Builder’s Talk: Portal Gate x ScalingX Twitter Space: Recap.

Singularity
2 min readAug 15, 2023

In a recent engaging discussion with ScalingX, our Founding Contributor, Jemma Xu shed light on the intriguing intersection of privacy and compliance in the rapidly evolving landscape of Web3. The conversation delved into various aspects of this complex topic, highlighting key thoughts that challenge conventional notions and offer new perspectives.

Let’s recap the highlights from the session:

1) Darkpools:
This was the key topic that was discussed during the AMA as we highlighted their importance as a long-standing legal repertoire in traditional finance (tradfi). Stressing their legitimacy as trading venues, providing exceptional privacy by concealing prices and orders in magnitude and size, Darkpools play a crucial role in protecting against Miner Extractable Value (MEV) and are advantageous for handling substantial block trades. Furthermore, their usefulness for privacy-centric traders brings a thought-provoking aspect to the ongoing discourse about privacy along with adding an extra convenience to the overall DEFI ecosystem.

2) KYB/KYC in Traditional and Web3 Finance:
We drew parallels between Know Your Business (KYB) and Know Your Customer (KYC) procedures in both traditional and Web3 finance. While these compliance measures have often been criticised for failures when bad actors slip through the net, the discussion emphasised that they don’t serve as foolproof barriers. Similar to their role in traditional finance, KYB/KYC processes in Web3 are expected to create friction for malicious entities, prompting bad users to gravitate towards permissionless privacy solutions where there is lower barrier to entry. This insight challenges preconceived notions about the efficacy of KYB/KYC and its applicability in the decentralised domain.

3) zk-Proofs, Anonymity & Compliance:
One of the most intriguing takeaways from the conversation was the co-existence of anonymity and compliance facilitated by zero knowledge technology. It allows the verification of compliance without disclosing the identity of the user undergoing off-chain KYB/KYC procedures. This redefines the boundaries of what’s possible in the privacy-compliance relation.

In summary, the AMA session addresses the synergy between privacy and compliance leveraging zero knowledge technology. Exploring darkpools’ significance and the meticulous execution of KYB/KYC procedures using zk technology provides insights into how Web3 navigates intricate matters. Moving forward, these ingenious concepts will undeniably play a crucial role in establishing privacy and regulatory compliance as integral components of Web3.

Listen to the conversation here: https://twitter.com/scaling_x/status/168925829476926668

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Singularity

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