Charlie Mack

Another month, another update. TLDR: We are gearing up to raise a seed round of funding to build out Fizk. Long version: We have written the whitepaper/specification for the new zk-based rollup architecture: github.com/zkUSD-Protocol… We have also been working hard on our core proof system for the rollup, you can follow along: github.com/zkUSD-Protocol… We are now working on our overall pitch and are currently seeking some early feedback from friendly Angel investors. So if you are one, or know any, please get in touch. We would love to kick our ideas around with you. We truly are super excited about the prospect of building out Fizk and what it can represent as revolutionary tech stack that doesn't sacrifice privacy while maintaining audibility to deter criminal activity rather than attract it. Privacy is a fundamental feature of digital finance and its about time we have a confidential stablecoin.

Really gutted to have missed ZKHack Berlin - This was my hackathon project for ETH Berlin last year: projects.ethberlin.org/teams/1002. It was a zk whistleblower platform based on zkEmail. I'm currently building @fizk_protocol, a confidential zk based stablecoin protocol. Would love to chat with you more about it! Please reach out :)

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@hosseeb They are not only deterring developers of privacy tech but are also cutting off their resources. We are building @fizk_protocol - a confidential but auditable stablecoin protocol trying to tackle the exact privacy v compliance gap you describe here. Respect your conviction.

Dragonfly invested into PepperSec, Inc., the developers of Tornado Cash, in August of 2020. We made this investment because we believe in the importance of open-source privacy-preserving technology. Prior to our investment, we obtained an outside legal opinion that confirmed that Tornado Cash as built complied with the law, under the guidance given by FinCEN in 2019. The government has now stated in open court that they are contemplating charges against Dragonfly for having invested into the Tornado Cash team in 2020. On counsel’s advice, we have refrained from public comment. But we can no longer remain silent. We believe deeply in Americans’ right to privacy, and the lack of it remains one of crypto’s largest unsolved problems. We therefore stand by our investment. We did not operate or exercise any control over Tornado Cash, we had no contact with any malicious users, we always encouraged our portfolio companies to follow the law, and we maintain that Tornado Cash itself has a lawful right to exist—a view reinforced by Van Loon v. Department of the Treasury and OFAC’s subsequent rescission of sanctions. Charging a venture firm for a portfolio company’s alleged misconduct would be unprecedented, especially under these circumstances. In 2023 we received a DOJ subpoena and have fully cooperated with the government’s investigation of Tornado Cash, confident that we have always complied with the law. The DOJ has made clear that we are not ourselves a target of their investigation. As with every investment, we provided PepperSec the same advice and support we offer all portfolio companies. We believe the government’s statement in court today was primarily to undermine a defense of Tornado Cash—to make it more difficult for the defense to call Tom to testify on the stand. After all of this time—years later—bringing charges against Dragonfly would be outrageous, contrary to the facts and the law, and would induce a chilling effect onto all investment into crypto and privacy-preserving technologies in America. We don’t believe the DOJ would actually bring such absurd and groundless charges. But if they do, we intend to vigorously defend ourselves.

We’ve just completed implementation of a novel self-governing DAO architecture for the Fizk Protocol. This system supports holistic protocol governance, from adjusting risk parameters to upgrading the verification keys of smart contracts. It represents an important step toward progressive decentralisation and is a key milestone as we move closer to mainnet deployment. This design enables off-chain, proof based governance of a decentralised protocol, preserving transparency while ensuring efficient execution. With that being said, we are now actively exploring new architectural directions. One of our original working assumptions when building out Fizk was the availability of a DEX on Mina and a bridging mechanism to extend zkUSD beyond Layer 1. As a result, the protocol has been built as a self-contained system. But this assumption may no longer hold, so we’re evaluating alternatives. Specifically, we’re investigating whether zkUSD could be implemented as its own zkRollup. The goals of this architecture are twofold: - First, to explore whether we can use a high-performance shared execution environment, such as Sui or Solana, as the sequencer for the rollup, benefiting from their speed while retaining the security and decentralisation guarantees of Mina by settling state to L1. - Second, can we design a confidential yet compliant stablecoin, shielding user balances and transactions while maintaining adherence to international financial regulations. If we are successful we could enable a stablecoin that is both decentralised and privacy-preserving, while remaining operable within the evolving regulatory landscape. Which would be very exciting indeed!

We have just released a CLI tool for interacting with the Fizk protocol from the terminal. Its fully decentralised: 1) Client side proving for oracle price and tx proofs 2) Vault state built from contract events Check it out: @zkusd/cli" target="_blank" rel="nofollow noopener">npmjs.com/package/@zkusd…

Hey everyone 👋 It’s been a while since my last update. Since the high intensity development period up to mid march, things have relatively slowed in terms of tangible deliverables. - We have made some great progress on proof based governance that will begin life as an effective council based multisig for managing the protocol risk parameters and upgradability with the aim to transition to governance token voting for Mina’s first DAO as the protocol evolves. There is still a lot of exploratory work to do but our initial results are really promising. - We have written an early version of the whitepaper as we position ourselves to look for sources of funding for the next stage of the protocol’s lifecycle, you can check it out on our website! - I think at the very least we are probably going to have to wait for native multisig capabilities on Mina before we can effectively deploy on mainnet so we can categorically avoid regulatory oversight as a custodial protocol. Rest assured there’s ton of stuff that we are getting on with as we figure out how to continue to the next leg of the journey, all of which is required before we will confidently deploy on mainnet. I’ll keep you guys updated on any major developments, with sporadic check-ins like this one splashed in among them.

