Blockchain Privacy & FHE: The Need for Confidential Transactions

[00:00:00]If I walk up to you in the street and I told you, "Hey, I don't know you, but can you show me your bank account, please?" You probably wouldn't want to do that, right?

[00:00:08]>> But this is how blockchains work today.

[00:00:09]It doesn't make sense.

[00:00:11]>> Blockchains are not meant to be transparent. They're meant to be publicly verifiable, but it doesn't mean that everything has to be made public.

[00:00:21]And FH is solving exactly that problem.

[00:00:23]FH allows you to have public verifiability on an encrypted data that's on chain.

[00:00:30]And that's why it's such a big revolution is because it doesn't change the way blockchains work. It just adds privacy on top of existing blockchains.

[00:00:38]So, for example, if you're sending money to someone on chain, your balance is encrypted. The amount you're sending is encrypted. So, people don't know how much money you have, how much money you're sending, but it's still a smart contract running in Ethereum that is actually making a transaction. So this is actually incredible. Think about it a little bit like HTTPS but for blockchain transactions.

[00:01:00]>> And this is what Zama specifically is doing. Zama when we found out that we could apply this for blockchain, it was very clear to us that this was the big use case for FHE.

[00:01:09]>> Welcome to the latest episode of Dewan Global. Uh recently we witnessed the explosion breakthrough in blockchain privacy technology and the trend is crystal clear as small traditional finance players enter crypto. We are seeing that privacy isn't just nice to have is essential. Without robust privacy infrastructure the 100 trillion dollar sitting in traffic will never truly move on chain. H that's where Zana comes in which have brought privacy technology FG from the lab into the production. They have already processed over 1 million encrypted transactions on Ethereum's test net and mainet launch is right around the corner. Today we are very excited to have Ren Hindi, co-founder and CEO of Zama joining us to unpack privacy technology, Zama's vision and what it takes to bring the holy grail of cryptography to the real world.

[00:02:07]Welcome Rand.

[00:02:08]>> Thank you. Thank you for having me.

[00:02:10]>> Before we deep dive into Zama, introduce more about your career and your journey into crypto into cryptography.

[00:02:19]>> Of course, my name is Rand. I've been a developer since I was a kid. Built my first company as a teenager when I was 14 years old. Then after that did a PhD in artificial intelligence when I was 21. So that was back in 2007.

[00:02:34]After this I built one of the first AI company focusing on privacy called Snips which got acquired in 2019. And since 2020 I've been building Zama with my co-founder Pascal Pay who's one of the inventors of homorphic encryption. I'm also an investor. I invest in early stage biotech, crypto, AI companies.

[00:02:54]I've invested over 100 companies today and I've been in crypto specifically since 2013. So I think this is my fourth cycle. So you know, >> wow, real OG.

[00:03:06]>> Well, you know, when people on Twitter freak out because uh there is a a sudden crash of 20%, I'm like, you know, [laughter] >> nothing.

[00:03:19]Yeah. the same way as us.

[00:03:21]>> Yeah, I think you know it's at some point you get used to the uh to the craziness and volatility of crypto and you learn one thing that's very important is this technology blockchain is important for the future. And so it doesn't matter what happens in the short term as long as you're a long-term holder. And this is my strategy.

[00:03:38]Everything I do in crypto, I buy and hold. I never sell. I never trade. I never leverage. I just hold for as long as I can.

[00:03:46]>> Yes. And I'm very curious about your career found you began the privacy before the bullet chain your first company slips that's maybe 10 years ago.

[00:03:57]Yeah. My question is why choose privacy throughout your journey after the PhD.

[00:04:02]Was there a specific moment or event that made you realize that the critical importance of privacy technology?

[00:04:10]>> Absolutely. I started caring about privacy when I built my first company when I was 14 years old. That was in 1999. At the time, I built a social network with a friend of mine. And you know, when you build a social network, you realize how much data you have on people, right?

[00:04:29]>> I was looking at the data. I was like, "Oh my god." Like, if I wanted to, I could see everybody's messages. I could read all those private conversation.

[00:04:36]That doesn't feel right. you know, just because I'm the service provider doesn't mean I'm allowed to see people's private information. And so for me, it was very obvious already back then that privacy was going to become more and more of an issue as we started using more and more digital services. Uh so during my PhD, my thesis was on using artificial intelligence for genetic data and when you manipulate DNA, privacy is also very important. And so I was like, okay, so AI needs privacy, websites need privacy, so everybody needs privacy. I want to figure out a solution to that problem.

[00:05:13]And my whole life, everything I've built was actually one way or another incorporating privacy as a core element of what I did.

[00:05:24]>> Yeah, that's interesting because I saw your career um was sitting at the intersection of blockchain, AI, and then biology. like it's a really a broad range of u issues and topics.

[00:05:37]>> Yeah. Well, I mean actually privacy, biology, and AI are all the same thing.

[00:05:43]They're about data. Biology might not seem like it, but at the end of the day, when you look at DNA, when you look at your blood test, [clears throat] you're looking at data. You're analyzing data.

[00:05:53]So there's fundamentally no real difference in how you understand biology versus how you understand any kind of other complex data system. So I would say that my career has been about data and finding ways to analyze, use and protect the data >> and speaking about crypto actually privacy and the cryptography have been discussed like in every crypto cycle. So like Vitalik published three articles about ZK proofs and privacy on his blog in 2023 or long before though it felt like a niche discussion then but this cycle um feels very different even like recently NAO is now publicly talking about privacy and Zcash so there's some mania about privacy now so more and more people are joining the privacy conversation so what do you think is driving this shift and why has privacy become more important now? So is there something fundamentally different happening?

[00:06:57]>> I think I think so. Well, there are two things. First, I think Zama showed that privacy could scale for blockchain applications. So, I think you know the fact that Zama solved that problem made people realize that they can start using privacy technologies in everyday blockchain applications. But beyond that, I think the main driver is if you look at finance that's moving on chain, it's very obvious that you need confidentiality for most financial transactions. If your bank wants to use stable coins to hold your bank account money, well, clearly they need that to be private because, you know, they don't want everybody else to see your bank account. It doesn't make sense. If you're a trader at JP Morgan and you're managing billions of dollars of assets, you don't want your trades to be public because you're disclosing to everybody what your strategy is. So I think the reason why people care about privacy suddenly is not because they care about privacy is because they realize that without privacy and confidentiality there is never going to be mass adoption of blockchain. And I think this is really for me the turning point is up until this cycle there was no big adoption of blockchain. This is the first time that major institutions the serious players are entering the game and they need confidentiality. It's not negotiable.

