"Connected humans are commodified & surveilled 24/7 without even realizing it." – Mykola Siusko
Web3, in the name of user sovereignty, has constructed platforms that unwittingly extend the now-ubiquitous machinery of surveillance capitalism into the on-chain economy. Ethereum and other public blockchains provide data and metadata that, with the help of AI, make nearly all activity on these networks traceable and identifiable.
Fortunately, there is an incredible movement of people and projects at the fringes of our industry building genuine privacy solutions. Today, Decent is taking our place amongst them. We recognize just how vital privacy is for the continued health and development of our industry, and we’d like to share the progress each of our current projects has made toward solving specific privacy challenges.
This article walks through three projects we've launched using a privacy lens to illuminate the problems they solve and why they matter at this critical moment in our industry.
This project is near and dear to our hearts. We partnered with the founders of Sarcophagus early on, helping to build on the vision for a time-delayed dead man's switch and its many use cases. The ability to securely store data at an affordable rate with no counterparty is truly a privacy and sovereignty-enabling application. Through our partnership, Decent engineers made some of the technical breakthroughs that brought Sarco’s vision to life.
Data integrity is a critical component of Sarco’s security model. Arweave ensures when the programmatic conditions are met to share data, that the secured information will be available.
Today, Sarco serves a variety of use cases and preserves privacy through the double-layer encryption of data stored on Arweave. Many long-term key management solutions require a trusted, off-chain intermediary. This includes will and inheritance planning for digital assets, key management and transfers for DAO and DeFi project multisigs, and general password and credential recovery. But Sarco has many other potential applications, and we eagerly anticipate political activists, journalists, security experts, and historians alike will use Sarcophagus to protect information and ensure that it is passed on to the correct people– at the appropriate time.
Recently, the team launched Sarcophagus on Polygon to reduce the cost of protecting information while remaining trustless. Learn more about the team and vision here:
We began building Fractal in 2021 to service our own needs as a DAO, and quickly realized that other DAOs would have similar needs and face similar challenges on the decentralized frontier. There are many challenges in the progressive decentralization process, including keeping assets safe within a single treasury, while enabling experimentation. Many DAOs have had to custom-code their own smart contracts and had no interface to do what required one or more engineers. This is why we launched Fractal.
Fractal allows organizations to progressively decentralize their treasuries using (Gnosis) Safe modules to create sub-DAOs and to add new types of governance to each of these treasuries. Essentially, Fractal is a composable toolkit that enables DAOs to grant budgetary authority and governance options to layers of an on-chain organization. And that's where privacy comes in.
There are organizations that we want to be fully public and accountable, like departments of government that can't seem to pass an audit of public funds being spent. However, many organizations seek to protect alpha, IP, and other layers of their actions by keeping them private. In the on-chain world, we saw this issue play out when ConstitutionDAO was outbid because their treasury and discussions were public to outsiders.
DAOs need privacy. And Fractal is in the process of developing privacy-focused features for DAOs and sub-DAOs across a number of domains:
Private voting is a given within modern democracies (though still plagued with centralized counterparties like voting machine manufacturers, etc). Most DAOs, on the other hand, vote using public blockchain addresses, visible either throughout the entire process or once the voting period ends. This has many problems for the social fabric of voters and DAO participants and can influence outcomes in an undue way. We believe that DAO participants and leaders should have options that suit their specific community, and that's why we're building modules for both shielded and fully anonymous voting as a part of Fractal v.2.
Most DAO treasuries and payments are fully public. This creates problems both for DAO administrators, as well as recipients, whose compensation details are visible to anyone who can use a block explorer. Having privacy in this regard is important for both contributors and DAO decision-makers when transacting on-chain. We are discussing the need for more private forms of payment with DAOs and other on-chain organizations.
This is a more complex phase that we are exploring, alongside the great work of folks like ZK Safe and others.
Fractal was initiated to support the growth of DAOs at a foundational level. And now, as DAOs are starting to mature, that includes supporting more robust privacy options for DAO management, governance, payments, and more. If you're in the DAO space and are thinking about privacy, we'd love to connect. More on Fractal here:
Our industry took a hard fall last year, with the collapse of centralized actors Three Arrows Capital, BlockFi, FTX, and Genesis. Out of this chaos, DeFi has been battle-tested and has shown the power of zero-counterparty finance. Still, for our industry to mature and prosper, we need institutional capital.
Until quite recently, many institutions have relied on centralized options to meaningfully participate in the on-chain economy. Luckily, that's changing. With players like Maple Finance and Maven 11, on-chain institutional lending is becoming real. But these lenders, and the borrowers that borrow from them, both require transparency with privacy. That's where Lumen comes in.
Institutional borrowers need to validate that they have and maintain the liquidity thresholds needed for loans they take out. But at the same time, they don't want all of their addresses to be fully public and auditable by anyone - lest they get front-run or otherwise tracked. For their part, lenders don't want to have to store the sensitive information of borrower addresses and create new attack vectors that cause risk to their core businesses. To solve this, Lumen uses zk proofs to validate borrower assets and liquidity for on-chain loans and sends those proofs to lenders. This guarantees both parties the benefits of transparency without compromising privacy or security.
As a next step, Lumen is developing ways to securely and transparently verify assets located on centralized exchanges as well This will greatly expand the liquidity available for institutional borrowers to draw upon. In the future, Lumen will continue to support both borrowers and lenders with privacy-enabled solutions that help them retain their competitive advantages while ensuring privacy and integrity.
Learn more about Lumen:
As far as we’re concerned, respect for individual privacy on the internet is part of what it means to be Decent, our heritage and genesis story. That's why we've baked it into all of our projects, and plan to expand each of their roadmaps further in the direction of user optionality, privacy, and choice. We believe privacy begets decentralization – it’s not a tradeoff, and it’s critical to the next stage of our industry’s evolution and growth.
If you're building in the web3 space, and care about privacy, we'd love to have you at our upcoming Twitter Spaces discussion (details). If you’re building privacy products and want to connect, message us at email@example.com.
Join us on October 25th at 10:00am PST / 5:00pm UTC for a Spaces roundtable on privacy: