I'm Warren I'm from Starke where our
mission at Stark where is to use proof
systems to bring scalability and privacy
to blockchains we are a team of slightly
over 30 based in Israel we've raised the
slightly over 40 million dollars in to
equity rounds plus a generous grant from
the theorem foundation and the first
product we're focusing on right now is a
start based scalability engine for
exchanges and what I'm going to talk
about today is how stark it helps solve
the blockchain scalability problem and
then I'm going to describe the stock
based exchange engine that we've
developed
so in January 2018
in the middle of the US government
shutdown President Trump took his first
State of the Union address and for some
reason he neglected to mention two of
the most important things that happened
right about then which is that the start
paper was being published and Sark where
the company was incorporated and we
started working at last Def Con we
demonstrated for the first time working
implementation of a stark prover and
verifier running in a browser on a
smartphone using web assembly this was
the first time this was demonstrated up
until then Stark was widely regarded as
a very promising technology but one that
would take years until any practical
implementations come out in January this
year we demonstrated a first demo of a
stark exchange Starke which for the
first time had a verifier running is
aetherium smart contract at that time
the the scale of the system was 10x data
theorem the throughput the system could
support is 10x out of a theorem we're
constantly working on improving that and
two months later that jump from 10x to
200x in June we ran in collaboration
with 0x on Rob stone on the test net at
the alpha version an alpha version of
Stark Exchange stock-exchange stark
powered exchange which ran a few weeks
of actual live traffic from from by
Nance only last month we hosted in Tel
Aviv the Star Wars sessions conference
which also included a star
1:01 open workshop for developers where
participants could build a stark prove
er from scratch and we're constantly
working on improving the system scale as
I said before the best running
implementation we have today is 700 X
the throughput of aetherium which brings
us to over 2000 trades per second that
we could run which means that the
average cost in terms of gas per trade
is under 200 gas now this is always
going down and specifically with the AP
2028 coming in Istanbul which we're very
proud to have shepherded through that's
going to go significantly lower than
that and our next MEC next milestone and
this is in large part we're going to
talk about today is to deploy on
maintenance to launch first commercial
release of a start powered exchange
comes annually with a partner but first
what's dark so Stark is a zero knowledge
proof protocol with specifically nice
characteristics the main ones are that
both verify running time and the proof
size itself are only logarithmic with
regards to the original computation the
prover running time is is nearly linear
and with nice constants actually against
any other protocol that we've compared
it against to date it's at least one
order of magnitude faster Stark is also
applicable to any general computation so
generally anything you could code star
could also true and then there are two
cherries on top of that one is that Sark
requires no trusted setup and the other
is that Stark has hardly any
cryptographic assumptions so the only
thing you need to work for first Stark
to work well is the existence of
cryptographic hash functions which makes
it a very future proof in two aspects
one is that it rests on the same lean
and battle-hardened crypto that's pretty
much the rest of e-commerce that's been
around since the 70s really and two it
also makes it plausibly post quantum
secure
so how can proof systems and Starks in
particularly help with scaling
blockchains so permissionless block
chains are often referred to as a
distributed system but actually if you
look at them more closely you can see
they're actually more of a duplicated
system you have a large number of nodes
but each and every one of these nodes
actually performs all the computations
and stores the full state of the entire
network so this boils down to a very low
glass ceiling in terms of the amount of
operations the network could actually
carry for instance in the case of trays
that we were handling right now
typically on chain trade today cause
something between hundred fifty and two
hundred thousand gasps which means the
network can't do more than three or four
trades per second in theory but what if
we shift this balance and for a given
computation we'll have one party run the
heavy computation and on top of running
the computation itself we'll also do
some extra work and produce a proof a
stark proof attesting to the validity of
those computation now what the rest of
the parties need to do is just to verify
that truth which like I said before is a
whole lot less work than the original
computation itself
note that with proof systems there is no
trust assumption with regards to the
prover as the verify never accepts
invalid proofs so you only need to trust
the verifier it and it would never it
would never accept any false claim so
this is not a fraud proof mechanism