[00:08:16]>> So without confidentiality there will be no mass adoption from the institution side.

[00:08:22]>> It's impossible. I mean think about what you do outside of blockchain. If if I if I walk up to you in the street and I told you, "Hey, I don't know you, but can you show me your bank account, please?" You probably wouldn't want to do that, right?

[00:08:35]>> But this is how blockchains work today.

[00:08:37]It doesn't make sense.

[00:08:38]>> Blockchains are not meant to be transparent. They're meant to be publicly verifiable, but it doesn't mean that everything has to be made public.

[00:08:49]And FH is solving exactly that problem.

[00:08:51]FH allows you to have public verifiability on an encrypted data that's onchain. And that's why it's such a big revolution is because it doesn't change the way blockchains work. It just adds privacy on top of existing blockchains.

[00:09:05]>> Yes, I totally agree.

[00:09:06]>> When we started the company uh 5 years ago, we didn't really know what we wanted to use homorphic encryption for.

[00:09:14]So maybe let me backtrack a bit and explain what FHE is. Mhm.

[00:09:18]>> So FHE fully homorphic encryption is an encryption technique where you can compute blindly on the encrypted data itself. So for example, if I want to use chat GPT today, I'm sending my data to OpenAI, they analyze it and they send back a response. If they're using FHE, I would send an encrypted query to Chad GPT. Openai does not have the key to see it, but it can still process the encrypted query and send an encrypted response that I can decrypt. So for me, it's the same service, but now the data is encrypted when I send it and during the processing. So it's encrypted end to end. So think of it as end to end encryption for any kind of online service that you're using. So why is that important for blockchain specifically? In the case of blockchain, it means that you can have smart contracts that operate on encrypted transaction and state. So, for example, if you're sending money to someone on chain, your balance is encrypted. The amount you're sending is encrypted. So, people don't know how much money you have, how much money you're sending, but it's still a smart contract running in Ethereum that is actually making a transaction.

[00:10:28]>> So, this is actually incredible. Think about it a little bit like uh HTTPS but for blockchain transactions.

[00:10:35]>> And this is what Zama specifically is doing. Zama, when we found out that we could apply this for blockchain, it was very clear to us that this was the big use case for FHE. And so we decided to build the Zama protocol to enable confidentiality using FHE on top of any existing public blockchain like Ethereum, Solana, Binance Chain, Tron and so on so forth. Yes, there are a lot of questioning also have many discussion on Twitter there are many private storage besides FH we have Z they have TE we have MPC could you explain a little bit more which is the strength or limitations for this each other terities >> yeah that's a very good question so Zama today you know we've looked at everything to be clear right you know I have 100 people in the company 37 PhDs Some of the best researcher in privacy in the world are working at Zama today.

[00:11:32]So we've looked at everything. You know, we're very pragmatic. You know, we use whatever is the right technology for the job. The reason why FHE is the best solution is it's secure, it's composable, and it's verifiable. FHE is secure even against quantum computers.

[00:11:50]So the data you're encrypting today and putting on chain cannot be broken by future quantum computers. So this is really important and if you look at something like TE's trusted enclaves they have been completely broken in the past six weeks two papers came out showing that Intel's implementation of TE was broken and every single blockchain that relies on T immediately was broken and it's not the fault of the blockchain it's the fault of Intel who messed up the implementation and Intel made an announcement saying they don't care because they consider that blockchain is not part of what TE's are supposed to secure. So Intel said do not use TE's for blockchain. It's a bad idea. So TE's for blockchain is basically dead at this point. Nobody's going to use it. MPC great technology.

[00:12:43]We use it in Zama for key management.

[00:12:47]However, when you use it for computation of the state is very complicated because MPC is hard to verify. So you're losing public verifiability of the encrypted state with MPC. FHE is publicly verifiable. Anybody can recomputee the FHE state and verify that is correct.

[00:13:07]This is very important. You know I mean in blockchain the number one thing is don't trust verify. And FHE today enables you to not trust and verify which is quite important.

[00:13:18]>> And finally ZK lots of people talk about ZK. ZK is a fantastic technology for scalability. However, the problem is that you cannot compute on ZK proofs.

[00:13:29]So, if I using ZK for transferring tokens privately, let's say Zcash for example, I can send money privately with ZK, but I cannot do anything else. I cannot stake my shielded Zcash. I cannot build DeFi on top of my shielded Zcash.

[00:13:45]FHC tokens are composable the same way a regular ERC20 token is composable. So you can have DeFi on top of confidential FHE tokens. You can have confidential swaps on top of FHE tokens. Anything you do with a regular token, you can do with an FHE token now. And so that's why people are excited about FHE is because it doesn't change the way blockchains work. It just adds confidentiality on top of existing blockchains like Ethereum, like Solana, like Bass, like Binance, like Tron and so on so forth.

[00:14:20]So it's verifiable and composable >> and secure which is you know it's not secure there's no point. [laughter] >> Yeah. So super clear.

[00:14:30]>> Yes. Super. And we just noticed that the Zarma acquired Ze company Trot.

[00:14:37]>> Yeah. We say announcement yesterday.

[00:14:40]>> Congratulations.

[00:14:41]>> Thank you. Thank you. I'm very happy about this one. The Kakarot team is one of the best ZK rollup team. And uh for us at Zama, we wanted to make sure that we were able to scale our protocol to support you know hundreds of thousands of transactions per second because if you want FHE to be used for global payments on chain, you need to scale to extremely high capacity. And so we acquired Kakarat literally because these guys are some of the best blockchain engineers and scalability engineers at the moment. So we're very happy about this acquisition is the first one that Zama did. First company that we acquired. Yeah. Really awesome.

[00:15:21]>> So you also combine FHE and Ziki technology to solve uh some of the scalability problems >> eventually. I think so. So what I told the Kakarat team is I'm like I don't care how you scale it. I just want you to scale it. [laughter] So you know at the end of the day what matters is we want 100,000 transactions per second. We don't care how we get there. That's the goal.

