There’s NO Chance Trillions Move Onchain Until We Solve This

**SPEAKER_1** (0:05)
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**Scott Melker** (0:30)
Everyone wants trillions of dollars to move on chain, but there's one massive problem. Public blockchains are too public. If you trade, pay someone or move capital, the whole world can potentially see what you're doing. That does not work for real finance and it definitely does not work for institutions. Zama is trying to fix that by building what could be the HTTPS layer for crypto.
Privacy by default on public blockchains like Ethereum and Solana. Today, I'm talking with Ran Hindi from Zama about confidential stablecoins, private DeFi.

**Ran Hindi** (1:02)
You can take your shielded confidential USDC tokens and you can earn yields on Morpho Vaults exactly the same way as if you would with regular non-confidential USDC tokens. There is no downside, zero. There is no downside to having your assets shielded. It is pure upside.

**Scott Melker** (1:19)
Institutional adoption.

**Ran Hindi** (1:21)
There is just no chance that we're going to see trillions moving on chain unless we can solve confidentiality and privacy. That's where Zama comes in. We held the USDC confidentially.

**Scott Melker** (1:32)
And why encryption may be the missing piece that finally brings global finance on chain. Let's go.
So I think it's fair to say that there's been a problem in crypto, where institutions who need full confidentiality have been unable to get that on private or public blockchains. Is that accurate?

**Ran Hindi** (2:06)
I think it's even worse than this, actually.
Today, if you want to use a public blockchain to pay someone, everybody knows how much you pay that person, how much they have in their bank account, how much you have in your bank account. If you want to trade, everybody knows what you're trading. They can front run you, they can copy trade you, which is huge in terms of, let's say, it creates a lot of loss opportunity for traders. But importantly, I think there's a lot of people, and especially those with large amounts of money to manage, they just don't want to use a technology unless they have some level of confidentiality because they have that in track five. So it's not just institutions, I think it's finance that requires confidentiality and there's just no chance, no chance that we're going to see trillions moving on chain unless we can solve confidentiality and privacy.

**Scott Melker** (3:04)
Maybe it would be constructive to talk about what the Internet looked like before that existed. What was the solution and what the Internet looked like afterwards?

**Ran Hindi** (3:13)
Back in the 90s, I don't know if you remember. How old are you, by the way?

**Scott Melker** (3:19)
I'm 49, I remember.

**Ran Hindi** (3:20)
Okay, you remember. Great. I remember, too.
So remember, there was something called the intranets, right? So an intranet was a private network of computers connected within your organization, and you could talk to your coworkers, and you could have like a shared database. You could exchange information. And sometimes companies would connect their intranet to other companies' intranet to exchange data. This is basically how institutions have been using blockchains up until now. Every one of them has their own private chain, and they talk to each other, but they're fundamentally siloed. What the intranets brought was one global public network that everybody could use. It was a way for people to sell products to anybody in the world. It was a way for people to access and share information with anybody in the world without having to have this sort of like intranet connectivity between everyone. This is what public blockchains like Ethereum and Solana are enabling for financial transactions. One global network everybody could use for transacting financially.
The problem, however, in the intranet in the early days is if you wanted to buy something on Amazon or any e-commerce website, you had to put your credit card information and anybody on the intranet could see it. So paying something online meant revealing your credit card data and what you were purchasing to anybody in the world. This was a very big...
It was preventing effectively mass adoption of e-commerce and internet. So people invented something called HTTPS, which was simply a layer of encryption on top of the internet, which allowed you to share information privately with a recipient. So when you sent your credit card information on an e-commerce website, you sent an encrypted credit card number that only the e-commerce website could decrypt and they could actually see it. And all of a sudden, you just enabled global commerce on a single shared network. And from that, we started having private communications. When you're sending a prompt to cloud today, your prompt is encrypted. People online cannot see what you're sending to cloud. So everything that we have today, Google, Entropic, OpenAI, Amazon, all of those companies exist because we encrypted the Internet.