We just hooked up our first oracles on devnet! We are now getting real prices. Check it out. devnet.fizk.xyz/app/connect If anyone is interested in running an oracle on devnet then please reach out.

We've just created our official protocol X account. I'll keep providing informal updates on this account but for more official communication, follow @fizk_protocol.

For the past couple of weeks we have been focused on: - Extending our financial risk model to simulate protocol recovery mechanisms in the event of black swans - Writing the Whitepaper - Building out the landing page of website - Improving the CI/CD for our infra / setting up Mina Node on devnet Moving forward we need to deeply understand the regulatory implications of launching a stablecoin. This will directly influence our launch strategy as we ascertain what jurisdictions and what state the protocol development has to be in (i.e. how decentralised) prior to any mainnet deployment Our end goal has always been for Fizk to be a fully decentralised protocol, serving as a public good for the Mina community. However reaching that is going to be extremely challenging and there's a lot of work ahead traversing the path of progressive decentralisation. Mina's unique chain architecture means we have to design the system from the ground up with no precedent to draw upon. We have started to investigate what a potential DAO like structure would look like for Fizk. We feel privileged to be able to work on such an pivotal project in such a great community!

🚀 Fizk - zkUSD Devnet is Live! 🚀 🔗 in profile. This is an early version so expect bugs 🐞 - but we would love you to try it out! 📢 Report issues & feedback in our TG (linked in profile). 💰 Need devnet tokens? DM me! Your feedback will be super helpful. #MINA

Developing on L1 Mina can be a challenge. Especially managing state for zkApps. I've written a blog post that might help some people trying the navigate the trickiness: mackcee.substack.com/p/overcoming-m…

One really interesting area of our integration tests has been building out a financial risk model in python that maps a number of different scenarios across a matrix of different risk parameters. The goal is to see how the protocol performs and recovers under extreme price drop events based on Mina's L1 throughput limitations. I was surprised to find out that it holds up reasonably well.

No big sexy update. Our main focus is on integration testing and building out the frontend. The frontend is almost done and most of the abstractions and structure for managing parallel transaction lifecycles on Mina is complete, paving the way for an extensive test suite. I'll give you guys a sneak peak of the frontend when it's done. I'm pretty happy with it.

Another big refactor this week to tackle Mina network hardfork verification key obsolescence - what a mouthful. We had been deploying vault contracts to the token accounts of our users, but this means that in the event of a network upgrade that bricks the verification keys, we would be relying on users to upgrade to the new version which is no bueno. If a user didn't upgrade and their vault became undercollateralised it couldn't be liquidated which breaks the system. We fixed this by moving all logic to our main engine contract but still managing the state on our users token accounts, without deploying a contract there. As these token accounts are managed by our engine as the token owner we can block all interaction with them outside of the engine contract. It's a pretty cool solution. You can check it out here: github.com/zkUSD-Protocol… and here: github.com/zkUSD-Protocol…

Last week was spent on the redesign of our oracle price feed. With our previous design the zkUSD protocol would account for just under half of the current network capacity for zkApp transactions. Which would be insane. We are now aggregating oracle prices off chain and creating a zkProof that users will submit along with their transactions. The list of protocol oracles will still be managed on-chain. I'm much happier with this design and it feels good to embrace Mina's zk recursion.

I'm going to start documenting the progress / providing updates on the development of zkUSD, an algorithmic stablecoin native to the Mina blockchain. The protocol is being developed here: github.com/orgs/zkUSD-Pro… Thanks for the suggestion sMgT!

@zkWilly X @seashepherd Charity NFT - Beluga 🤍 The first of the whales in our line-up - starting off small 😎 If you have <3 ETH in your wallet at the time of mint, you are a Beluga Whale 🌊 @zkSync #zkSync #zkSyncEra #beluga #Charity #belugawhale #reveal #launch #Eth #smartcontracts

@zkWilly X @seashepherd Charity NFT - Dolphin 🐬 One week until mint, and we are getting bigger! If you have <1 ETH in your wallet at the time of mint, you are a Dolphin 🌊 #zkSync #zkSyncEra #dolphin #Charity #porpoise #reveal #launch #Ethereum #smartcontract #erc721

@zkwilly X @seashepherd Charity NFT - Shrimp 🦐 Are these updates overKrill? 🥁 If you have < 0.2 ETH in your wallet at mint, you are a Shrimp 🌊 @zksync #zkSync #zkSyncEra #NFTCommunity #shrimp #Charity #mint #rustacean #reveal

Tomorrow will mark the 10-day countdown to the @zkwilly X @seashepherd NFT mint 🕓 Each day, we will reveal a new creature that you can mint depending on your zkSync Era ETH balance! 🐟 -> 🐳 🪙 @zksync #zksync #zksyncera #seashepherd #erc721 #smartcontract #mint