Forecast 2021: The New Landscape of DeFi and Public Chains

On December 17, Cointelegraph Chinese held an online interview dialogue column HUB, with the theme "Forecasting 2021: The New Landscape of DeFi and Public Chains," inviting Findora's Chief Product Officer CPO Henry and Chief Director of the Findora Foundation Paul Sherer as guests for this event.

Cointelegraph Chinese HUB is an online interview column initiated by Cointelegraph Chinese. It focuses on leaders in the blockchain and cryptocurrency industry, discussing the development opportunities and challenges in current industry segments, as well as how companies can break through the industry status quo and lead the future.

The interview was hosted by Cointelegraph Chinese CCO Ting Peng, with Findora's Chief Product Officer CPO Henry and Chief Director of the Findora Foundation Paul Sherer as guests. The discussion covered topics such as the background of entering the blockchain field, open finance and DeFi, Findora's partners, and predictions for DeFi.

Guest Highlights:

Henry: In the future, privacy will definitely be a necessary path for finance and blockchain to enter the mainstream. Findora has the best zero-knowledge proof team in the world. Findora mainly uses modern cryptographic zero-knowledge proofs and ZK Rollup technology to provide the privacy technology necessary for inclusive finance.

Paul Sherer: As the number of users grows, hundreds of thousands of people trying to develop and use a single blockchain will quickly occupy this market, while the current architecture cannot scale. So we need a way to solve the scalability issues currently present in blockchain.

Henry: DeFi products allow people from all over the world to participate in some financial activities in a peer-to-peer manner, without relying on traditional banks as intermediaries.

Paul Sherer: DeFi is clearly the cornerstone of unlocking opportunities in the early cryptocurrency market. We will build a private scalable network to support the DeFi ecosystem we want. What we need to do is to keep DeFi developers away from this complexity.

Here is a summary of the interview:

T: Welcome Paul, welcome Henry. Please introduce yourselves briefly.

P: I'm glad to be here. I graduated from Stanford University's Graduate School of Business. There, I met another co-founder of Findora, John Powers, and we collaborated on researching internet security and infrastructure. Later, I entered the capital markets.

H: Hello everyone, I'm Henry, the CPO of Findora. I previously worked as a product manager at Facebook and was an early investor. I graduated from Duke University with a degree in Electrical Engineering and Computer Science and Finance. I first encountered blockchain in college, where two seniors inspired me: one was Fred, the co-founder of Coinbase, who after working as a trader at Goldman Sachs, founded Coinbase and often returned to Duke to give talks on blockchain and digital currency. Many students from the computer science and engineering departments became interested in this technology. The other was a professor at Duke's business school named Campbell Harvey, who taught courses on cryptocurrency investment and encouraged students to buy BTC. Many of us bought BTC for the first time after his lecture in 2015. He released videos supporting blockchain and digital currency as early as 2013 and 2014. After graduating, I worked as a product manager at LinkedIn and Facebook, developing AI and big data products, and delving into blockchain technology. At Facebook, I felt that many privacy technologies could bring about transformation in the future, especially in the field of open finance. We believe that privacy will be a fundamental right in a civilized society, which is also part of Findora's vision.

T: How did you transition from being a product manager at Facebook and LinkedIn to a newer field? What made you decide to enter the blockchain space?

H: While working at these internet giants, especially at Facebook, I often saw issues related to data privacy, including challenges faced by foreign giants in social networks, e-commerce platforms, advertising platforms, and big data platforms. I felt that privacy technology in blockchain, especially zero-knowledge proofs, could protect user privacy, so I decided to continue developing in this industry.

T: Can you introduce how Findora uses blockchain technology to impact future finance?

H: Sure. Findora mainly uses modern cryptographic zero-knowledge proofs and ZK Rollup technology to provide the privacy technology necessary for inclusive finance. We believe that privacy will definitely be a necessary path for finance and blockchain to enter the mainstream. Findora has the best zero-knowledge proof team in the world. In terms of blockchain performance and TPS, we have the best ZK Rollup technology, which ensures that DeFi applications on this public chain can receive excellent privacy protection. At the same time, we will provide some auditability because the auditability of finance and privacy are actually two extremes, but we hope to find a very good balance between the two. This is why we believe that zero-knowledge proofs are a very good way of cryptography and privacy computing, as they can provide selective disclosure, especially in terms of regulation and auditing, which can bring significant momentum for blockchain to enter the mainstream.

T: Paul, how did you enter the blockchain and cryptocurrency market, and how did you decide to join Findora?

P: Two main factors led me to enter the crypto market. I worked in the capital markets in Silicon Valley for 30 years, primarily dealing with initial public offerings. This made me understand the value of open markets; the more buyers there are, the more enthusiasm there is for stocks, and the more exciting the stock issuance becomes. Today, with the internet, I can use a mobile browser anywhere in the world and connect and interact with others simultaneously. Applications can run independently on the network. These two factors—capital markets and the internet—led me to the crypto market. So, you will find that the crypto market is trying to leverage these networks to facilitate financial transactions. No one has considered building an open financial infrastructure, which is the most interesting thing to me, so I joined Findora.

