On 17 March 2023, Hi Block Alliance hosted its second virtual Demo Day. The Demo Day event received dozens of project applications for nine spots through our network of mentors and advisors. Thanks to our speakers who joined the roundtable panel and shared their deep thinking in the market!
TOPIC: Outlook and Strategies in 2023
SPEAKERS: Hunter Hu, Managing Director@North Beta Capital Victor Ji, Founder@Manta Network Dylan Kugler, Director of Global Ecosystem BD@Mina Foundation Aarif Kuang, Host@HiBlock
Q1: Could you briefly explain what zero knowledgeis?
Dylan Kugler: ZK allows an entity to prove to the rest of the world that they know certain information or that they have correctly completed a task without revealing the information or showing the details of the task execution. It is a significant and complex technology for blockchain advancement. Right now it’s used primarily for scaling purposes in Ethereum but we’ll also see new use cases for privacy, compliance, and attestation going forward. Mina is building an accelerator right now and finding tons of different use cases. It is an interesting, fascinating kind of cryptographic way of scaling and adding privacy elements to the blockchain. In the future, zero knowledge will be used to get enterprises on board by gathering Web2 data and providing a compliant onboarding process.
Q2: What kind of technology does ZK use within Mina Foundation? What makes the Mina protocol special?
Dylan Kugler: Mina is a L1 blockchain based on zero-knowledge proofs (“ZKP”). We decided to create a whole new protocol separate from Ethereum because they’re simply elements at the L1 level that is required from a SANRK perspective. Different types of ZK-EVMs are built on Ethereum because the opcode and bytecode associated with the L1 of Ethereum are not necessarily suited from a SNARK perspective. Mina has built zero-knowledge functionality at the smart contract level and has created a great tooling system to abstract away the complexity involved in building zero-knowledge applications. There’s no need to learn many domain-specific languages that are quite complex. At Mina, we use recursive ZK-SNARKs to create a proof of the Blockchain that is less than 22kB, allowing for interesting use cases from a decentralization perspective.
Q3: What makes ZK knowledge one of the leading technologies in infrastructure?
Victor Ji: We’ve been researching ZK since 2019 and building Manta for two years. ZK has two primary directions: scalability and privacy. These are the two major use cases for ZK. And we focus more on privacy. We don’t use ZK for scalability, we don’t need this to make our chain faster or cheaper, because our L1 is fast enough. Manta is a privacy layer 1, the transaction on Manta is faster and cheaper with privacy and we have two address systems: public and private.
ZK is the best technology to solve privacy issues. Because it can make the whole blockchain decentralized with privacy. If you are using TEE or other technologies, it can still be private, but it will still go through a black box which is not scalable enough to be decentralized.
Q4: What’s the purpose behind the creation of UPA and what are the latest developments?
Victor Ji: We initiated UPA and it’s not only for the ZK projects. Oasis Network, Manta network, Orchid and other projects are in the UPA. In general, there are a lot of ZK projects doing an amazing job. What we’ve been focusing on is to have builders and communities talk about what they think about privacy in the Web3 space, and how privacy products and infrastructure get mass adoption. Besides that, the most important thing is we collect all the resources for legal and compliance because every project has its legal counsel and compliance team. We collect all the resources to talk to regulations to get more impact on the regulation side. We not only aim to build the infrastructure to combat money laundering but also about human rights and new features for the empowered blockchain mass adoption. And if you build something for interbank transactions, it means you cannot do anything without privacy solutions.
Dylan Kugler: I want to echo one point that Victor mentioned about mass adoption. We want to build products that are at least on par with what we can build in Web2. Historically, Web3 has been held back. For us to become on par with Web2 and go beyond what is possible, we need an enabling tool like zero-knowledge. Otherwise, there’s no real way of bringing institutions on board. Many knowledge-proof platforms are using off-chain computation, which allows for delivering a fundamentally new capability within the crypto ecosystem. That should be our goal. This is a new iteration of crypto building off of what Bitcoin and Ethereum created. We have incredible projects being built on Ethereum and projects that are being built as layer ones.
Q5 : Which area of ZK do you focus more on?
Hunter Hu: I’ve been trying to find the future unicorn since as an investor. I’m still investing in the infrastructure of the ZK privacy companies, but I focused more on the actual needs. Many big financial institutions, such as HSBC, prefer to transfer their customers’ data anonymously at a lower cost. This is one example of the fundamental needs from the Web2 world for the mass adoption and mature products for the Web2 company should be provided. Moreover, income is also essential for the long-term development of ZK company.
Q6: Many people in Web2 are willing to step into Web3 with products such as smart wallets. Which vertical do you think would be the next hype?
Dylan Kugler: Broadly speaking in Web 3 infrastructure needs to become more productized and focus on more specific use cases in this next iteration of builders. In general, this will be staking the layers, data providers, aggregators, storage tooling, etc. As it relates to zero knowledge, I’m excited to see what kind of products are built from the privacy attestation side and that could be decentralized identifiers. There’s a lot of work that needs to be done in the zero-knowledge space and tons of opportunity trying to solve these bottlenecks which lie in the algorithm (circuit improvements) and computational complexity. The computational complexity leads to long proving times and is potentially costly as well. Finally, zero-knowledge proof requires several abstraction and tooling layers that need to be built.
Q7: Do you think the recent banking crisis will start to create a ripple effect? And how would this impact the industry?
Dylan Kugler: It is a relief that USDC is okay. The biggest negative is that banking relationships have been impaired in the crypto world, and there is a loss of liquidity. Global firms are probably joining in, and seeing the bitcoin narrative as a very stable source of an inflationary hedge or bitcoin remains tied in with the rest of the market. It’s not a great time for the broader economic environment but could potentially lead more people to decentralize finance and Bitcoin.
Hunter Hu: We’re waiting for government updates on regulations. Governments are anxious and planning to release more regulation policies to guide the industry. Due to the current situation, we’re also looking for more decentralized solutions for asset management and probably going to invest in some decentralized solution providers.
Q8: Do you have any advice for founders in terms of fundraising?
Hunter Hu: Firstly, it’s great to talk with more crypto native investors because they’re more focused on the Web3 space. But Web2 funds have other alternatives, and they have the cost for the investment. They can either invest in Web3 or traditional spaces such as energy. Most of them are conservative in the bear market at least at the beginning of the market. Therefore, it’s better to ask for advice from a more experienced pioneer. Secondly, a team with a solid background and the ability to consolidate products, of course, are crucial to the success of projects. You will see that diamond hands stand behind the best team and the best product.
Congratulations To All The Projects Who Pitched In HiBlock Demo Day On December 22, 2022, Hi Block Alliance hosted its first virtual Demo Day. Our team was proud to present our diverse… hi-block.medium.com
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