Emurgo + Ergo EXPLAINED // Cardano Oracle Pools?

by birtanpublished on October 2, 2020

Ladies and gentlemen welcome back to the channel today i have alex trapernoy the core developer at ergo as well as robert from the emergo side who's a research and development head over there and we're going to talk today about some of the exciting stuff happening between

Emergo and ergo and this this new amazing project that we have to talk about today so first of all thank you gentlemen for joining uh thank you

It's uh absolute pleasure to be here so nice to be on this podcast absolutely so really quickly before we dive into the nitty gritty today i'd love to just get you know 30 seconds to a minute about

Each of your backgrounds so folks can get to know you um all right so i'm in the space science like 2011 during development around bitcoin current size 2015. so i used to be

A co-developer of nxt uh the first proof of stake view for currency back in 2014-15 so i used to be co-founder of smartcontract.com which then pivoted into chain link

Right now pretty well known and yeah i'm also uh yeah i was in ihk and uh yeah still officially there so i was one of the first employees in hk alright so yeah i made a lot of things

In the space for many years and yeah science 2016 like 2016 so i'm involved in uh so first design and uh from 2017 also recommendation and uh yeah i'm still there

And uh it seems awesome yeah that there's got a lot of experience in a lot of different projects which i think really helps when you're building something new

Absolutely robert oh yeah yeah definitely yeah so hi i'm robert bernanke um i'm i guess right now head of uh research at emergo and also on the ergo foundation

Um in terms of my background i've been adjacent following you know part of cryptid to some degree since 2013 um you know when i started i was i am still pretty young but back then i was quite young

Yeah and so um you know at first i was just going to you know like bitcoin atms finding them in toronto getting my first bitcoin i checked out some of those you know early projects

You know like feather coin purecoin some of the first mistake and more of the uh interesting uh coins at the time that didn't turn into anything sadly of course yeah

But over time i was watching crypto ever since 2013 kind of excited about the tech but um i never jumped in until around 2017 and that's when i got into uh cardano and since i had a background functional

Programming that was something that kind of got me interested in getting on more of the development side because i already had a background understanding all of the tech

And then since then um i've been pretty heavily full-fledged into blockchain and i used to have an e-commerce business and i moved from that into full-time now working

As a beautiful researcher since uh end of 2019 and so now it's awesome part of emergo uh working on both some polluted smart contract stuff in the background but now a lot of stuff uh focused on the utxo

Model as a whole and with that ergo first because that's already live on mainnet with gogen and cardo coming in the near future right priorities first got it that makes

Total sense and so i guess for folks that are wondering okay what is ergo i think it's a great question to post to you uh and obviously a lot of news started breaking in the last couple of weeks about ergo so

People are really interested so if you could give your the simplest explanation for someone listening that has no clue what ergo is what would it be um all right so uh in the first place

It's uh well solid uh for work cryptocurrency uh going from the first principles of bitcoin uh but also it designs and implemented from scratch

Right and well uh every aspect of bitcoin and uh yeah also ethereum uh actually so well all the aspects of those foundational cryptocurrencies were

Considered so it's a kind of total framework of classic cryptocurrency so so we are we are not sacrificing right anything about security rights yeah well consensus

So yeah i mean whenever possible uh we are well uh taking care right about uh security and so on but yeah also we are very innovative and uh yeah herbal design is uh based on

Research like dozens fantastic and i guess when you look at the when you look at the news and you look at a lot of the like the structural the structural

Differences between something like ergo and other projects you have fundamentally a utxo blockchain an unspent transaction output blockchain that is capable of you know performing

Uh or executing logic much like something like ethereum would do right it gives you kind of the best of both worlds and that's how a lot of people i think are looking at it which i think is very interesting if i

Could actually jump in here um one thing that you could kind of one angle rather that you can kind of look at this through is ergo in many ways is kind of a natural continuation of

Bitcoin in many aspects where ethereum kind of decided to take bitcoin and say hey that's cool let's throw out half of it yeah shove in some imperative programming

Everyone loves javascript even though there's a million problems with javascript and then here we have solidity and this new evm and i can't walk ergo takes a much more

First principles approach in many ways where it looks at okay bitcoin started in the utxo model and there was kind of an issue where bitcoin script wasn't expressive enough it's not turing

Complete and you can't do a lot of stuff you can't do a lot of smart contracts and what's actually some of the research that alex and some of the other researchers

Uh behind ergo have figured out is that you don't actually need touring complete smart contracts which means you don't have any smart contracts that can do anything and have infinite loops

But you need to have contracts that across multiple transactions are touring complete right so that means maybe not in one contract or in one transaction everything happens but maybe you can split it into two or three

And because of that you can get a lot of more benefits in static analysis and also the way you program in the utxo model becomes a lot more