[00:15:44]We noticed that FHE is called a holy grail of cryptography. So also curious about it why has it only recently started to see practical applications and what kind of new use cases or adoptions will FHE uniquely unlock or enable?

[00:16:05]>> You know FHE is not a new idea. Uh people started working on it in uh 1972 I think. So you know it's been over 50 years of research >> 50 years of research f >> my co-founder Pascal Paet is one of the early inventors of FHE. He invented the first way to add encrypted numbers. It's called the pay scheme. Still very popular. People use it a lot still. But what was difficult before was three things. It was difficult to build FH technology that could be used for anything. Smart contracts, AI, databases. Nobody knew how to do something that was general purpose. It was very specific to some use cases. The second problem is it was very difficult to use as a developer. You needed to learn cryptography and understand how to, you know, change like all of the details. And finally, it was not very scalable in the early days. It took half an hour to make an FHE token transfer.

[00:17:01]So, you know, not very user friendly.

[00:17:04]Well, I mean, I guess Bitcoin takes tens of minutes, but >> most blockchain today, you know, people want things in less than one second. So, FH was not able to do that before.

[00:17:13]>> We solved those problems at Zama. We basically worked on a technology called TFHE, which allows you to have any kind of application in FHE. We can do AI in FHE. We can do blockchain in FHE. We can do databases in FHE. We can do medical data analysis in FHE. So there is no longer a limitation in what you can do with this technology. The second problem that we solved is developer experience.

[00:17:39]So today we've integrated FHE into existing developer tools. For example, if you want to build a confidential application on Ethereum, you write everything in Solidity just like any other smart contracts and you deploy that to Ethereum just like any other smart contract. So as a developer, you don't have to learn anything new. you just create your application and not worry about how things work in the background. So, we've solved the developer problem. And finally, performance. Today, Zama is about a thousand times faster than when we started the company 5 years ago. And the performance is improving by 10x every year, mostly due to better hardware now.

[00:18:24]So effectively for us at Zama, moving from CPU to GPU is going to get us to 1,00 TPS transactions per second, which is enough for every L2 and most of Sana.

[00:18:35]And moving from GPU to A6, so special hardware to accelerate FHE will get us to 100,000 TPS. So FHE now for ZAM is no longer a math problem. It's a compute problem. If we invest more money on better hardware to accelerate FHE, it will go faster and the addressable market will grow bigger. It's that simple. FH now is basically a compute problem just like AI, just like all these other things.

[00:19:03]>> That's great. I also check the graph on Zamas uh website. Apparently, I think it's close to the TPS of Ethereum mainet.

[00:19:13]>> Correct.

[00:19:14]>> Yeah. I think like three years later, the graph shows it's like uh a thousand times again compared to the previous thousand times. Wow, that's amazing.

[00:19:26]>> I mean, you know what? Actually, it's it's I had a discussion with Zama's investors. I looked at the original pitch that I did to my investors a few years ago, right, when we raised money the first time. And Zama has actually made more progress on performance than what I told my investors years ago. So even I did not anticipate how quickly FA was going to grow. Like you know is to tell you how good our team is. You know we've been exceeding anything that people expected. And and there's an important learning in this. A lot of the problems that people think are impossible to solve is just because nobody actually tried and nobody actually put together a team with the right resources to solve that problem.

[00:20:12]So Zama, you know, we're lucky in the sense that my co-founder is a very famous researcher. So he was able to attract all of the best researchers in the planet to work on this at Zama. And I was fortunate to find great investors who believed in the vision of FHE and who funded Zama before we had anything that worked. The first time I raised money, I told my investors, I will not have a business for at least three or four years and they still invested because they knew that this technology was important, >> right? So you know when people ask why do you need investors because of that because you need people to fund you until you can solve the technology and build the use cases. Zama today would not be here without the people in the company and without the investors to fund the research that led us to that.

[00:21:02]>> Yes. Yeah. We we also noticed that Zama has raised over 130 millions. Yeah. from the top. This is like Panta and Multicoin.

[00:21:14]>> Yeah, I think it's very inspiring.

[00:21:17]>> As I said, you know, I think it's these investors are some of the most successful investors in history. Uh Panta and Multicoin are basically I think the two most successful crypto investors period. Like I think like Panta did a thousandx return on their Bitcoin fund. You know, Multicoin made hundreds of X's on their fund with Salana. They invested in Salana at seed stage and they're still holding today and they're buying today. Actually, those investors are smart. Like they don't invest in companies unless they think that what the company does is absolutely huge and can completely change the market. And you know, of course, I believe that as a founder. I wouldn't be doing Zama if I didn't think that this could be a huge thing. But having investors like that believe and invest in Zama at very high valuations too, right? $1 billion valuation that shows you how big this technology can be, right? Like try to imagine it this way, you know, to to take again the HTTPS example. Okay, so what HTTPS does when you connect to a website, it's encrypting the data you're sending to the website and receiving back. What Zama does for blockchain is that we're encrypting transaction and state. So whenever you make a transaction on a blockchain, the transaction is encrypted. So in a way, Zama and HTTPS are similar in the way they function logically speaking. Imagine if every time someone connected to a website, you'd charge them a fraction of a cent.

[00:22:47]That would be a pretty good business.

[00:22:49]And that's what Zama is actually doing.

[00:22:50]>> That's um how Zama will generate revenue.

[00:22:55]>> Yeah. We simply charge every time you encrypt and decrypt data, you have to pay a small fee to the Zama protocol.

[00:23:01]>> And you guys call it HTTP uh ZT.

[00:23:06]>> Yes. Yes. Well, you know.

[00:23:08]>> Yeah. I think we can talk more about Zama. Yeah. Could you introduce Zama in one sentence?

[00:23:15]Yeah. To a grandma or grandpa.

[00:23:19]Uh so Zama adds a layer of confidentiality to existing public blockchains like Ethereum and Solana. It allows you to have confidential tokens that you can use in confidential DeFi for confidential payments and anything else that you're doing on public blockchains today.

[00:23:36]>> Yes. So is it A1 or L2?

[00:23:40]>> It's not a new L1 or L2. Zama sits on top of existing L1's and L2s. So for example, if you have stable coins on Ethereum, you can convert them to confidential stable coins and you can now use them for confidential payments, confidential transfers, confidential salaries, or anything else you want to do. You don't need to bridge your assets to a new chain. You don't have to do anything else than just wrap them into a confidential version wherever you are today. And that's really important for us. There are too many L1's and L2s honestly, right? What we want is to solve confidentiality on existing ones.

