Co-Founder of Manta Network: The Role of Privacy in DeFi
About the Author – Tim Fries
Tim Fries is the co-founder of The Tokenist. He holds a Bachelor of Science degree. He holds a BS in Mechanical Engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim was a senior researcher in the investment team in RW Baird's US private equity arm and was also a co-founder of Protective Technologies Capital, a firm investing in sensing, protection and control solutions.
As an early-stage project, Manta Network positions itself as a “privacy-preserving” DeFi stack utilizing zero-knowledge proofs. The protocol is designed to facilitate transactions with reliably guaranteed anonymity and a degree of cross-chain interoperability.
Manta has come under the spotlight after announcing a $1.1 million funding round led by Polychain Capital. These funds will be used to build MantaSwap - a decentralized exchange (Dex) designed to protect user privacy.
Shumo Chu is the CEO and co-founder of Manta Network and a professor of computer science at UC Santa Barbara. Recently, he was a guest at The Tokenist to discuss the details of Manta Network – how the protocol of Manta Network realizes the assistance of anonymity, how the technical level supports the work of the protocol, and the role of Manta Network in DeFi, etc.
Tokenist: Hello Shumo, thank you for taking time out of your busy schedule to accept our interview as a guest. We are eager to learn all the details about Manta Network as a project that is rapidly growing in the market. We think Manta is doing a lot of really cool things when it comes to user transactions and privacy. But before we dive into that, I want you to start us off with a quick introduction to Manta. Please tell us what Manta Network is?
Shumo: Manta Network is the first privacy-preserving DeFi stack built on Substrate and preserves zero-knowledge proofs. Manta includes a decentralized anonymous payment scheme that supports DOT and parachain assets (such as aUSD), and a decentralized anonymous exchange scheme for AMMs built with zkSNARKs.
Tokenist: What types of digital assets does Manta Network support? Will it eventually support anonymous ownership and transfer of synthetic assets?
Shumo: Manta will support DOT and standard parachain assets. We have seen many signs of bringing ERC20 assets into Polkadot in the industry. If these ERC20 assets can be successfully converted into parachain standard tokens, Manta can also provide support in this regard. We are also working on synthetic assets at the same time, and have developed several schemes for private synthetic assets. The work in this area is very interesting, but it also requires further research by our team.
Tokenist: How does Manta make a transaction anonymous?
andManta WorkflowandManta white paper。
Tokenist: Why is anonymity so important in DeFi? How does anonymity protect users and differentiate DeFi from traditional financial fields?
Shumo: Privacy is very important not only in DeFi but across the blockchain. We recently conducted a survey of over 400 respondents to understand their views on the state of on-chain privacy (mainly wallet address pseudonymization). Some 75% said they had hesitated or avoided making transactions in the past due to privacy concerns. In other words, on-chain privacy isn’t just something people are thinking about, it’s actually affecting user behavior. There are some other interesting stories to share, like, generating new wallet addresses to receive tokens, sending transactions through exchanges to obfuscate our wallet contents, etc.
Regarding DeFi vs. traditional finance, I don’t think privacy will separate the two; I think it actually provides a similarity — a user experience that most people are familiar with when using traditional financial services.
For example, if you want to view transaction history and account balances on a debit (bank) account, you must log into the bank account and enter a unique username, password, or email authentication or other form of two-factor verification code. Then, you might even have to answer some questions if you're logging in from your new IP address. You go through all these security checks just to prove that the user is you, and only after you pass all the checks successfully can you view your information. However, all this is not the case in the blockchain. In our survey, 90% of respondents admitted to snooping on other people’s wallet addresses to view their assets and transactions. This is also very human and common sense. But this is a serious, unresolved privacy violation that badly needs to be addressed. I think the difference between privacy in DeFi and traditional finance is that there is no authority that can violate the privacy of individuals in DeFi. In traditional finance, your bank can violate your privacy -- bank employees can access your information, view your data, etc.; on Manta Network (DeFi), no one but yourself can access your data.
Tokenist: There are currently some anonymous payment methods in the DeFi field, such as Zcash. What does Manta Network bring to DeFi that these other anonymous payment projects cannot?
Shumo: Regarding Layer 1 privacy solutions, the greatest value that Manta Network hopes to bring is interoperability. We intend to run Manta Network as a BYOT (bring your own token) system. For example, users can trade or exchange DOTs privately, and there is no need to change DOTs to other assets before using them.
Tokenist: Another attractive aspect of the DeFi space (and blockchain in general) is increased user access to financial services. However, many centralized exchanges are becoming increasingly regulated, limiting their user base and ultimately creating barriers to entry. Will True Anonymity Help Make DeFi More Accessible?
Shumo: Regulation and compliance may seem like a "bad name" for "blockchain", but the reality is that the community is very welcoming of regulated blockchain projects as an important part of the ecosystem. In fact, in our survey, many users prefer to use these exchanges precisely because of their regulated factor and the security that comes with it.
DeFi takes an automated approach to access. When combining DeFi with compliance, what we see is a financial system that can separate mass users from malicious users - where mass users can gain instant access to financial products and systems, while malicious users can be denied outside the gate. Today, the responsibility to keep malicious users out is a big responsibility in the decentralized world, but it does not mean that we should turn a blind eye to the consequences of this behavior and call it a "free market" Or "decentralization". DeFi makes financial instruments easier for users to access, and the anonymity function makes access to financial instruments without worrying about receiving unauthorized monitoring. Compliance lends sanctity to these financial instruments. We believe that DeFi, anonymity, and compliance can coexist.
Tokenist: Regulatory compliance was taken into consideration when building Manta's protocol? Is there a way to maintain anonymity (to protect users from bad actors) while also maintaining regulatory compliance such as KYC/AML (assuming regulators are not "bad actors")?
Shumo: I think I mentioned this in an earlier answer. We will take a proactive approach and explore all possibilities to protect our community and network. We want Manta Network to be a plug-and-play privacy tool to enhance the user experience of "good users" when performing on-chain operations. As an early project, we are still in the exploratory stage of exploring how to integrate compliance, so we do not yet know how to implement compliance, but we have worked with many of the world's top law firms (including Coinbase, Polychain, etc.) law firm) are working hard to explore together.
Tokenist: Manta's Decentralized Anonymous Exchange (DAX) protocol and Decentralized Anonymous Payment (DAP) protocol both use zero-knowledge succinct non-interactive proofs of knowledge (zk-SNARKs). What are the main advantages of non-interactive zero-knowledge proofs over interactive zero-knowledge proofs? Generally, the answers we hear will imply some similar transaction speed, that is, faster transaction speed, greater transaction processing capacity, and thus large-scale scalability. Does it look like this to you?
Shumo: For an interactive proof system, the prover and verifier need to interact for several rounds before the verifier can verify the proof. For blockchain applications, this poses several problems:
1. The client must always be online as long as there are verifiers, such as consensus nodes, who need to verify evidence
2. There must be a separate communication channel between the client and each consensus node
With non-interactive proofs, you only have to prove it once to prove that the proof is publicly verifiable. So, for most blockchain applications, you really need non-interactive proofs, which leads to better performance and usable scalability. Fortunately, non-interactive proofs are not that hard to implement, and you can apply the so-called "Fiat-Shamir transformation" to transform an interactive proof system into a non-interactive proof system for almost free.
Tokenist: Is it possible to provide a verifier with a verification that may appear to be correct but is actually false? How can the advantage ensure that this does not happen?
Shumo: No. More precisely, the probability is very small, less than 2^{-128}. This is a cryptographic guarantee based on zkSNARKs.
Tokenist: When transactions occur using zk-SNARKs driven by Manta, are certain metadata (such as the date/time of the transaction, etc.) recorded and made available to the public? If so, what data is logged?
Shumo: Actually, Manta does record metadata, for example, the approximate time when a transaction occurred in the blockchain. However, to a first approximation, the entire transaction event is encrypted, and leaking timing information is not critical in most cases (although there are still cases where leaking timing information has serious consequences).
Tokenist: Does the future of quantum computing pose a threat to zk-SNARKs and encryption.
Shumo: We will conduct some research on post-quantum zkSNARKs. In fact, our co-founder, Dr. Zhenfei Zhang, is a leader in this field of research. My understanding is that implementing post-quantum encryption is not difficult, and people now know how to do it. But under the current technical conditions, efficient post-quantum zkSNARK is still quite difficult. However, I am confident that this problem will be solved before quantum computers become a real threat. If you talk to any quantum computing person in private, they will tell you that quantum computers are still a long way off, despite some politically correct things they say in the media to advance the field. I totally understand this because sometimes it takes a little hype to move the field forward.
Tokenist: Can Manta's codebase be audited by a third party?
Shumo: Yes, we will have a third-party audit of the Manta code by a top security audit firm. In addition, we will also conduct security audits and tests internally.
Original link: https://tokenist.com/interview-manta-co-founder-discusses-the-role-of-privacy-in-defi/