Specific where instead of in ethereum you define functions which is kind of a standard way of programming in ergo in the utxo model and in pluto soon too what you do is you specify

Valid transactions and so your contract says um you can only spend this utxo if x y z all are true if any of those are not true then it doesn't work and so this specificity

Means you have a very declarative form of writing your contracts and so it's a different model but it also gives you some new benefits and it kind of brings along the whole uh idea of bitcoin and you know in some

Ways for work as well and also um proof of work is uh using auto lycos which is a new uh proof of work uh that alex and some of the other researchers came up with that's pool

Resistance and so it tries to take some of the original wishes and desires of bitcoin extends them all and then keeps that whole utxo base and also adds privacy on top and so you have sigma

Protocols which provide native ring signatures in your smart contracts and that's actually a really really cool and it's one of the things that personally drew me to ergo

Is that it's the first blockchain on earth that i know of that you can have a very cheap and efficient uh privacy in your smart contracts it's not 300 or 26 dollars on ethereum that no

One's ever going to use because it's cost too much but it's actually usable for 25 cents yeah no i think that that kind of thing is extremely powerful and i think the

The space has been begging for in a lot of ways a project it takes a lot of the components that are out there in in different ways and then rethink them and put them all into one place

And so that's what originally drew me for as a research topic for myself you know drew me to ergo to try and you know have you guys on the show for sure two cents about contracts so you know already happened

Right and it was already pretty clear that ethereum which is not very uh friendly blockchain ability we use for smart contracts in ethereum right so basically

Financial contracts uh back then and uh yeah now defy is uh more subject right and um yeah so uh how to make those 99 percent of useful ethereum contracts that's a

Simple approach right and uh yeah so uh more secure some more cautious also well uh because ethereum's approach so it was pretty clear even back then but

Yeah it would be problematic right so the idea was well well even if we cannot implement right and yeah so uh we tried so many contracts so and we have many examples

Right of financial applications and more and uh it seems uh yeah we can uh pretty much yeah i mean i think it's it's also a dangerous approach to as especially as a a protocol developer

In this space to try and make your blockchain at least today do everything right saying like this blockchain needs to be the one thing that does everything because i think when you focus on that

You lose a lot of you you lose track of a lot of different metrics and a lot of different things that you can implement to make your protocol better and i don't think that there's going to be

A need for single protocols to do everything right i think that there will be there will probably be multiple protocols that you know take advantage of of different niches and different

Elements out there in the space so i think when people focus in on the you know the one percent that protocol might not be able to do i think you lose track of some of the real benefits that come from

Protocols like ergo but i think beyond that you look at you look at ergo and you look at the fundamentals and robert you touched on this a little bit before but one of the biggest dangers of d5 which

Actually in my mind is is fantastic thing for the space overall right is to have these really inventive new ways of facilitating financial structures and instruments and

Transactions but on ethereum two problems one is it's very expensive to operate and as a user to absorb the cost of making transactions but also coming from someone who does a

Lot of solidity programming myself there are no matter how hard you work and even if you get that third party audit you can fall into a trap door and find unintended consequences

In your code right and that is something that i don't think long-term people will be comfortable with as more and more money flows into d5 like applications so is that a place

That ergo is looking to play in that defy space yeah um in the d5 space that's actually the very first next step we're going into but i also wanted to touch on one

Comment you made before we go into that um in regards to getting that audit and you never know for sure that everything's safe one thing that's uh also really exciting for me and another thing that drew me

Into ergo because i joined uh i got onto he got into the community on the first day of the mainnet and so i'm there from the beginning but not before when i was just in you know

The test nets and yeah prior to that but one thing that really drew me is that uh with ergoscript it's essentially a subset of scala the programming language and

One thing that's available in the scala ecosystem is something called stainless and stainless is a formal verification framework and so since we have ergoscript

And the utxl model which makes our smart contracts in some ways a lot simpler since you don't have turning completeness in one contract in one transaction but across

Transactions this means indeed state space to formally verify automatically is much smaller and so what that means is that we can actually have these automatic verification tools

Integrate into ergoscript and then we can actually make claims and so this is why uh i think three months after the maintenance launch prior to maintenance launch alex and i think a

Few other people wrote a basic crowdfunding smart contract and it was pretty simple i think around 18 lines of code not too bad and i think three months after maynet

The stainless integration got finished to a good enough degree to verify similar smart contracts and in three months after mainnet launch we had a formally verified crowdfunding smart contract live on data

That was pretty exciting and i think the fact that we have that much power already is really indicative that there's a lot more to this model into this approach that's you know with ethereum they

Already have some form of verification tooling and it's getting there but how old is that ecosystem right right and it's still not that simple and there's a lot of barriers