[00:24:18]Ethereum is fine. Salana is fine. Base is fine. Tron is fine. These are good infrastructure, good L1's and L2s. We don't need to add a new one just for privacy. Privacy is not something that you that you want to have in a small environment. Privacy is something you want everywhere. And that's what Zama is doing. You know, we sit on top of existing chains. So it's compatible or you can say it's integrated with all kinds of public blockchains like EVMs or SVMs.

[00:24:47]>> So we are launching on Ethereum first uh then other EVM chains uh early 2026 and Solana is planned for the second half of 2026. Last time uh in Singapore I checked the use case like sending stable coins then you can uh in the demo uh I see that the the balance is not shown in the screen but you you can still know the A uh transfer money to B like only hiding the balances. So it's very different experience compared with like um >> ZK tornado cash or yeah ZK uh products >> is the opposite actually. Um >> when you're using ZK you're hiding the identity of the people transacting. So you don't know who sent money to whom but you can usually see the amount. In the case of FHE you're not hiding the identity in the trace you're hiding the amount itself. So a good analogy is if you compare signal to tour. So tour is a way to connect to a public website by anonymizing your IP address. So basically you're accessing public content in a private anonymous way.

[00:26:02]That's what tour does. And this is what tornado cache and mixers are typically doing. Governments hate mixers and they hate tour because they cannot actually do compliance unless they know who the people involved are.

[00:26:17]>> FH is like signal. Signal when I send you a message on signal. I'm using you know a telecom operator. So the telecom operator can see my phone connecting to your phone but they don't see the message that I'm sending you.

[00:26:31]>> This is what FHE does. people can see that I sent you something but they don't know how much you have or how much money I sent you right so zama is like signal and this is fine because as long as you have traceability you can have compliance and compliance whether we like it or not is necessary for finance to even exist on public blockchain so finance will not do non-compliant transactions finance will do compliant transactions and FHE is the best way to do Yeah, >> understand. So, um it's both confidential and a complaint >> to the absolutely >> yeah to the standard of government or institutions.

[00:27:13]>> We don't even do it. So, what we did is we included tools in the Zama protocol to enable token issuers and application developers to build their own compliance logic in their contracts.

[00:27:28]So, we're not telling them this is how you should be compliant. We're telling them you can program your compliance rules in your smart contract directly.

[00:27:36]I'll give you an example.

[00:27:37]>> Let's imagine I'm a stable coin issuer, okay? And I have a confidential stable coins where transfers and balances are encrypted. Okay? So nobody on chain can see the balances and amounts in my contract. I can decide who is allowed to decrypt the balances and the transfers.

[00:27:57]So I will want the user to see their own balance. Of course, you know, you should be able to see how much money you have.

[00:28:02]That's normal. But I can also give myself as the token issuer the ability to see all the balances of my own users.

[00:28:10]And by doing that, I can comply offchain with any kind of regulation I have to.

[00:28:16]And this is actually how banks are working today. When you have your money in a bank, you see your bank account.

[00:28:23]Your bank sees your bank account, but your neighbor doesn't. we can now recreate the same model on public blockchains. So compliance for us is something that is obviously needed in every application that you're doing financially, but we're giving the people building those applications the tools to be compliant. In fact, you know, like the Z protocol doesn't do any private thing by default. It gives you tools to build private applications and tokens.

[00:28:49]>> I think it's very smart. Yeah, it's a like essential condition for the mass adoption.

[00:28:56]Yeah, of >> course. And I think you know we've been very clear from the beginning Zama our goal is to enable legitimate use cases that require confidentiality on public blockchains finance uh identity, elections, government services, payments, anything that you want to do on a public blockchain that is a real legitimate use case. We need to make sure that people can build those without having to worry about being compliant.

[00:29:24]Right? Uh to say it differently, we are not trying to solve a problem for bad guys. We're trying to solve a problem for good guys and good guys, they want to be compliant. That's the reality.

[00:29:35]>> Yeah. I remember several years ago, I had a a friend uh who is a a crypto whale. He wanted to try to uh claim some rewards without um disclosing how much money and giving giving out his um wallet addresses. So I think Zama's use cases can support this kind of um >> oh this kind of yeah >> you know I think this is actually if I look at the different use cases that people are trying are building right now. So payments is a very obvious one.

[00:30:08]So confidential payments >> very big use case. Another one that I see a lot of people wanting to do is confidential token distribution vesting and treasury management. So if you are a crypto company, okay, and you need to distribute tokens to your team, to your investors, to your developer community, you don't want everybody to know how much every address is getting, right?

[00:30:32]>> And most investors, they don't want people to know when they're selling tokens because, you know, people on social media then go crazy. They're like, "Oh my god, you know, multicoin just sold tokens. It's it's a bad sign."

[00:30:43]You don't know. Maybe they just have to pay taxes. You know what I mean? like whatever the reasons with FHE you can distribute tokens confidentially and you can have vesting on confidential tokens so people don't know how many tokens everybody's getting but you can also do confidential swaps so for example uh your whale example they could claim their tokens confidentially so people would not know how much they're they're claiming in fact the Zama protocol itself the staking feature will allow you to stake confidential tokens and receive confidential staking rewards.

[00:31:18]Right? So this is a huge use case because again people don't want this data to be public. They had no choice before because FH did not exist. But now that it exists, I can guarantee you that 95% of every transaction in the future will be encrypted with Zama and with FH >> because now we have the new standard and option to do that.

[00:31:42]>> Yeah. and and people want that, you know, people want confidentiality.

[00:31:46]>> Could you share us on more user experience when using Teslate on Zama?

[00:31:53]Yeah. What which types of applications are most popular?

[00:31:56]>> So, there is one application, I'll give you an example, an application I love because I think it's such a good it's such a good use case. Um, it's a new company, so you haven't heard about it yet. It's called Rayash. Rayash is an onchain bank that cannot rug your money.

[00:32:13]So, how does it work? Right, it's a it's a banking app. You have a debit card.

[00:32:17]You have an IB band to make wires, but your money is kept on chain using confidential stable coins.