where false claims may may be accepted
and hopefully later overturned in this
case only valid statements only valid
States will be updated on chain so in
the blockchain case instead of running
all these heavy operations many times on
chain you could basically take the heavy
heavy lifting computation wise off chain
it'll still be heavy but it'll be done
at AWS cost rather than a blockchain
costs and all that's left to do unchain
is just the verification this requires
very little resources now Stark is
especially a good fit for this because
of these nice attributes that I
mentioned before this way you could
actually increase the network throughput
by several orders of magnitude
while still enjoying the security of the
main chain but you may say well this is
nice but this is good for big
computations and aren't any big
computations are in theorem today and
you'd be right actually the network
network stay exhale limitations actually
prevent big computations from being run
on it today so to this I say two things
one is that using a Stark based system
you can have big computations so if
you're a developer who's not developing
some V app today because you're
concerned the network won't be able to
carry it then you're highly welcome to
come and talk to us and the second thing
is that for simpler computations such as
trades for instance what we could do is
we could batch a large number of small
operations together in a big batch and
prepare one proof attesting to the
validity of the entire batch and get the
same scale effect that way because again
it's the same logarithm equality of the
verifier so verifying a proof for a very
large batch hardly cost more than
verifying one for a smaller batch so up
until now I described how proof systems
and star could help scale blockchains in
general now I turn to the engine that
we've built on top of this which is a
Stickle ability engine for exchanges and
now I'll briefly explain how that works
so these are the main players in this in
this drama at the top left you have
Alice and Bob there are stars and pretty
much any presentation here they're
moving from room to room so there are
the users you have the exchange itself
then you have the stark scalability
engine that includes the prover all this
is off chain and then on chain you have
two main contracts one is the Stark
verifier and the other is the Stark
Exchange main contract that keeps the
system state so users trade on the
exchange pretty much as they would today
on any centralized exchange the main
difference is that they need to sign
each and every order with their own
private key now this is an important
feature because this is basically the
core of this system being non-custodial
which means that neither the exchange
nor the stark exchange engine can
actually move people's funds around
without their signatures so if the
exchange is hacked nobody could actually
touch
the the funds of all the people that are
there the exchange also pretty much the
same as today does the matching and then
it sends the stark exchange engine all
the trades to be settled later on chain
so the the users in the exchange are
pretty much as as any exchange today the
users don't need to wait for anything
coming later they could continue trading
immediately what the stark exchange does
first it batches a large number of
transactions of trades like I said
before and then for each of these trades
it inserts within the proof a proof that
the trade itself was valid so we need to
prove things like the orders were
assigned correctly and the user has had
enough tokens to transact and the
transaction balances each other out
things like that for every trade once
the proof is ready it's sent on chain
and then the Unchained verifier accepts
that proof if and only if it's valid and
once accepted it also updates the stock
exchange main contract and updates the
state now this would be a good time to
explain how we don't just take most of
the computation work off chain but
actually also most of the storage so
instead of keeping the up to date
balances of all the users on chain which
costs a lot we take that off chain we
store that as part of the stark exchange
engine we organize that as a miracle
tree and only the root of that Merkle
tree is updated on chain so this means
that within the proof in addition to
attesting to the validity of each
individual trade we also attest to the
validity of the change in States so the
the state before the batch the state
after the batch correctly depict the
actual changes that are part of the
batch one of the nice things about the
stark power exchange is that users can
now trade on the exchange from their own
private wallets so the way this works is
when the users let's say Alice wants to
trade on the exchange she first deposits
funds to the exchange this is a regular
theorum transaction to deposit it to the
exchange contract and then it's picked
up and written on chain as well under
her private key so this is pretty quick
and the rabbit in the picture and then
while on the exchange everything is very
facets again the
same as any centralized exchange today
hence we have three rabbits here but
here we have a small issue
what if Alice needs this money on chain
now for instance to pay Carol for
something so pen Carol is also a
regularly theorum transaction which is