T: Henry, can you introduce what open finance is? What is its relationship with DeFi?

H: DeFi (Decentralized Finance) refers to the ecosystem of protocols, applications, and tools that rebuild traditional financial products outside the traditional financial system. DeFi solutions are not provided by traditional banks but are built using some open-source software and open networks. Therefore, the essence of DeFi products is transparency and openness to anyone who can connect to the internet. DeFi products allow people from all over the world to participate in some financial activities in a peer-to-peer manner, such as consumption, lending, borrowing, and trading, without relying on traditional banks as intermediaries. Findora can be likened to building a high-speed network for open value exchange, primarily applied in DeFi and fintech. We want to create a great evolution of an open-source business model, where the biggest characteristics of blockchain are poor scalability and strong privacy. When exchanging information and processing data, there will be significant issues. We hope that everyone who can participate in our public chain can enjoy the dividends brought by Findora's growth. From a technical perspective, users can invest and trade freely without isolating their privacy.

T: Why do you say that a transparent blockchain is ineffective for finance?

H: Cryptocurrencies are becoming a mainstream financial asset, and most regulations will want to regulate such assets. The modern cryptographic technology used by Findora can build cryptographic transparency, allowing anyone to verify that a transaction is real. Apart from the two parties involved in the transaction, others do not know the transaction details. Zero-knowledge proofs are carefully designed to be unbreakable by any computer, ensuring that private transactions are not compromised, manipulated, or deceived. This way, we can ensure a perfect combination of finance and blockchain while protecting user privacy.

T: What kind of interaction will Findora's token have with non-privacy tokens like Ethereum and Bitcoin in the future?

H: From a technical perspective, in the future on this public chain, we will not store users' private information, such as identity information or transaction amounts. What we store are some mathematical proofs and zero-knowledge proofs that perfectly prove that these transactions are compliant and reasonable, but apart from the two parties involved in the transaction, no one else will see the content of this transaction.

T: Can you introduce Findora's programming language, Discret?

H: Using the domain-specific language "Discret" developed for Findora, users can write asset protocols and establish smart contracts that are built for predictability and static analysis. "Discret" is quite different from Ethereum's Solidity, but it focuses on covering the functionalities required for financial applications. One of the design goals of Discret is to integrate zero-knowledge proofs, as it is the foundation for most privacy and compliance guarantees in Findora. To achieve this, asset protocols are directly compiled into circuits and then combined with zero-knowledge compilers to create confidential asset protocols and smart contracts. In short, you can start with the Discret language, which can be compiled into circuits, then into zero-knowledge proof systems, which can be verified by the public.

T: Paul, what aspects of public chain development are you focusing on in the future?

P: My focus is on scalability and privacy issues. We can clearly see that as the number of users grows, hundreds of thousands of people trying to work on a single blockchain will quickly occupy this market, while the current architecture cannot scale. We need a way to solve the scalability issues currently present in blockchain. Findora can provide a highly scalable network for millions of users to transact. What we want to do is open this network and expand it, but that has not yet been realized. This is worth considering. It provides opportunities for transactions, financing, payments, and supply chains.

T: Who is qualified for auditing, or the identity verification is very important.

P: Auditing is very important. The audit we want is that you know I am authorized, but I do not disclose my specific identity. If I tell you who I am, you would find my email address, my geographic location, and ultimately personal data through my phone number, which is not a good thing for me. So I wouldn't use such a network. Now, if you want to know my geographic location, you need to know that I am authorized, and I can prove it to you. But I won't give you my personal information. This is done anonymously. You are meeting the requirements to ensure the security and integrity of your application, network, and membership. But you cannot use other metadata to find me, or it will compromise my privacy. Now I am an anonymous participant in a protected secure network.

T: You believe this is a win-win for both governments and individuals seeking information.

P: Suppose you run a website, a store, or an e-commerce site, and you want to offer discounts to members. You do not need to know which member they are, but you need to ensure they are your member. Otherwise, you are telling us this is not an audit. Auditing usually refers to government agencies conducting anti-money laundering checks on the currency you use, which is a very narrow definition. What we are talking about is just a small part of e-commerce; we are talking about doing something very exciting with your members, giving them credit, giving them discounts, but they do not want to tell you who they are. If you must know their specific identity, they will not give it to you because they know that identity can be stolen and misused. This is a limitation. As you said, if this is a trusted network, you can leverage this network to benefit yourself and them. You must provide protection from an architectural perspective, rather than hoping they will not face security threats.

T: What is the current development progress of Findora, especially in the financial applications for small and medium-sized enterprises? Can you share more about your collaborations?

H: Our testnet was launched in August this year, and now many B-end developers, including technical developers, are building applications on our testnet. For example, we are collaborating with large cloud service companies to create zero-knowledge proof ledgers, and we are also working with some large banks and financial institutions to develop some privacy backends. We will have more announcements in the future. Currently, we can say that we are collaborating with many large tech companies, financial institutions, and banks.