[00:32:25]>> So, people don't know how much money you have because it's encrypted. But because it's onchain, if the company or the bank goes bankrupt, you can always just send your stable coins to a different wallet, right? The government cannot seize your assets because it's self-custodial. You have the keys to your assets on chain.

[00:32:44]The bank cannot freeze your assets because they don't control those assets.

[00:32:47]But because it's FHE tokens, you can even stake them to earn yield on your bank account. You can swap it for crypto if you want to invest in crypto. You can do everything that you can do in a modern banking app but completely on chain completely self-custodial without any risk of losing your money because your bank or government wants to rug you. Uh so like I'm from Lebanon originally right Lebanon people got rubbed completely like people woke up a few years ago the government said hey we don't have any more money sorry we're going to freeze all of your bank accounts and dollars. Boom. Done. All the money gone. This is impossible if your money is on chain and you own the keys. And this is what this company is basically solving. So think about every country where people have been rugged by their financial system, by their government, or maybe their currency got devalued and they want dollars or whatever. Like they could use that and basically never have to worry about that again. Now I I can imagine that um because so many major stable coin issuers they're also launching their own chain like uh arc from circle like uh stripe launching temple maybe they can all integrate this feature in the near future >> you know actually they don't even have to do it zama can deploy uh the zama protocol anywhere as long as we can deploy smart contracts so for tempo and arc to support FHE there's nothing Tempo and Arc has to do. That's the beautiful thing. We can deploy the smart contracts on Tempo and ARC and instantly people will have confidential stable coin payments. If you ask me what's a really really best solution, I would say FHE stable coins is really what you want.

[00:34:30]FHE stable coin on big existing trusted blockchain infrastructure is really the best solution.

[00:34:37]>> So uh just now you mentioned that there's FH uh standard token. So maybe from a a developer perspective >> how should they do to enable this kind of experience and how will you introduce to them to where to start? Yeah, >> we are pushing for a new standard the ERC7984 which standardizes confidential tokens on EVM chains. Uh so any developer who wants to support confidential tokens only has to support ERC 7984 and that will work with Zama but also other privacy projects that support the same standard. So this is not just about Zama. This is a general confidential token standard. For Zama specifically the actual transaction is on chain. It's a regular transaction on a regular smart contract. The only additional thing developers have to do is they have to encrypt and decrypt the data for the user in the front-end application.

[00:35:38]>> So this is literally just you know calling the ZAL protocol saying hey encrypt this data or decrypt this data and then that's the only extra work that you have to do. So let's say for example you have a a payment application you want to send the 10 confidential USDC to someone.

[00:35:55]The application would encrypt the $10 amount, send it to Ethereum. Ethereum will make the actual transfer and then the application will decrypt your balance on the application side as well. So the user doesn't even have to worry about that. You know, the user is just using a payment app and the developer only has to integrate encryption and decryption on top of the the traditional transaction that they're doing. Um, so you can actually go on the docs.zama.org uh to find all of that. It's very very easy. Uh, it's just solidity. So there's no need to learn a new language. Uh, you can just write your contracts the same way you do and you can try today on our existing test net in in a few weeks on our first mainet.

[00:36:40]>> So for the developers um, no matter they are from uh, the Ethereum ecosystem or Solana ecosystem, they don't need to learn new languages. They just need to enable the toolkit from Zava.

[00:36:53]>> Exactly. Because look, you know what do people want? People want to focus on building great products. Nobody wants to spend their time learning a new programming language or something like that. I think you know a lot of people in crypto they like to over complicate things you know they like to they like to invent new things which are really useless. You know we're very pragmatic at Zama. We're like okay what do people use? They use solidity for smart contracts on EVM. Okay, maybe solidity is not the best language. It doesn't matter if this is what people use. This is what we should actually integrate with. Period. Right on Solana, people use Rust. That's what we're going to be integrating with. We go wherever developers are. We don't ask developers to change their habits because they're already too busy figuring out how to build a good product. The focus of a developer is to build a good product.

[00:37:47]It's not to learn a new programming language that some stranger invented just for fun, you know. I mean, I know 27 programming languages. It doesn't mean I want to use 27 programming languages, you know.

[00:38:00]>> You just mentioned about the main launch. Yeah. Could you share more details to us?

[00:38:06]>> Absolutely. We have been in test net since July with incredible traction.

[00:38:11]Incredible traction. Hundreds of thousands of people interact with it.

[00:38:15]You know, it's in fact it's been so successful that we had to shut down the test net because we were saturating the Ethereum test net with Zama transactions. So, we're like, okay, maybe we have to take it down a little bit. It's back up now. So, you can use it today.

[00:38:31]>> And we are planning to also do a public auction to sell 10% of the supply of the Zama token. But here's a trick. The Zama public auction will use Zama to hide the bids of people participating. So the Zama auction >> that's a a live use case.

[00:38:53]>> Exactly. It is very nice, you know, because when you do what's called a sealed bid auction, then there is no advantage for bots or anything like that. So you're preventing front running from bots who would steal the auction.

[00:39:08]So doing it with sealed bids is actually a very fair mechanism. And the reason why we're doing an auction is because I believe that the only way to know the price of something is to let other people decide how much they want to pay for it. Right? So sure, Zama raised $150 million and her last valuation was 1.2 billion. But if you think that this is too expensive, you can bid under, see what happens, right? And so we're telling people that Zama is a VCbacked company that raised hundreds of millions of dollars, but Zama is not deciding the price of the token. The community decides the price of the token in an auction that uses Zama to hide the bids and make it fair against bots, other people participating. Those auction tokens are going to be completely unlocked. And this is actually what's going to be floating on day one. So, you know, the the the reason we're doing this is because we want as many people as possible to hold Zama tokens. You know, we want them to have Zama tokens because they can use them in the Zama protocol or maybe they're developers who want to build application or maybe you want to become an operator of the Zama protocol and you need tokens. So, we need as many people to hold those tokens to participate and use the Zama protocol.

[00:40:27]>> Well, this is exciting news.

[00:40:29]>> Yeah, you will be the first showcase on Zamaet.

[00:40:34]It'll be the first token on Zama mainet and I think Zam is probably one of the first companies to do a public sale after we launch mainet.

[00:40:42]>> You know, usually people do pre-sales.