pretty fast but her get her funds off
the exchange she need to withdraw and to
withdraw as a slightly longer process
because she'd have to wait until the
proof is actually accepted on Ching
hence the turtle so what we need here is
a fast turtle so luckily we found one by
the way turtles actually walk very very
slowly but they swim quite fast almost
as fast as Usain Bolt runs so the
equivalent of the turtle this neat
mechanism that we've devised that we
call conditional transaction so a
conditional transaction is something
that happens off chain only if something
else occurred previously on chip and
I'll give an example with this case of a
fast withdraw so Alice wants her money
fast on a theory so the first thing she
does is she signs the conditional
transaction transferring money from her
off chain accounts the exchanges off
chain accounts pending the exchange has
did did a similar transfer on chain
earlier so she signs that and provides
that to the exchange operator the
operator first checks that she has
enough funds off chain to do this and if
she does it just moves the money on on
chain to her account so Alice now got
the money within one aetherium block now
the exchange could actually submit this
operation this off chain operation
through the proof and since the unchain
operation it relies on has already
happened this will now be accepted so
the transaction will be executed and now
the exchange will get in funds off chain
so Alice could use this mechanism to to
get a quick withdrawal another thing she
could do is you get actually they
actually ask the exchange to transfer
the money on chain directly to Carol and
then the conditional transaction will
rely on that on chain transaction so
what happened here is that Alice
actually paid Carol Unchained directly
from her off chain account this could
actually work with anything not
necessarily just paying care about
anything you could actually do on chain
on layer one or that could be attested
to on etherium so it could even be
things like paying Dave on the Bitcoin
network since the Bitcoin transaction is
something that could be attested on on
etherium or it could be open a CD peon
maker or any any other defy application
that relies on their one alice could
actually directly access that directly
from her off chain account at the
exchange okay so far I was talking with
my engineer hat on but now let's all put
our business hats on and take a look at
crypto trading today from the
perspectives of both the exchange and of
traders and I want to briefly touch what
historic powered exchange can provide
them with so today when people trade
they pretty much trade on centralized
exchanges a centralized exchange being
fully custodial is basically just one
big honey pots of tokens which is highly
risky and now what a trader could do
with this risk is one thing they could
do is they could just accept it as part
of the cost of doing business and take
the risk
note this is not just a theoretical risk
it's estimated that last year somewhere
between 1 and 1/2 billion dollars were
worth of token were hacked off exchanges
another option for traders is to limit
their exposure to any one specific
exchange and split their our funds
between several different ones this is
not necessarily capital efficient and it
basically boils down to both trader and
exchanges leaving money on the table but
with a Stark we're powered exchange you
have other options in terms of custody
you could you could do self custody like
isolate like I explained before you
could have your custodian trade for you
on the exchange you could have even more
complex schemes in terms of custody
all these boil down to this honeypot
being eliminated and the risk being
great
lowered another benefit of a stork
powered exchange is that it's much
easier and in this scenario to move
funds to an exchange often exchange in
between exchanges so this will also
greatly help traders from a capital
perspective so today if you trade crypto
you have the option you could choose
between risking your money at a
centralized exchange or enjoying low
liquidity and a poor user experience at
a decentralized one with a star powered
exchange we essentially break this trade
off and you can enjoy the scale the
liquidity and user experience of a
centralized exchange without taking this
honeypot counterparty risk now note that
what we've been building these last few
months is a production grade system it's
not just a stark stack it's a heavy-duty
system that it could actually handle a
large scale in production and could be
integrated to any exchange so we're
already already saw that in addition to
this using these neat mechanisms such as
conditional transaction and some others
that I have haven't described here users
can also seamlessly move between their
off cane account at the exchange and all
the wealth of the defy application
that's currently exists on atheria they
could use them directly we also talked
about how in addition to trading this
system also supports payments to
aetherium or even to other blog chains
but it doesn't stop here Stark is a
generally applicable protocol like I
said before so pretty much anything any
financial feature the exchange we want
to offer we could also include in a
stark truth so we can for instance
include things like interest-bearing
