hi I'm not I founded a Bitcoin company
in 2014 been doing this for a little bit
got into aetherium early 2017 and I want
to talk to you about a project called
TBD see where we're bridging Bitcoin in
aetherium it we're doing this in
collaboration with what we're calling
the cross chain group James press which
Summa and a couple other folks so why
are we all here I know some of us came
for the unstoppable code some of us came
for the world computer but the latest
meme is D Phi so D Phi is around a half
billion dollar market give or take the
last month's market gyrations and
there's this like I think we're excited
there's a new there's a new narrative
but I guess my question is is is d Phi
growing and as D Phi as exciting as we
think because when you look at half a
billion dollars and you compare it to
again these are old numbers the 24
billion dollar market cap for ether you
start to realize maybe we're actually
going to hit a ceiling soon and so when
you look at projects like maker you look
at other the other projects that are
limited by collateral we're all kind of
thinking how how can we get access to
more value on this chain up to do more
define so some people are interested in
security tokens or real estate I'm not
I'm interested in trustless assets so
for me the next obvious pool of
collateral is Bitcoin which is a little
bit bigger than than the other two so
one way to frame this discussion is how
can we bring defy to Bitcoin that's a
little paternalistic I think a lot of
big corners who may or may not be
watching this would be like Bitcoin
doesn't need Defy but another way to
look at it is you know Bitcoin was was
the first defy be run bank now we have
cash how can we get loans so I actually
went to buy a house recently and I knew
okay my most of my life's work is crypto
this is going to be an interesting
experience and so I started looking for
what Lindner could help me out and keep
me from having to sell my crypto so I
finally found someone I got really
excited
and so I talked to this mortgage
provider and they were like oh yeah
we're totally crypto friendly we're so
glad that you came to us and so I said
cool what do I do
and I said sell your crypto just sell it
and come back in 30 days we'll pretend
like we didn't have this conversation
and then you can buy a house no so well
you know one way is how can we bring one
way to look at this is how do we
decentralize finance with Bitcoin
another is how can we make Bitcoin
available everywhere so aetherium has
this opportunity to be an interrupt to
bring assets on to the chain to work
with defy today how can we make Bitcoin
one of those assets but you know for the
engineers in the room also just like
wind side chains so we've been talking
about side chains and interrupts since
at least 2014 probably earlier and so
far they've been for the most part
vaporware a bunch of El ones right now
are working on bringing out something
new but it would just be really
intellectually satisfying to see a side
chain between Bitcoin and aetherium
today so people have been trying to
solve this problem mostly through hacks
so the first big hack that people have
used our Federation's if you guys are
familiar with WBT see in the etherium
space liquid in the Bitcoin space and
the basic idea behind a federation is
that you have a bunch of folks that come
together you trust them they hold your
Bitcoin and then you know they'll
they'll validate somewhere else so
what's great about Federation's you get
your price exposure that defy is so
interested in and you have a super
simple implementation okay so anyone in
this room I imagine who has touch
solidity before could create something
similar to W BTC today which is great so
why are we here so the reason that I
joined crypto was to own my own money I
don't know if you guys saw Taylor's talk
from my crypto the other day but it was
a little bit about back to basics why
are we all here we're here for
individual ownership consent and
sovereignty and the second you take a
peg a Federation based peg that's that's
trustful you've lost that so you've lost
seizure resistance you've lost you've
lost any sort of like trust
nests of this system so the other big
approach the people are using to get
price exposure on aetherium their
synthetics basic idea you guys are
probably familiar as we lock up a bunch
of eath and then there's some sort of
algorithm does something with it so that
you peg a price to an external asset so
synthetics are great
there's censorship resistant so for
example if you have like something
that's pegged to a stock on aetherium
you can be confident that that's not
going to be seized from you you get your
price exposure and of course there are
downsides so there are two that I see so
one is is just that it's dangerous the
more synthetics you stack the more FX
risk you stack and the more of a chance
of like a Black Swan event happening
through all of our defy systems so if I
asked you guys how much eath would you
be willing to lock up to be confident
that that amount was going to be more
than one Bitcoin in six months I think
we would all have different opinions on
what that is it's it's a difficult
problem and then the other thing with
synthetics is you can't redeem them for
Bitcoin so if I'm trying to convince my
my Bitcoin friends from from the earlier
earlier 2010s to use a system like this