And so i think you know as we go into this new wave of utxo based blockchains first prefer go cardano and who knows what's next right i think we're gonna start to see a whole new shift in that direction and

A lot of the benefits aren't entirely clear yet because it's just an entirely new direction and there's a lot to be found and that's exciting and so i think over the next coming months and

As now we're moving into d5 as you mentioned earlier we're really going to start to understand the problem space what new benefits are available to us as we begin to jump into creating new d5

Protocols and building all this core default infrastructure on the ctxo-based projects awesome yeah and i guess you know you started hitting on it there with with

Like with the tooling like what tooling is available to make smart contract developers or even you know to an extent application developers a layer above that make their lives easier and make it

Easier to build you know functional predictable applications on something like ergo that being said i think the biggest news that really drove a lot of people

To check out ergo in the first place was this um you know talk about oracle pools so this this structure in place with ergo and ergo tooling around oracles which of

Course with chain link and band and teller and all these other projects getting so much attention these days did you guys lay out what the core value prop is the core difference

Between what this oracle pulls from ergo is and the projects that are out there today sure so put simply oracles in most cases don't need a token

And i'll just start off by saying that in that it's great that some other projects like chain link have a token but in many cases it's a barrier rather than an asset

Okay and so just from the get-go one of the first things when building oracles on ergo it was just the we were talking we said hey we don't need to do an ico we don't need

To raise millions of dollars we want to build stuff that works and what we need especially as we're going to defy our data feeds and it's cool that you can have very complex oracles

That you know can do arbitrary api fetches dynamically or do some computation for you etc etc and that's a really cool part of chain link and all these other projects

But in reality who's really using that are there you know millions of people waiting in line for that maybe in 10 years when we really need all this interoperability we'll need that

But right now everyone's just pretty much focusing on defy and what does define need data feeds yep and so with that said we then looked into okay how is chain link

And all these other projects how are they doing data feeds and you have a lot of interesting approaches and the fact of the matter is most people just have a few big

Parties centralized actors and they all just post data on chain and you have some sort of accumulation smart contract that calls all the other oracles it pays them it takes their data

And hopefully the oracle's post on time because there's no disincentives or anything and then it just accumulates and then there's you know other interesting systems

Like for example uma and so there's a lot of other research that we're also doing in the background uh which i won't get too deep into but essentially what we're trying to do

Is we're looking at the basic problem of okay we want to have data feeds that work if you want data fees that work we need to put incentives disincentives and get a consensus

The basic accumulation contracts for oracle's that's typically used in ethereum don't really have disincentives and they don't really have this concept of the consensus where

You must have multiple people agreeing to like some average that's close together in order for them to be the new finalized data points and so oracle polls are the concept of let's

Have strict uh time divided into epochs so that oracle's must host within that time and if they don't then they get stake slash they have disincentives

There's for evidence in place and having this base framework of actual time and oracles who are tied together in a pool so they're actual entities which is less

Liable to civil attacks because let's say you know you me alex and three other people we know create an oracle pool we market that kind of like a state

Polling card we have a reputation to uphold and then we can also add fake slashing collateral and then we can add all these checks and balances so that we can start to actually

Have some assurance other than saying hey this is some big centralized trusted company you know let's hope that they don't cross they don't sell out you know and the fact is also

I'm sorry if i'm rambling feel free to stop me not at all but um one problem too is with a lot of the accumulation contracts approach on ethereum is that they're requiring these centralized actors

And because they don't have incentives disincentives or governance it pretty much impedes any small actors from running their own oracles or taking part in this and so one other goal with oracle pools is to make this

More decentralized and for the more average people who may want to start a business or maybe who have maybe a small business already and they can host their own hardware they have a

Technical ability and they can actually set up oracle's and they're trusted but maybe they don't have you know 500 million dollars they're not some major global corporation but they're still trusted figures and

Having oracle pools allows them to have a framework that they can work with other people who they can then make it work with themselves yeah it makes perfect sense and i guess

You know looking at again it's like the the ability to look back at what's been built and how things have been structured and being able to reimagine those things with with the problems fixed as as you

See it from an engineering side you know and i guess you know alex specifically for you having been involved in you know in chain link i think you talked about that earlier what became chain-link's smart contract

Um did did that experience sort of um inform in any way how this oracle pool structure came to be oh so i was there uh when it was smartcontract.com right yeah back in 2014 and uh yeah so

It wasn't about so oracle the idea back then was to have some decentralized network to execute uh kind of real-world smart products right so um well then uh yeah so the scope was

Narrowed to just oracle's yeah uh there was a possibility to execute some general purpose and then yeah so then smartconduct.com

Uh devoted to chain link right uh so for the oracle's problem because so well yeah when we are executing uh the contracts on real-world data right so well

The only problem we have in front of this is about oracle's right yeah it's it's a very uh hot problem right so well we investigated solutions back then so

Yeah so science 2015 uh all right so but the problem is uh very very hard but yeah it's it's also very much needed right to deliver real data on the blockchain and uh basically all the ethereum defy

Is working around uh pricing data right yes by oracle's and then yeah so this data is becoming very very critical to all the financial applications now holding bills

Of usd yeah definitely i mean it's a huge risk if your feeds are wrong massive uh yeah yeah and uh we already uh had some uh incidents right about that uh so uh

Yeah so i i can't tell you about modern changing right because yeah it was a long time ago but yeah i believe for the problems in the space are pretty much the same right yeah so what can we do is uh just

Well uh improving oracle's rights by improving uh well agreement protocols between oracle's rights and uh by also including a governance course right and uh so yeah yeah i'll also watch our incidents

Uh happening with oracle's right yeah so feedback to improve them yeah definitely so i guess the last place that i wanted to go is to talk about what like what's next right when

there's been a lot of there's been a lot of talk in general about how different blockchain protocols are moving forward right you have cardano that's going towards

Implementing smart contracts with this next gogan development epic and you've had you have a whole bunch of stuff going on in the space what's next for ergo it's in mainnet and you have oracle

Pools announced there's been talk about some zero knowledge and other privacy features built on top what's next um all right so well as i say it's uh oracle's uh

For all the defy applications right so then we are going to build some different applications right nice but that's why our

Uh so yeah stay tuned uh some announcements are coming about that and um yeah so uh about privacy presenting applications right on top of cargo so uh we already uh have uh two working on the minute so

Some real applications with uh ui uh pretty good ui to me so you can try them also so the first application is a non-interactive mixer right which is giving you better privacy than in

Bitcoin developers anonymous developers in this case the mixer right so it's based on a published paper uh so and yeah it's pretty simple and

Uh cheap and well pretty efficient and also non-interactive so uh surveillance uh channels right so your channel to the coordinator all right then you need to trust this coordinator and

Then yes some active attacks on the mixer also much simpler all right so in case of our mixer so it's not interactive so you're just working with the blockchain directly

Right and your mixing sets is well on the blockchain also it's uh potentially uh much larger than in case of coinjoin okay another application is called sdk treasury

Uh so this is a kind of join spending food right so for example three of us can send some funds right so on the blockchain our ring is visible right but we can set

Some spending condition uh like two or three out of three forum is needed right in order to spend the funds and then yeah so it's preserving privacy

So from observing the blockchain it's not possible to say those two gentlemen which actually signed right so uh it's uh preserving uh world privacy

For german spendings and uh yeah it can be a yeah and also we in ergo foundation also thinking to use it well to to pay out grants uh for example rights

Preserving privacy uh actually a grant right so to avoid some so yeah i think uh well more applications will come in future uh like uh maybe

Some private episode auctions right so uh watching procedures kind of there also i'd find right uh so yeah but so there are two applications so you can play already

So yeah exciting stuff i'll link that stuff below for folks yeah i was clicking around and playing around with it and i'll share that with folks that are watching so if you want to try it out you can do so

Um but really really cool stuff and and i'll be i'll be following closely uh looking out for those those announcements um i know you said there's a couple things coming so i'll

I'll keep my eyes peeled for that stuff and i and i obviously want to thank you guys for joining and you know being mindful of folks time i i also am very excited by the fact that more people can start to

Learn about what ergo has to offer and we should definitely do this again as as things develop and and get get the word out about more of the stuff that ergo's working on oh thanks a lot i will be absolutely

Happy to join the game awesome and uh and robert also really quickly uh for folks that are interested in emergo where can they find information about emergo

Sure and just uh make sure everyone's clear emergo is the company that you know created uh cardano and is now also working in the ergo ecosystem and ergo is the blockchain very close name nomenclature you know

Yeah and so um if anyone's interested in ergo the blockchain feel free to go to ergoplatform.org you can check out ergo on twitter google youtube you can find it

Everywhere telegram ergo form et cetera or ergo the company that's uh doing development on blockchains like cardano and ergo uh you can check us out uh same thing pretty much a mergo

Everywhere uh so twitter youtube if you check on youtube we have also a lot of youtube videos going in depth on updates in your roy also updates

About our latest research called the murder research which talks about all the latest in utxo smart contracts and so if you're interested in any of that please go search for embergo and

You can find all our social media or go to our website and you'll find it perfect perfect so thank you thank you both for joining obviously this was this was a long time come and i've been excited for this call

And i'm i'm learning a lot still about ergo and and really exciting stuff and really exciting times to be in this space so thank you gentlemen thank you absolutely have a great one everybody bye

Cheers

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