T: Paul, I am curious about the auditing issue and how companies adapt to and utilize privacy protection technologies. Do you have anything to add regarding Findora's partnerships?

P: I am the head of Findora's Advanced Research Center. The world believes that partnerships are our focus in the cryptocurrency market. Enterprises are the users of the technology we can develop. Therefore, we are building an open-source technology library, and we have the best talent in the crypto field. In the future, we hope to support all advanced research worldwide. We are focusing on academic institutions and individuals. We are talking to top economists who are thought leaders. Now we see that they have made significant achievements in climate science and public health. As Henry mentioned, these applications are broad. The large-scale development of decentralization is very exciting, and these partnerships are long-term. We hope to collaborate with the best talents.

T: What is your prediction for DeFi in 2021?

P: DeFi is clearly an opportunity in the early cryptocurrency market and has already seen some use cases. DeFi is a very open community. We are pleased to see the developer community continue to grow. I see the development of other networks. The internet we see now has done a lot for us; it is like three people sharing a printer, which seems very simple. This is what DeFi looked like in 2020.

T: What do you mean by three people sharing a printer?

P: It is the first application of the internet. What we see now is a world interconnected by applications and shared streaming. It comes from a simple concept of an application to share data among three people. Each of these simple applications is interconnected. Three printers connect to the next office, the next office connects to the next building, and the next building connects to the entire building. Then you can develop applications because you have millions of users developing applications on it. I think today's DeFi market is in the same situation. We do not overcomplicate things. The original early applications are growing; they are very simple to use and easy to understand. It is exciting to see such a start. I hope 2021 will be the beginning. I am seeking interoperability. Can one application be compatible with another, whether from the same or different fields? We see significant changes. If you can achieve interoperability, you truly begin to unlock the value of the use cases you see. We intend to provide scalability and privacy for these networks because I do believe that privacy will hinder our development to some extent.

T: Henry, what is your prediction for DeFi in 2021?

H: DeFi will definitely be a very important theme for blockchain in the future. I believe that for DeFi applications, users will pay great attention to their user experience and privacy. In terms of user experience, users only care about what value DeFi applications bring to them. They do not particularly care about what the infrastructure looks like; they only focus on the value this product will bring. Privacy becomes even more important. Because now users are very concerned about their privacy and data privacy, a large portion of people in the world cannot access normal financial infrastructure because some cannot use these banking systems. The concept of DeFi is very relevant to these users because DeFi provides them with an allowed financial solution. As long as you have a smartphone and access to these networks, you can obtain these financial services. We believe that in the future, more users will seek their financial autonomy and a new freedom in the DeFi space.

T: If the DeFi boom continues in 2021, how will public chains adapt to this change, Henry?

H: Findora will participate in DeFi in two ways: 1. Findora provides ZK Rollup and confidential transaction capabilities for existing DeFi applications on Ethereum, so that DeFi applications running on Ethereum can operate better, faster, cheaper, and achieve more functionalities that cannot be realized without privacy; 2. Based on cross-chain and verifiable computing technology, any Ethereum-based asset can be atomically transferred and traded on Findora. We can provide scalability and cost advantages for applications built directly on our platform.

Confidential DeFi applications include a range of new DeFi products: Dark Pool Dex (allowing secret large-scale encrypted transactions) and confidential FX pools (allowing confidential cross-border remittances), to name a few. After the mainnet launch, we will release them as soon as possible. The technologies we use to build privacy-preserving definitions include Bulletproofs, Dark Compiler, Supersonic, Plonk, advanced cryptographic signatures, etc. The Zei cryptography library built by Findora is one of the most advanced and comprehensive Rust cryptography libraries in the world.

T: Paul, if DeFi continues as you predicted in 2021, what impact will the public see?

P: If you see the potential uses of DeFi, you will be excited. It is still early; DeFi itself is very complex and fragile. We will build a private scalable network to support the DeFi ecosystem we want. What we need to do is to keep DeFi developers away from this complexity. They do not want to deal with interoperability, scalability, and privacy issues. They want to develop their applications. We hope they can think more closely about user needs. I want to help users anywhere. What we want to do is to keep the DeFi developer community focused on user aspects. I believe DeFi is truly the future we all want. A simple application can unlock financial potential, and I need to maintain credibility to purchase things for rebates and exchange tokens. We want to support DeFi research teams, practitioners, and anyone who wants to help existing traditional banks, financial institutions, or emerging user groups as much as we can. We see them working hard to support users worldwide, and the scalability and privacy of all Findora applications will benefit millions of users in the future.

T: Henry, do you have anything to add regarding Findora's role in DeFi?

H: Findora actually aims to empower the DeFi ecosystem and support the DeFi applications on the market, helping to provide some privacy features, assisting them in conducting private transactions, and helping them scale.