keyTango X Secret Network AMA with Guy Zyskind
Greetings Secret Network community! This AMA occurred on 5/26/2021 at 6:00 pm. (CST) in the keyTango community telegram with Guy Zyskind [Guy Zyskind / EnigmaMPC Founder & CEO] and the keyTango community. A special thank-you to everyone involved with the launch of the Catalyst bridge. -Secure Secrets
This AMA was a celebration of the official announcement of the Catalyst bridge integration with Secret Network — allowing users to earn yield in the Secret DeFi ecosystem with just ETH and Metamask. This integration provides DeFi users with access to liquidity mining programs on SecretSwap, starting with the sETH-sSCRT pool.
[Dan Danay / CEO at keyTango]: Hey guys, excited to have Guy join us for the AMA!
[ Dave / CM at keyTango]: Welcome everyone for the AMA with Secret Network, the new partner in our Catalyst Program. Let’s get this party going 🔥. In a practical way: What differences would there be between doing a transaction in any other network, for example Ethereum, and doing a transaction in Secret Network? What differences are there in the behavior and exposure of our data?
[Guy Zyskind / EnigmaMPC Founder & CEO]: From a user-perspective, everything feels pretty much like Ethereum. However, when your wallet interacts with a Secret Contract (=Smart Contract on SN w/ privacy), it encrypts all data, namely — inputs/outputs and the contract state itself. The network itself, or anyone observing the chain, can’t see your data, even when it’s being used.
In practice, this means that practically everything that happens in the network happens privately — whether it’s sending tokens, executing swaps in an AMM, or running a machine-learning algorithm on-chain. Things like NFTs can now have private properties (e.g., who the owner is, or how valuable that piece is), and the list goes on.
If you’re interested in the technical details, then under the hood, nodes in Secret Network receive the encrypted data and somehow need to compute over it (actually execute the transaction in the VM). The decryption keys for the data reside inside of each node’s secure enclave, which is a protected processing area that no one, including the machine’s host, can observe. This ensures that computations only occur inside of the enclaves and nothing leaks to the outside.
[ Dave / CM at keyTango]: Wow that sounds amazing! What network is Secret Network using and why?
[Guy Zyskind / EnigmaMPC Founder & CEO]: It’s a native blockchain. Under the hood it uses Tendermint and is one of several Cosmos chains like Terra and Binance Chain.
[ Dave / CM at keyTango]: Ok. I see, good choice 😁 How does Secret Network preserve privacy? Is this a problem for compliance?
[Guy Zyskind / EnigmaMPC Founder & CEO]: We’ve already discussed some of the technicalities of how Secret Network preserves privacy (data is encrypted end-to-end and revealed only in secure enclaves which do not leak the data to anyone, similar to how hardware wallets work and don’t leak the private key).
When it comes to compliance, we think it presents an opportunity. Privacy in Secret Network is much more programmable. For that reason, building selective disclosure mechanisms is easier. For example, Secret Tokens (or SNIP-20 — our privacy-preserving version of ERC-20 tokens) have a built in mechanism to create read-only viewing keys, which allow you to let parties you select to see your transaction history. This allows you to remain compliant while otherwise protecting your privacy.
[ Dave / CM at keyTango]: That is an interesting opportunity indeed. Looking at the secret app feature of Secret Network. What is the level of adoption? How many apps have been built on it? Can you give some examples?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Best stuff to talk about! We’re seeing amazing growth in terms of secret apps being developed. A good place to start at is: https://github.com/SecretFoundation/awesome-secret. There are currently multiple teams building on us, including Sienna who is building a privacy-preserving AMM and other DeFi products, and have just raised $11M+ to build exclusively on our network. Some other examples:
- A variety of SNIP-20 (i.e., privacy) tokens that were launched on our network and more are coming soon — $SSCRT, $SEFI, $SIENNA, $FATS and a couple of other that are launching that I can’t discuss yet.
- SecretNFTs and https://secrethero.es/ — a game utilizing privacy-preserving NFTs is out and extremely cool.
- Staking derivatives (i.e., liquid staking).
- Secret voting — basically, imagine you can do on-chain voting without revealing who voting to whom, which is closer to how actual elections are conducted in the real world.