[00:40:44]We don't do a pre-sale. This is not fundraising. We already have money. We don't need more money to build the Zama protocol. We built it already. We're launching it and then we're doing the public auction to distribute the token to as many people as possible who want to participate and help it grow the ecosystem >> and using the bid the the confidential bid um use case um and let everyone experience >> exactly >> how FG works. That's a very interesting mechanism.

[00:41:15]>> I think it's a very good mechanism for price discovery and for distribution. I actually think that this kind of you know encrypted auction this could be like the echo or pump fun use case for Zama if you think about it I think a lot of people are going to do this in the future this is going to be a very very common way to launch tokens >> and um what will be the Zama's token utility >> so the token is a utility token that is used for fees and staking so every time you're encrypting and decrypting data in the Zama protocol you have to pay a small fee in Zama tokens. Uh we burn those tokens. So 100% of the fees in the protocol are burnt by the protocol automatically. On the other side, we have an emission schedule. So every year we're minting tokens to pay for the operators running the Zama protocol and to reward people who are delegating their stake to help secure the protocol.

[00:42:12]It's like similar to Ethereum and Solana. So there is token burning for the fees and then there is minting of tokens for the rewards. And so by doing that you know you're effectively creating a good balance between usability and security of the protocol.

[00:42:28]So again the Zama token is very simple.

[00:42:29]We're not reinventing anything. It's like a pretty basic mechanism. The one thing we added which is a little bit different is the price of using Zama is actually in dollars. Even though you pay with Zama tokens, why is this important? If you're a developer, you want to know how much it's going to cost you to use Zama, right? And if Alma becomes too expensive to use because the Zama token price goes up, >> that's not a very good developer experience. By making the price fixed in dollars, developers have predictability on how much it's going to cost them to use the Zama protocol regardless of the fluctuations of the price of the Zama token, right? And this is how it would work in in any web two company actually if you think about it. So we're thinking about pricing the way that you would do it in a cloud or SAS type of product in web two. the cost for uh developers and institutions uh predictable.

[00:43:32]>> It has to be predictable otherwise nobody's going to use it.

[00:43:34]>> Talking about this scenarios I have found how it tends the use case not only the bullet chain but to some web two companies not AI inference government data sharing and how do the requirements in these sectors differ from the blockchain?

[00:43:54]I think the big difference between uh web two and web 3 companies is blockchains are public infrastructure.

[00:44:03]So there is no way to keep things private on a public blockchain unless you use FHE. So FHE and blockchain is solving a major major problem and is creating new opportunities that would not exist otherwise. In web two most companies don't make the data public, right? uh they basically just tell you, hey, trust me, I'm good at cyber security. I'm not going to get hacked.

[00:44:26]Your data is protected on my servers. So for them, FHE is not a requirement in the same way as web 3 companies need it.

[00:44:35]It's a nice for better security and privacy of their user data. So I think eventually everything in web 2 is also going to be encrypted with FHE, but there's less urgency to use it than there is in web 3 at the moment. So that's going to take a lot more time.

[00:44:51]uh but I think eventually it's going to happen too right it's just a matter of time so so zama today is focusing on financial use cases on blockchains uh I think the next big thing for us is going to be government services on chain so we see more and more governments wanting to do onchain elections you know you need privacy for that to do uh onchain identity you need privacy for that >> or you know like if you buy a house your your house ownership would be on chain as well you want also privacy for that you know you don't want people to know who owns a house and how much they paid for it. So all of those government services are going to be moving on chain and will require FHE for privacy and then eventually you'll have AI and non-blockchain use cases as well. Right?

[00:45:35]That's the endgame and the vision we have you know for the company is that if we are successful in the future privacy is no longer something people care about not because it's not important but because it will become the default in every application you're using onchain or online. So think of Zama like remember before when you bought a computer there was like a small sticker that said Intel inside.

[00:46:02]>> Yeah. You know >> basically this for privacy >> right >> inside.

[00:46:11]Exactly.

[00:46:11]>> Yeah. Talking about the AI companies.

[00:46:14]Yeah. There is a hot topic. Yeah. Now more and more people using TBT and so and GMI. Yeah. We are contributing datas every day to these AI companies. Yeah.

[00:46:28]Do you think these companies will use FHE in future?

[00:46:33]>> Absolutely. Uh actually I talked to all of them. Uh I know the CEOs and uh and all of these guys from all those big AI companies. I mean remember I come from AI myself.

[00:46:43]>> Yes.

[00:46:44]>> You know it's uh in fact actually AI is the first thing that made me want to work on privacy. [laughter] So so if anything like I care a lot about privacy.

[00:46:55]>> Yeah. is just like from a business perspective as I said there is no urgency okay because people are using AI by trusting those companies in the moment that will change that will change I think after blockchain and governments AI obviously is going to start adopting FHE for privacy but this is going to take a little bit longer to do it's not going to be something immediate >> yeah I can imagine that people feed more and more personal data and memory to the AI LLM then it will become more and more urgent for people to care about it.

[00:47:35]>> Yes, I believe that. Uh but but it's going to take more time.

[00:47:40]>> Blockchain is needed. People need it now because without privacy and blockchain they cannot build all those financial applications. what will be the um use case in blockchain in in finance that you are particularly bullish about uh you look forward to see build on some >> I mean the obvious ones uh payments stable coin payments is a very clear one where you need privacy asset management so anytime you want to buy sell manage a portfolio of tokenized assets whether it's crypto or tokenized stocks any kind of tokenization RWA project will need privacy for people to use them on chain privately and trading eventually as well you know I mean we've all seen for example people in hyperlquid you know people see your liquidation threshold that's not a good thing you know you don't run around [laughter] >> yeah I mean you don't want to show people when you're going to get liquidated you know because they're going to go and hunt you uh so you want privacy for that as well >> yes if everything goes really well Yeah.

[00:48:46]What do you hope Zama becomes in 5 to 10 years?

[00:48:50]>> I think Zama HTTPS for blockchain really like it's it's 95% of blockchain transactions will be encrypted with Zama in the future.

[00:49:01]That's my goal. And if you believe that blockchain is going to grow, you know, we're talking millions of transactions per second eventually. M just like now when we are using the web to IM um like by default we think end to end encryption is the standard so maybe several years from now the end to end encryption for all the blockchain transactions should be a new norm.

[00:49:27]>> Exactly. That's exactly the goal. You know the goal is you don't think about it anymore because that's how it is by default.

