings together two thought leaders to discuss the current state and future potential of stablecoins in the world of payments.

The Role of Stablecoins in the Cryptocurrency Ecosystem
Anndy Lian emphasizes that stablecoins serve as a crucial element in the cryptocurrency ecosystem, acting as a stable medium for transactions. They provide a familiar denomination for users, akin to the US dollar, facilitating easier and more understandable transactions. Stablecoins also encourage broader adoption of cryptocurrencies by offering a less volatile alternative for payments and investments.

Tran Hung highlights the impact of stablecoins in emerging markets, where fiat currencies often face devaluation. Stablecoins offer a reliable store of value, allowing users to preserve their purchasing power. In UQUID’s ecosystem, stablecoins have become a preferred payment method, enabling users to make purchases without worrying about currency fluctuations.

Stablecoins and Cross-Border Payments
Stablecoins are revolutionizing cross-border payments by offering faster, cheaper, and more transparent transactions compared to traditional methods. Tran Hung notes that stablecoins enable instant settlements, reducing the time and cost associated with cross-border transactions. This transparency and efficiency make stablecoins an attractive option for global commerce.

Anndy Lian adds that the transparency of blockchain technology enhances the security of cross-border payments. Transactions can be easily tracked and verified, providing an additional layer of security. Moreover, the stability of stablecoins compared to other cryptocurrencies makes them a preferred choice for international transactions.

The Future of Stablecoins and Central Bank Digital Currencies (CBDCs)
As central banks explore the development of their own digital currencies, the relationship between stablecoins and CBDCs becomes a topic of interest. Anndy Lian believes that stablecoins and CBDCs can coexist, serving different purposes. While stablecoins facilitate quick and low-cost transactions, CBDCs can act as a stable store of value within domestic markets.

Tran Hung agrees, noting that CBDCs are likely to operate on private blockchains, focusing on local transactions and government-related payments. In contrast, stablecoins, built on public blockchains, offer global accessibility and can be used across borders. This distinction allows both forms of digital currency to complement each other in the evolving financial landscape.

The Dominance of USDT in the Stablecoin Market
USDT, or Tether, has maintained its dominance in the stablecoin market due to its first-mover advantage and widespread adoption. Anndy Lian attributes USDT’s success to its early entry into the market and its ability to capture significant liquidity. Despite controversies, USDT has established itself as a reliable and widely used stablecoin.

Tran Hung emphasizes the trust that users have in USDT, particularly in emerging markets where stablecoins offer a solution to currency devaluation. The liquidity and accessibility of USDT make it a preferred choice for both individual users and large institutions.

The Future of Crypto Payments
Looking ahead, both experts envision a future where stablecoins play a central role in crypto payments. Anndy Lian hopes to see a diversification of payment methods, with other cryptocurrencies gaining traction alongside stablecoins. He believes that embracing a variety of digital currencies can drive further adoption and innovation in the crypto space.

Tran Hung sees stablecoins as a gateway to broader cryptocurrency adoption, particularly in regions with unstable fiat currencies. He anticipates that stablecoins will continue to gain popularity, offering a stable and efficient payment method for everyday transactions.

Conclusion
Stablecoins are not just a trend but a transformative force in the world of payments and commerce. From enabling cross-border transactions to providing a stable store of value, stablecoins are reshaping the financial landscape. As we look to the future, the continued evolution and adoption of stablecoins will play a crucial role in driving financial inclusion and innovation.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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