BlockTalks x Portal Finance AMA Transcript!
We recently hosted an AMA with Portal Finance, on October 7th at 4PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Geroge Burke, Co-Founder & CMO at Portal Finance, Hanson So, Partner at B21 Capital, Investor of Portal Finance. So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Introduction Questions Asked By Team BlockTalks!
Q1. Could you please introduce Portal DeFi to our community in layman’s term?
Ans — Our company, Portal, raised ~$10M to give birth to DeFi built on Bitcoin. We believe financial applications should be built on the protocol that is most likely to become the base money layer. Portal makes DeFi unstoppable with anonymous, zero-knowledge swaps via the first true cross-chain DEX that’s genuinely trustless. Unlike Uniswap/others, Portal eliminates minting wrapped coins (ie wBTC, wETH) or risky staking with intermediaries. Trading across incompatible blockchains is now just 1-click, trustless and private.
Fabric protocol, our layer 2 & 3 technology powering Portal, enables building censorship-resistant communications, media and one-click cross-chain swaps, all on Bitcoin (along with all its security advantages).
Q2. What are the advantages of Portal DeFi to the other alternatives in the Blockchain field?
Ans — Let’s first discuss the WHY before we discuss the WHAT.
The motive behind Portal is expression of self-sovereignty. Portal is to cryptotrading what Tor is to p2p communication. Portal is an unstoppable p2p exchange.
For Bitcoin to become money, we need a censorship resistant, peer to peer trading system that crosses blockchains. That’s why we are building DeFi using cross chain atomic swaps. BItcoin is strengthened by building many layers of functionality.
OK… now what are we fixing?
Today’s DeFi and DEXs have problems with:
1) High gas fees: we utilize layer 2 for cross-chain swaps by which nodes can communicate hundreds or thousands of messages/transactions prior to settling on the main chain.
2) Poor UX: We agree the user experience for DEX trading has been awful so far. We have a beautiful non-custodial wallet that is as easy to use as Coinbase but self-sovereign and trust-minimized, where you can store coins and trade from within the same interface. We’ve worked years on developing this.
3) Asset locking & replication: The wrapping and locking of funds onto other chains by these so-called “cross-chain” DEXes are neither trustless nor decentralized, nor are they even cross-chain! BitGo custodies the majority of the billions of locked up BTC. As we saw with the recent $600M hack, these DEXes are honeypots waiting to happen. Atomic swaps solves this. Wrapping tokens becomes a thing of the past since coins of incompatible chains can be traded natively and without a risky middle-man. Each party’s funds are only locked during trade execution and not re-bonded or replicated onto other chains for eternity.
Q3. What are the major milestones Portal DeFi achieved so far & what are in the future pipeline?
Ans — In terms of achievements, we invented zero-knowledge swaps, which fix the Layer 1 “Tier Nolan” atomic swap problems. In addition, our CEO invented the Fabric protocol (the protocol Portal uses to build p2p ZK circuits for Fully Homorphic Encryption), and has been used to build peer-to-peer communications and decentralized other apps.
With the atomic swaps integrated into Fabric, we are rebuilding the Web from client server model to an uncensorable, decentralized architecture.
For roadmap:
As for roadmap, we can announce that in only a couple of weeks we are launching our public sale on one of the most prestigous launchpads in the world, Republic, and unlike most other high profile projects, we are allowing investors from the US. If you’d like to participate, you’ll first need to be on the whitelist, available at PortalDeFi.com. We will also be announcing a number of partnerships with other tier 1 blockchain issuers over the coming weeks.
Last, with regard to roadmap, Portal is a completely community-driven development. The community will determine roadmap and features post-launch. We’re excited to see where the community drives the project as they push the bitcoin interoperability ecosystem forward.
We are also establishing our reach in the international markets including China, Korea and Vietnam.
Questions Asked on Twitter For Portal Finance Team!
Q1. Could you really explain to us why it has cost so much for the bitcoin network to decentralize, when almost all networks currently have been able to decentralize? Could it be that some detail in your algorithm prevents it from being completely uncensored?
Ans — Sorry to burst your bubble. This question has a flawed understanding of true decentralization. Almost no blockchains are truly decentralized. Look at the various hacks over the years, and the resulting ability for the management team to shut down the blockchain. That’s not decentralization. The infamous DAO hack from many years back enabled Ethereum to fork… Even though Vitalik is not officially in control of the network, anything Vitalik commands, the community implements. That too isn’t decentralization. BITCOIN, however, IS truly decentralized in the fact that no one party, no one nation, no one company, no one federation controls it.