[00:49:34]>> That's great. That's a big business.

[00:49:37]>> If Zami is successful at encrypting 95% of blockchain transactions in the future, I think we can say that we achieved something big, you know, something useful and it's actually needed, right? Zama is not a memecoin.

[00:49:51]You know, Zama is actually building a real utility that is real problems. So, I'm very excited about that. You know, I I wouldn't be building this unless I thought that this could be solving a major problem and that this could become a major successful company.

[00:50:06]>> Yeah, I'm curious about that. How large is the TM of this market?

[00:50:11]>> Well, I mean, imagine if you took uh I don't know 1 cent on every financial transaction in the world. How big is that market? That is basically the market for Zamo. Pretty big. I don't even know what the number is. big enough that I can actually you know >> yes maybe exceed your expectation again after five years >> okay I I'll give you one statistic global finance so payments asset management trading everything together is a $150 trillion market >> okay if you take one cent of every transaction in this $150 trillion market it's a pretty big market I don't know what the number is, but it's probably trillions. I I don't think we have to even think about it. You know, I think our job should be make this work, make this scale, make this cheap, and make sure everybody uses it without thinking twice. And if we're successful in achieving that, then the company will be very successful. Um what what is the biggest challenge to drive um partnerships or or usage of FGS um like enable Zama in different blockchains?

[00:51:25]What is the biggest challenge for the team? Yeah, >> the only challenge is uh launching mainet. You know, [laughter] >> I mean, we had over a thousand conversations with potential partners and customers, right? People want to use FHE, >> but they didn't have a way to use FHE because nobody launched FHE in mainet.

[00:51:45]Zama is a first company to put FHE in production. As soon as Zama goes in mainet, we're expecting that adoption will be very fast because there is a lot of demand and a lot of need for this thing.

[00:51:58]>> Wow. So, so really look forward to that in the next quarter.

[00:52:03]>> Me too.

[00:52:05]>> Next months and quarters. Yeah, >> very exciting. A little bit scary too, but you know that's uh at some point you got to you got to just do it. So, uh yeah, it's happening. It's real. Do you have any metrics like like lost star for the Zamar's development?

[00:52:21]>> So we look at uh three metrics. The first one is performance. So how fast how many transactions per second, how cheap it is to use that.

[00:52:33]>> Uh so you know to to paraphrase uh uh to from Solana, the goal for Zama is to make latency lower, bandwidth higher and cost cheaper.

[00:52:43]>> Okay. Oh, >> that's like you know that's a goal. Uh so as I mentioned 10x every year on that so I think we're doing good progress on the Zama protocol side. We look at two metrics. One of them is revenue. So how many fees are basically collected and burnt by the protocol. And the second one is something that we call total confidential TVL basically. So total value encrypted. So how much dollars sits in confidential stable coins?

[00:53:12]Because that's also a very good indication of adoption by finance, right? If every stable coin is encrypted, if every crypto token is encrypted, then you know you're TSV, total shielded value, TVS, total value, right? I think that that's the exact word.

[00:53:32]>> Yeah. So yeah, so total value shielded, revenue and performance are the things that we look at.

[00:53:37]>> Performance, revenue, TVS. Yeah.

[00:53:40]>> Yeah. And we'll make those public of course. You'll have like a dashboard, a Dune dashboard where you can track all of those things. Uh so this will be will be publicly visible. So Zama the company will be very very transparent with metrics so that people can follow the progress of the of the company as well.

[00:53:57]>> That's great.

[00:53:58]>> Yeah. We watch a demo of Zafir. Yeah.

[00:54:00]during the port. Yeah.

[00:54:03]>> 200 Singapore bank.

[00:54:05]>> Yeah. They also use the term shield.

[00:54:08]>> Yeah. So Zcash was the first one to use the term shielding.

[00:54:12]>> You know, when you convert your Zcash to shielded Zcash. So I think now the whole privacy community is starting to use shield as a as a term for encrypted, right? So whatever people say is the right word, we're going to use the right word. [laughter] >> Just to making sense here. For example, for a transaction on Ethereum mainet, one usage of encryption and decryption like how much is the cost? Usually >> um the cost of encryption and decryption depends on volume. So an application that does a lot of encryption and decryption will pay less than an application that doesn't do a lot of it.

[00:54:52]For example, if you're doing like a payment app where you're doing, you know, thousands of transaction per hour, then the cost will be less than one cent per transaction.

[00:55:03]>> If you're an application that people use once a month, maybe the cost is going to be $1 per transaction.

[00:55:09]>> Okay?

[00:55:09]>> It depends on volume. Again, the same way you would do it in web two, you know, in web two, the more you use a service, the cheaper it gets. Same idea here for the Z protocol. So I guess the like the cost will be cheaper and the speed will be faster. That will be the trends coming in next several years.

[00:55:28]>> Yeah, exactly. Faster, cheaper, more bandwidth. Uh again, Solana, I think, really understood that we want to basically copy Solana's philosophy on this. It's uh lower latency, increase bandwidth, make fees cheaper. That's it.

[00:55:43]>> Okay. Yeah. Maybe some uh last questions um about you yourself because we are also very curious that uh you had experience in AI, in crypto and in bio biotech and now you are um investing in those areas like in the intersections of all these three. So what kind of um companies or technologies what kind of topics are you looking for? Are you mostly interested in for the future?

[00:56:14]>> I as an investor I like to invest in early stage deep tech companies. So companies trying to solve a big science or engineering problem. Uh so I've invested a lot in longevity biotech. So, for example, uh I invested in a company that is working on replacing parts of your brain when you age. Okay.

[00:56:38]>> Yeah. I' I've invested in a company that is helping, you know, extend longevity by rejuvenating your cells. So, making your cells younger. Um, I've also invested in a company that is building miniature small MRIs that you can have in every doctor's office instead of going to the hospital to get an MRI.

[00:57:01]>> Uh, >> I've invested in new mental health uh treatments. For example, I invested in a company called Gilgamesh. I invested at a 10 million valuation five years ago.

[00:57:12]They just got acquired for 1.2 billion.

[00:57:14]So, I like to be very early. My my pitch to founders is if they go to VCs and VCs don't understand what they're building, they should come to me instead.