accounts and margin trading and do that
at scale while still remaining trustless
but this is not the end of it on top of
this you could also add front-running
protection I won't have time to go into
that right now but you can come and talk
to us later
and notice that up until now we haven't
even
used yet the zero-knowledge quality of
stark add back to the misc mix and
things start getting really interesting
because you could start having privacy
now today as far as privacy go goes you
have the exchange operator basically
telling telling you trust me I'm not
going to use this to your disadvantage
now with a start based system you could
actually have real privacy including
privacy from the operator himself so
from this perspective start to do to
privacy the same thing that it did to to
custody before now you don't need to
trust the operator because they're good
because they're a good guy but you can
trust them not to cheat because they
can't even more importantly you could
have regulated privacy so you could have
privacy including from the operator
while still ensuring that all the
regulatory requirements are being met so
things like truly dark pools suddenly
become possible note that with these
features that actually makes a Stark
powered exchange not just the best
crypto exchange it actually has features
that don't currently exist on any
traditional exchange as well so with
this an exchange powered by by Stark
where will not just be the best crypto
exchange out there but actually the best
exchange out there crypto or non crypto
so one more thing we are very happy to
announce our first commercial
partnership we have partnered with
diversify to bring a stock or powered
exchange to real users on production
come January and I'm very glad to invite
Danny on of the CEO of diversified to
talk about our cooperation
[Applause]
thank your for the fantastic
introduction I'm here at diversify we
believe that users should always have
control of their funds accessing
applications through the safety of the
choice of wallets now when it comes to
trading so far this has come at the cost
of a great trade off his word mentioned
the trade off with speeds liquidity user
experience and even gas costs now over
the last 12 months we have worked hard
to bring our users a great user
interface getting feedback from our
lovely users we have developed a way to
match against the external liquidity
pools to bring our traders fantastic
markets and now with the help of our
friends from Stark where we have the
last piece of the puzzle instant
settlement low fees and high scalability
so the days of trade-offs when it comes
to non-custodial trading will soon be
over
now I'm going to do a quick demo to show
you what this looks like practically
this is a pre-recorded demo those of you
who've tried using the Internet will
probably understand why so here we have
the diversify trading interface on the
right hand side we can see our balances
so here we have our own chain balances
and our off chain balances locked in
Stark in green so we have just under a
thousand bucks ready here we're gonna do
a trade to show you what that looks like
so the green is basically we have
available to trade now so we're placing
a trade let's have a look at the order
book now this you can see this order
book is incredibly thick so we can place
a trade of like over 100 eath without
moving the price at all and the reason
why we were able to do this
is because since the users funds are
locked in stark we can guarantee
settlement ie everyone has followed
their end of the deal so we can match
against an external liquidity pool in
this case a centralized exchange which
allows us to bring this to our traders
[Music]
now let's go ahead and actually place a
trade we're gonna be buying some e which
this from a few days ago so this person
is happy that they did this probably and
so we're gonna do a simple order just to
execute quickly at market price and
we're going to select the amounts and
we're going to buy now we're going to
sign this with our with our signature
and it's already executed actually we
missed it so it's been executed we can
see it in our history instantly and more
importantly it has been also settled
instantly so again if we look at our
balances we have our new balance
available to trade so as as we mentioned
earlier the trade offs in experience
when it comes to noncustodial trading
will soon be over now this has been a
demo however this will be live the
beginning of next year so please stay
tuned and give it up for a stark web
and I think got some yeah that's it I
think we do have time for questions if
anybody wants ask yeah oh sorry I just
step up to the microphones with my ass
yeah great great talk
um I'm curious like what do you see as
the advantages of aetherium for Stark
where to build on like what you know got
you all to build up on this and and and
what do you see as potential sort of
downsized to aetherium that might make
you want to move this technology
elsewhere if in either of their present
today or if they became present so Stark
is not specific to theory it's a general
technologies not even specific to
blockchain the reason we chose to focus
on a theorem is because it has it has a
few a few things we need one is it has a
rich enough language for us to be able