they're not interested in any attack
synthetics they want to know they're
using Bitcoin on aetherium so what's my
desire what do I really want that I'm
not getting from these two systems I'd
like a censorship resistant fully
Bitcoin backed ERC 20 token so no trust
no kyc confident that any attacker is
going to lose money and that you can
always get back to your Bitcoin how so
before I dive into the sidechain
mechanism I'm actually going to give you
guys a super quick demo what we got so
far just to kind of like make it
concrete the way that we've piled up
these videos we'll see how it goes so
this is T BTC it's a pretty
straightforward app experience it's
actually a cross aetherium and bitcoin
dap you open up a deposit here you you
fetch a BTC address so you actually get
someone off chain to give you a public
key hatch
and then you pay one BTC you can use any
wallet in this example we use green
wallet it's I guess not any wallet it is
seg wit we would rather not stick with
legacy BTC and once this confirms I'm
pretty sure I see there we go good you
don't have to wait on the full 10 minute
confirmation for this particular video
you submit an SP V proof to the etherium
chain showing that you made a Bitcoin
deposit and it's actually safe for for
us to mint tea BTC on the etherium side
voila so what's the idea behind that
we're calling it a bonded multi
federated peg which is a whole bunch of
words relative to a pretty simple demo
the idea is that side chains have talked
about this two-way peg for years there
are a lot of problems with Federation's
that I've already talked about so how
can we fix them at one you can actually
watch the Bitcoin chain too
you should not trust entire economies to
11 of 15 multi 6 and 3 if you're going
to have to trust someone get them to put
down a deposit first so going into that
in a little bit more detail in T BTC
every Bitcoin that is deposited has a
new dynamic Federation that's been
created so we actually have our own
random beacon that we built on aetherium
and that is then going to sample
validators and they're going to come
together and they're gonna create a new
wallet
to bond all the Federation members
obviously you guys know what we're gonna
do with the bond but the basic idea is
make sure everyone has skin in the game
before you accept them as a validator
read Bitcoin history so again if you're
familiar with solidity obviously we're
not really reading Bitcoin history what
I mean is someone off chain is providing
SPV proofs from the Bitcoin chain to
aetherium
and then finally what are we gonna do
with that bond so if someone misbehaves
we slash but typically when you're
talking about slashing at the consensus
level you just want to like burn it to
the ground
right you don't want that token to exist
anymore and you want the person who
misbehave to feel it but here slashings
not just punitive
we actually use the funds that are
slashed to make sure that that the peg
is hole so if someone does misbehave in
a system like this not only do we take
their money we take their money we use
that to buy bhakti BTC and maintain the
supply pack so I don't have a slide for
this going off script a little bit but
what do we need here we obviously we
need a price feed so originally the the
v1 spec of TB TC just has a centralized
price feed it's even simpler than makers
makers v1 median Iser right and I put
that out and I knew I felt bad as a
system designer we were all unhappy but
you know we wanted to get the main that
faster but it was a lightning rod for
Bitcoin depositors they just could not
stand the idea of a centralized price
feed so since then I don't know if you
guys were around a couple days ago on
floor 6 we've actually been
whiteboarding a decentralized price feed
alternative we're calling it feed list
feeds so interested excited really to
share a little bit more with you guys
about that but I'm not going to go too
far into it now so the other question
that this brings forward is collateral
so there's a a 2.5 x collateral
requirement for this naively I say 2.5
because I wanted to be honest and choose
the big number but if you think about it
it's really more like 1.5 X collateral
because there's liquidity on the
etherium side but actually through some
cleverness and by allowing the Bitcoin
depositors to collateralize against each
other you can get it down closer to a
1.4 total collateral so some takeaways
from this it is expensive to run it's
more expensive than getting GOx t' or
sorry less expensive thing getting Cox
Cox is very expensive and it should be
good for youth as well we are still
walking up eath and we do fall back to a
synthetic in the case of misbehavior so
you know it's Def Con they're devs here
I want to invite you guys to check out
TBT seed Network if you are interested
in building gaps on Bitcoin if you're
interested in using Bitcoin is
collateral and your defy project please
come talk to me talk to James pres rich
or one of these other guys who are all
kind of involved with this project
it's gonna be sweet and thanks a lot my
name's Matt Longo you can follow up a
little bit more with the cross chain
group as well
so we've got three minutes guys if
anyone has any questions around t v-- TC
i'm happy to give you guys some more
details ok guys well that's everything
I've got so thanks a lot looking forward
to talking to you after
you