Weekly Updates

Q&A with Bolt Labs CEO & Co-Founder Ayo Akinyele

It was another milestone week for the Tezos ecosystem, as we celebrated the 2-year anniversary of the Tezos blockchain. For this week’s update, we sat down with Bolt Labs CEO & Co-Founder Ayo Akinyele to discuss his firm’s announcement that they are working to bring zkChannels support to Tezos to enable privacy-preserving state channels. Check out the Q&A below.

How did Bolt Labs come to be? What was the problem you were trying to solve?

Existing cryptocurrencies like Bitcoin have scalability and latency problems that limit their use as a medium of exchange (can take up to 1 hour to confirm a transaction on the blockchain). The Lightning Network was designed to address these scalability and latency issues by using the blockchain to escrow funds and resolve disputes while moving the bulk of transactions off-chain. However, the Lightning protocol does not offer privacy by default.

 

To address this problem, Matthew Green and Ian Miers conceived of a protocol in 2016 that addresses the privacy limitations of Lightning: Blind Off-chain Lightweight Transactions (or BOLT). It offers a strong privacy solution while preserving the efficiency of off-chain payments.

 

The importance of strong privacy protections to the development and adoption of blockchain technology is not always obvious or intuitive. In fact, the battle against privacy-related protocols has existed since the beginning of the internet era. The HTTPS protocol, for example, is an essential infrastructure that enables secure banking or e-commerce today. Yet as it was being developed in 1995, many overemphasized how the technology-enabled criminal or terrorist activity over the privacy protections for honest customers buying or selling goods online. But just as the HTTPS protocol has proven to be a critical building block for secure internet communication, strong privacy protections are required for cryptocurrencies to be suitable for many use cases.

 

Fortunately, because early use cases of blockchain tech are financial in nature (versus chat or sharing files on the original internet), the need for privacy is more obvious. Furthermore, as the internet age has matured, we as a society are increasingly aware of the importance of the privacy and ownership of even our personal communication data.

 

The initial BOLT research was designed for Zcash, but showed significant promise for use across blockchain protocols. Bolt Labs has extended this initial research beyond Zcash to Bitcoin, and our team is working towards a chain-agnostic approach that will bring the benefits of privacy and scalability to blockchains across the ecosystem.

 

What is zkChannels?

zkChannels extends the initial BOLT research and is a second layer protocol that enables privacy-preserving, off-chain transactions between customers and merchants. The protocol allows customers to transact with a merchant without revealing their identity and allows merchants to securely authenticate customer transactions without needing to “see” their personal identifying data. Our protocol fundamentally decouples the customer’s identity from the service itself.

 

What drew you to build on Tezos?

Tezos offers a number of unique features that make it particularly well-suited to a zkChannels implementation. For one, Tezos provides upgradability without contention due to its efficient governance mechanism. This on-chain governance mechanism reduces the friction for extending Tezos with the necessary features to support zkChannels.

 

Tezos also offers a secure-by-design smart contract language with formal verification properties. This means we are able to prove that smart contracts perform correctly with respect to the intended specification. This is particularly important for financial smart contracts (e.g., tokenized assets, loans, etc) which require guarantees that funds will not be lost or frozen due to bugs in the code.

 

Anything else that you would like to share?

In addition to implementing zkChannels on Tezos, we are also interested in building a cross-chain bridge for connecting Zcash or Bitcoin to Tezos. This bridge, built via zkChannels, would provide censorship-resistance to decentralized finance (DeFi) applications.

Additional Ecosystem Updates:

FAQs

I’m not sure how voting is done to decide on the Tezos Foundation council and exec committee, can you explain how this is carried out and who gets to vote? Also is there any thoughts on improving the process to make it more transparent and with broader community participation. For example, in the future by bakers in a similar fashion to the way they vote for proposal upgrades? Is there any ideas for such improvements?

According to the Foundation Charter and in line with Swiss foundation law, the Foundation Council is responsible for electing its new members. Since the beginning of this year, the operational process for recruiting new Council and executive team members is delegated to the Nomination and Remuneration Committee of the Foundation, which makes initial suggestions of candidates based on criteria defined by the Council. Sourcing of candidates is supported by an international recruitment agency and candidates, on a case by case basis, are vetted by various external sources including key people within the Tezos ecosystem. As a general guideline in place since the beginning of this year, Council members, including the Council Chairperson, should be accomplished individuals with a solid professional track record in industries relevant to the Tezos ecosystem. In addition they should be financially independent and in the position to take an unbiased view on the Foundation and the Tezos ecosystem. The Executive Committee is elected by the Foundation Council, also as defined in the Foundation Charter. More information on the Foundation committees can be found here.

 

What is the vision for tezos? Partner of choice for tokenization of securities? Smart contracts? New and improved ethereum? The place to be for 6% staking rewards? Do we not know yet? In other words, what is the pitch that a developer, entrepreneur or investor hears and says: yes I want to contribute and be part of that ecosystem.

As we’ve highlighted before, Tezos is open and inclusive infrastructure for a wide variety of use cases, some of which likely have yet to be imagined. In addition to Tezos as a cryptocurrency (and programmable money), digital securities emerged as an initial strategic area of focus for the Foundation, but the vision for Tezos extends well beyond just tokenization of assets. The Foundation and other community members have also ramped up efforts to grow the DeFi and gaming ecosystems on Tezos, along with other use cases. For example, we are excited about projects such as Dexter, tzBTC (and future wrapped assets on Tezos), QuipuSwap, and others that are in development and will launch on Tezos in the future. A primary focus for the Foundation has been to support development teams building tools and infrastructure that make such applications possible – we are pleased to see these tools and infrastructure mature, make Tezos development a more accessible and seamless experience, and pave the way for end-user applications.

 

Will additional funds be allocated to the development of an excellent and easy to use wallet?

There are a number of software and hardware wallets built exclusively for Tezos that are currently available to use including Galleon, AirGap, Kukai, and Ledger. Additionally, camlCase is in the process of developing Magma, a non-custodial mobile wallet for Tezos. Tezos users are also able to use a variety of wallets not exclusively for Tezos including ZenGo and Trezor. That being said, we are always evaluating our funding priorities and will consider allocating additional funds to wallet development in the future.

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