Q2. In my understanding, Portal is the expression of self-sovereignty. Portal is to crypto trading what Tor is to p2p communication. Portal is an unstoppable p2p exchange. So,how can they mark a before and after in the technological evolutionary cycle of cross-chain atomic exchanges?
Ans — George Burke, [08-Oct-2021 at 9:52:45 PM]:
This is a really good question, and a rarity in these AMAs to get such a pointed understanding of what we’re building
Hope you don’t mind I take the time to ping the architect behind Fabric
Straight from the chairman of the board, and inventor of the layer 2 atomic swaps, @CDuggi himself writes:
“With Portal, cross-chain atomic exchanges will come to resemble mining in their security model — distributed, decentralized, and competitive with one another. Who is the exchange providing the service? The end users of the client app don’t need to know because it is a fee market for exchange services. And, the exchanges are never in custody of your coins.”
Q3. I understand that Portal seeks to create a free market for data and computing, but really what are the problems of markets that have data and computing? Could it be that it limits users from being able to enjoy many other benefits?
Ans — Censorship. The biggest problem with the client server model is that it is inherently centralizing. For example, centralied entities like Facebook, Google etc censor user generated content arbitrarily, and there is no market signal for others to either store or serve this data for a fee. The plan Portal and Fabric have is to replicate the fee market for decentralized data storage and use Bitcoin for payment in the contracts.
Q4. With the atomic exchanges built into Fabric, you are rebuilding the Web from the client-server model to a decentralized, uncensored architecture. So, can you give more details about this construction of a decentralized and uncensored architecture that overcomes the current model?
Ans — To answer this, you need to know what Portal is and its underlying technology, Fabric.
1) Fabric is the protocol, built ON BITCOIN, for peer-to-peer message passing and contracting using bitcoin as the security layer. All of the layered networks built using Fabric can use portal to exchange into Bitcoin and other assets. It is a natural fit to have the team unified and aligned.
2) Portal, built on Fabric, is enabling atomic swaps for coins across incompatible blockchains; trust-minimized trading using the security model of bitcoin.
3) Here’s what’s so exciting and unique about atomic swaps:
Atomic transaction means either the entire cross chain contract (typically updating of both ledgers) happens all in one piece. For example, if you “atomic swap” your Bitcoin with someone’s ETH, either you get their money and they get yours, or nothing happens. It provides guarantees of a secure execution of an exchange without a trusted third party.
Fabric splits contracts into “ZK Swarms” — allowing all network participants to agree to contracts on their own terms. These are “multi party contracts”, with each peer earning Bitcoin for computing their part in the program. It does this at “layer 3”, which provides the privacy PLUS fungibility of transactions.
With the atomic swaps integrated into Fabric, we are rebuilding the Web from client server model to an uncensorable, decentralized architecture.
NOW we can answer the question asked with some context.
As @hansonso1 was saying, the design details are forthcoming, but the mechanic is simple — we are creating an “information market” whereby the user broadcasts a request for a specific document (such as a web page, an image, a stylesheet, etc.) and anyone who has a copy of that document may send a response containing 1) a proof they hold the document, and 2) a price that must be paid to receive the document.
Q5. The development of cross-chains is currently centralized in many platforms, so how will Portal consider this as the focus of the technological development of the platform? What benefits will this bring to users when they use it to exchange BTC for other tokens and vice versa?
Ans — Portal doesn’t restrict cross-chain commmunication; Portal enables interoperability as an open platform without the need for wrapping or bonding assets onto the same chain. In Portal’s model, anyone can compete by creating their own client and facilitator modules to include other contracts. Our goal is to help develop the network with open standards. The only thing that is centralized is our client that runs on the network.
But why is Portal necessary for the cross-chain ecosystem at large?
Well, how can a decentralized exchange layer be truly censorship-resistant if traders are known and addresses can be traced? So, Fabric technology enables ZK circuit creation which, when implemented, opens the door to a whole host of new methods of obfuscating transactions without losing verifiability.
For Bitcoin to become money, we need a censorship resistant, peer-to-peer trading system that crosses blockchains.