- Secret Auctions and on-chain OTC sales
[ Dave / CM at keyTango]: That is a lot to look into. Thanks for that! The Secret Network ecosystem looks pretty complicated for a beginner. Where does one start to get introduced to it? Do we need to install a special wallet?
[Guy Zyskind / EnigmaMPC Founder & CEO]: The whole beauty of keyTango’s solution is that it abstracts away the need to understand or deal with Secret Network. That said, there are many reasons to use Secret Network. Since it’s a sovereign Cosmos-based chain, you should install one of the supported wallets. Personal recommendation is Keplr which is very similar to Metamask, but works with Cosmos chains.
[ Dave / CM at keyTango]: Our community read about the secret Ethereum bridge and wonders: Does your project transform a public ERC20 asset into a private/secret asset or does it create a clone of the same asset which is private/secret? If it’s the second option, then it means that the original erc20 asset will still be public?
[Guy Zyskind / EnigmaMPC Founder & CEO]: There’s a token version (sETH) on Secret Network that is private. Anyone can move from ETH on Ethereum to sETH on Secret Network using our bridge, similarly to how you wrap your BTC into wBTC in Ethereum.
[ Dave / CM at keyTango]: I got some more technical questions for you 😊 It is true that keyTango is here so we don’t need to know all this but it is still good to know! How are your smart contracts different from ethereum? What are their benefits? What technologies does a programmer need to know for development?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Go for it 🙂 They are very similar, but they are WASM-based and so right now you would need to develop in Rust. We have some examples and guides here: https://github.com/SecretFoundation/awesome-secret#reference-contracts
[ Dave / CM at keyTango]: What algorithms for data encryption do you use? Why did you choose them?
[Guy Zyskind / EnigmaMPC Founder & CEO]: We use AES-SIV to assist with the determinism required in a distributed network. We use a custom non-interactive ECDH version (using the public chain as a shared memory where you can post encrypted data) to provision secrets between nodes. How we use them is a bit more involved and the full spec can be found here — https://github.com/enigmampc/SecretNetwork/blob/master/docs/protocol/encryption-specs.md.
[ Dave / CM at keyTango]: Thank you for that amazing deep dive into the technicalities of Secret Network. Sounds like we will be great partners and keyTango is here to simplify the participation! Are there any forward-looking numbers that you would like to achieve with this liquidity mining pool?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Of course.. It gets deeper so I really recommend people who are interested read the spec above. This initial pool is a pilot, so numbers are not as important as a measure of success (as opposed to seeing this work in action). In the future, I hope this pool (and potentially others) could add tens or even hundreds of millions in liquidity. Currently, Secret Network has about $100M in bridged assets from Ethereum (https://bridge.scrt.network/tokens). Given that the UX that keyTango provides is 10x better, our hope is to see a significant boost in liquidity over time.
[ Dave / CM at keyTango]: That is great! Do you see these sort of programs also lasting through a bear market?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Yup. At least based on the little sample size we have (~two cycles in crypto), the people who stick around in bear markets are the heavier holders having a long-term view. For that reason, these people are more likely to park their liquidity in yield-bearing assets and look for the best opportunities to do so.
[ Dave / CM at keyTango]: That makes total sense that people will keep looking for opportunities! Talking about opportunity. Can you explain a bit more about the rewards that keyTango is tapping into with Secret Network?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Secret Network has one of the better yield farming campaigns out there right now (even if we’re putting aside the other benefits of using the network). Clearly I’m biased, but we’re actually yield farming as individuals ourselves because there aren’t so many other great opportunities that are sustainable. In keyTango’s case, they are tapping specifically into two SecretSwap pools that are earning around 150%+ APY, not including the extra rewards allocated uniquely to keyTango’s pool. The neat part is that from a user perspective, you only need to introduce single-side liquidity (ETH) and not worry about Secret Network at all.
[ Dave / CM at keyTango]: Yes! Great to know where we are tapping into 😀 A last question with a personal touch before we open up the floor for Q&A. How did Secret Network and keyTango get connected?
[Guy Zyskind / EnigmaMPC Founder & CEO]: Dan Danay and I go way back. We met at MIT and have been good friends since. I’ve had the pleasure of working together with him on several occasions. Also, I’m a big believer in keyTango’s vision and so I also personally invested in it.
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