[00:57:25]Uh so I also do of course a lot of AI companies. Uh I do a lot of hardware semiconductor companies. So I invest in quantum computing. I invest in photonics. All of these things and crypto you know blockchain is also something I invest in actively. In blockchain specifically, I'm investing more in infrastructure, not so much on applications.

[00:57:48]>> So really into the deep tech and some sometimes uh a little bit like sci-fi technology.

[00:57:55]>> Yeah. You know, it's my money, right? So I I invest in what I think is interesting, what I like, and I invest in the future I want to see exist.

[00:58:02]>> And I think, you know, uh Oh, there's another one that's interesting actually.

[00:58:06]I invested in a in a fusion company doing nuclear fusion. And that company actually discovered that their technology could be used to, it's not a joke, it's for real, they discovered that they can use their technology to transform mercury into gold. [laughter] So they can actually they can actually produce gold, which is amazing. Amazing.

[00:58:30]I was like I mean, you know, it doesn't get better than that. Uh you can check them out. They're called Marathon Fusion. Incredible guy. Incredible guys.

[00:58:38]>> Super interesting. Is there a book or paper that has deeply influenced you maybe you want to recommend to our audience?

[00:58:46]>> A book or paper that uh influenced me.

[00:58:49]That's a good question. There's actually one book which is it's a very small book, very short book, but I think that book is interesting because it was the first time that people really talked about the concept of decentralized uh ecosystems about Dows and things like that. It was back in the 1980s, >> very long time ago, way before crypto existed. It's a book by someone called Hakeim Bay called the temporary autonomous zones. And in that book, he's basically explaining how you can create temporary communities that can actually completely change the way that societies are actually working. So I think that's interesting because a lot of the culture in crypto can be traced back to that book actually. Uh so that I think is a good introduction. Otherwise, it's not fun to read, but I love reading science books. When I mean science books, I mean like you know, I'll read like a book on quantum physics for fun, for example. I think it's super interesting to learn about science in general, you know, to understand how the world actually works.

[00:59:51]It's it's fascinating.

[00:59:54]>> We'll put it in the show notes.

[00:59:56]>> Yeah.

[00:59:57]>> Yeah.

[00:59:58]>> Yeah. We also found a word in your biohigher.

[01:00:02]>> Oh, yeah. Yeah. Yeah, I I mean I experiment a lot on myself. Uh I do a lot of experiments. Um a few years ago I experimented by uh becoming obese. So I went from being normal to gaining 35 kilos in one year because I wanted to see what it would look like and how I could lose it quickly and then I lost it again and I become super fit. So like I love to experiment on myself and at the moment I'm doing the opposite. I'm experimenting with uh longevity. So I'm trying to reduce my uh speed of aging as much as possible. Uh so right now my current speed of aging is 0.68.

[01:00:44]>> Uh so basically I I age 30% slower >> uh than chronologically. And that puts me in the top 20 on you know Brian Johnson has a leaderboard of people competing.

[01:00:58]I'm in the top 20 now. So, >> wow.

[01:01:02]>> Yeah. So, you know, like people say that launching a token in a company is very tiring. I think for me it's been actually good for my longevity somehow.

[01:01:09][laughter] >> So, it's also experiment for you.

[01:01:15]>> Yeah. I mean, look, you know, it's it's it's I I think health is something that you cannot ignore when you're trying to do things which are ambitious. you know, I mean, it's a a good mind in a good body, right? So, you need to be healthy for your brain to be creative, to be functional, right? And I think if you're an entrepreneur and you're trying to solve big problems over a very long period of time, you need to be healthy to sustain the effort on such a long period, right? So you have to choose, you know, it's either you're healthy and you can build something super big over a very long time or you're going to burn out. And uh and for me, you know, you know, I I want to spend my next 10 20 years building Zama and I need to make sure that my body >> can support that.

[01:02:04]>> It's already slowed down the agent. Oh, that's a good sign. [laughter] >> Yeah.

[01:02:09]>> Okay.

[01:02:10]>> Yes. Thank you, Zan. Yeah. I think we we have learned a lot about the privacy fama and even longevity. [laughter] >> Thank you for having me guys.

[01:02:22]>> Many uh deep tech futures.

[01:02:26]>> Yeah. Do you have anything else want to share?

[01:02:31]>> Well, maybe just if people are interested in following Zama, uh our Twitter X account is just Zama. Uh, and you can also message me directly, Rand Hindi on on X. My DMs are open. Always love to interact with the community. Uh, if you have any feedback, any ideas on how we can make Zama better, please share them. You know, I'd love to talk about it.

[01:02:55]>> Uh, that's great. We'll put it in our um show notes in the link below.

[01:03:00]>> Great.

[01:03:01]>> Oh, I forgot one very important question.

[01:03:05]>> Yes.

[01:03:05]>> Yeah. Yeah. for our audience like some user, some developers, is there any way they can participate with Zama?

[01:03:15]>> Absolutely.

[01:03:16]>> Uh so we have actually a creator program and a developer program that you can participate in. Uh so if you go on the zama.org website, you'll find links to that. Uh, as a creator, you know, we have a monthly leaderboard of the most impactful creators in the Zama community. We actually distribute between 50 and $100,000 a month to creators in the Zama community.

[01:03:45]>> And for developers, uh, we also give them all the support that we can. Uh, you know, we'll basically subsidize some of the protocol fees for them when they build applications. So really trying to make sure that if you want to build on the Zama protocol, we're giving you as much support as we can. So yeah, if you're a creator or a developer and you want to help, just come and participate in one of our programs and uh and let's do this together.

[01:04:07]>> And for users, stay tuned for the next month or next quarter. Yeah.

[01:04:13]>> Yes.

[01:04:14]>> Yes. For users and for people who want to participate in the Zama auction, we're going to be talking a lot more about that.

[01:04:20]>> Yes. And Yeah. And the TG will come along with a team, right?

[01:04:26]>> Yes, exactly.

[01:04:27]>> Oh, yeah. So, we're looking forward to them and we'll continue following the Zamar's progress.

[01:04:34]>> Awesome. Thank you guys. Thank you a lot for the time.

[01:04:36]>> Yeah. Yeah.

[01:04:37]>> Thank you. Thank you, Ran.

[01:04:39]>> All right. Speak to you soon. Bye, everyone.

[01:04:42]>> Bye.

[01:04:42]>> Bye. Have a good day.