Questions Asked by our BlockTalks Community Members during live Session to Portal Finance Team!!
Q1. Why the name Portal DeFi and any interesting stories behind the establishment of this project?
Ans — We want portal to be the one stop shop for all defi activities on the bitcoin network, and thus we named it Portal. Open the portal!
Q2. How much would be the cost of fees for exchanging Bitcoin for another asset within Portal Finance?
Ans — he beauty of Portal’s model is that it enables a competitve marketplace for facilitation of trades. Facilitators may choose the prices that are competitve not just against other exchanges but competitive against one another. This enables the end user — the trader (or by proxy default setup in the trader’s swapping app) — to select the best (cheapest) method of execution.
Q3. Can you provide an outline of the Portal Finance technology especially features that would help you take over the market ? I am quite Interested in the reason for your use of FABRICS ? Is it a cutting edge tech developed by Portal Finance or it has been in existence before now ?
Ans — Please visit https://fabric.pub for information on how Fabric works and, if desired, to get involved in helping build it. It’s open source and we love contributors.
Q4. Current DeFi and DEXs have several problems with: High gas rates, Poor UX, Blocked funds. So, can you explain how Portal is able to solve all these existing issues in this sector of the DeFi market? How do you see the project in the next 5 years?
Ans — This is similar to one asked earlier, so I’ll copy/paste the response:
Today’s DeFi and DEXs have problems with:
1) High gas fees: we utilize layer 2 for cross-chain swaps by which nodes can communicate hundreds or thousands of messages/transactions prior to settling on the main chain.
2) Poor UX: We agree the user experience for DEX trading has been awful so far. We have a beautiful non-custodial wallet that is as easy to use as Coinbase but self-sovereign and trust-minimized, where you can store coins and trade from within the same interface. We’ve worked years on developing this.
3) Asset locking & asset replication: The wrapping and locking of funds onto other chains by these so-called “cross-chain” DEXes are neither trustless nor decentralized, nor are they even cross-chain! BitGo custodies the majority of the billions of locked up BTC. As we saw with the recent $600M hack, these DEXes are honeypots waiting to happen. Atomic swaps solves this. Wrapping tokens becomes a thing of the past since coins of incompatible chains can be traded natively and without a risky middle-man. Each party’s funds are only locked during trade execution and not re-bonded or replicated onto other chains for eternity.
Q5. I am struck by the web-scale serverless infrastructure enablement with strong privacy and security guarantees. Could you give us a brief summary of this guarantee? How do you handle this security and privacy for users?
Ans — George Burke, [08-Oct-2021 at 10:25:38 PM]:
1) Building a secure layer 1 system is incredibly hard. We don’t want to do that; Fabric uses the layer 1 system that already exists and therefore we use Bitcoin as OUR layer 1.
In Portal, the contracts don’t depend on anything other than Bitcoin’s and Ethereum’s securities. We are harnessing the security of Bitcoin and ETH, the atomic swap contracts are minimal. Independently audited and tested to the max by a truly decentrallized network before going live over the course of the past 5 years.
Unlike wrappers and bridges, these coins are not re-bonded into Portal and are not honeypots. The community treasury does not contain exposed user’s funds. The exposure is limited only to the token which is being traded — NOT what is bonded. This is the main difference between the Portal project and other so-called false “cross-chain DEX” projects. The flaw in bonding/wrapping is double the exposure for a breach in security; be it theft, risk, hacking. It’s like making a duplicate -or a triplicate- of your house key. The Portal project is designed to protect your key- the reliance on simple and native atomic swaps means there isn’t anything to expose. This is possible through the use of Fabric Protocol technology, which is an internet built on the layer 1 blockchain of bitcoin — the timechain itself.
2) Bitcoin provides the security; no need to implement a new system and attempt to garner superior adoption. Bitcoin is the most decentralized and secure system and we think it is the monetary layer. If you want to build functionality, financial contracts, and beyond, it makes sense to build it on top of the monetary layer vs any other layer. More importantly, layers of functionality enable bitcoin to capture the value, but not the risk of a failure of a layer 2 system.
We’re coming up on time and that’s all we can do for today
We’d like to remind people that Portal has its public sale toward the end of this month on one of the best launchpads in the world, Republic. Our legal team has done wonders to allow us to even be open Americans investing, which is rare these days.
To participate in the sale, you must be registered on the whitelist at https://portaldefi.com