to build a verifier that can run on
chain for instance Bitcoin doesn't but
other chains do have it and also has a
very big developer community so there
are a lot of applications being
developed there is a lot of there are
exchanges running on top of the theorem
there's a big bigger ecosystem but like
looking forward we're not gonna stop
specifically at the theorem we could
build similar things and other chains as
long as they have a rich enough language
Thanks can you tell us about the data
availability program for the miracle
tree that hold the state of the exchange
so this first phase the way we're gonna
handle data availability is that we're
going to have basically a committee of a
few trusted parties that's going to
accept all the data and for each proof
that we submit on chain the proof will
only be accepted not just if it's not
valid but also it needs to be signed by
enough committee members that have
indeed attested to the fact that they
have the data and that they have indeed
calculated and saw that this data maps
to what we've submitted as part of the
truth
thanks to the talk did I get it right
that the metro agent is centralized and
you just can say I don't want to
executive order that is true at this
phase we just will start to find the
settlement process the matching is
centralized now this has ups and downs
the main benefit that you have here it's
a lot quicker and you can't front run it
the downside is yes it's still sensible
do you have any kind of solutions for it
or so so we have thoughts about how we
could Storify the matching as well but
we're not there yet get it thank you
that that will be coming and sometimes
like thank you for talking it sounded
very bright and shiny like kinda without
disadvantages solving a lot of problems
even for me it sounded like it's going
even into later to territory by my
problems it solves so there should be
some drawbacks first of all it is the
layer to solution you're right
the reason it's like it's a lot simpler
than many of the other layer to
solutions like in there to you have I
refer to you briefly before you have a
two major concepts you guys really use
fraud proofs or validity proofs so fraud
proofs is where you say okay let's say
we have some channels of something in
layer two we update that on chain and
we're optimistic about it so we may
update things that are false but we
expect somebody to catch that and
contest that and then overturn it that's
a much more complex system of what we're
doing here and it has a lot more
drawbacks what we have here is since we
have the power of Stark or proof systems
basically this means that whenever we
submit a proof only valid proofs will
actually be accepted that only valid
states will be updated on chain so it
makes things actually lot simpler
because there are a lot less cases to
consider it's not a simple system
altogether but that's why we weren't
working on hard on it for the last few
months and slightly more than that and
we believe it the user experience at the
end of the day is pretty pretty seamless
don't feel that you're running on top of
something complex then we one more quick
question
do you need some kind of set of
validators or some specs separate
network that will begin some some things
or it just works completely on normal
smart contracts in theory so on chain
it's just a regular smart contract there
is a verifier contract there is a main
main contract of the exchange all on
chained off chain we have this Sark
engine that we're operating that runs as
part of the versa Phi in this case and
the only thing you have on top of that
is this committee that I mentioned
before that you're going to have several
other parties that are not us that will
actually need to get the data and attest
to the fact that they've seen it it's
valid thank you that's all so how do you
compare yourself with idec's with ibex
yeah well I Dex today as far as I know
don't yet have any such scalability
solution so they actually do the
settlement on chain I think they're
planning to what I did announced earlier
to solution yesterday okay I'm not too
familiar familiar with a solution as far
as I know it's not true system based
which means it's like in this category I
just referred to that's called frog
juice which means you could actually
update false things on chain and
hopefully later overturn them which
makes it a bit more prone to attack and
complex but I'm not too knowledgeable
about exactly what they did
what are these statics your quacky oh I
see and also would you open like margin
trading in the future oh it's on a road
map so kyc is really question to you
it's not a matter of stark Dixit's yes
so um yeah can we see I guess depends on
the on the exchange itself and in our
case we don't require kyc because all
the assets is traded on diversify are
basically crypto - cryptos it's only
digital assets and we don't include
securities and sort of jurisdictions are
excluded to be able to create this kind
of friction this connection the exchange
now margin trading from the stark
perspective we're definitely planning to
handle that which means that the stark
engine will be able to support it again
it's a matter of it's up to the exchange
of when and how exactly they support any
feature I know if you have a statement
on that yeah so thank you very much
[Applause]
you