Fahmi on Midnight privacy and Dark pool
by Freddenver: Ethereum
The bit of Fahmi's argument that stays with me is the unseeing part. Once it's been seen, it can't be unseen, and that's the case against bolting privacy onto solutions headed for Ethereum and other chains after the fact. Leaks, metadata leaks, his words. His comparison is walking out of the house naked and getting dressed once you're already in public. Midnight went the other way and built it in from the start, so you leave fully clothed but the clothes are invisible, and when you step out nobody sees you. Only a disclosure of that invisibility lets people look, and that can be public or private with a peer or counterpart you want to trade against. He says that's where the value accretion comes from. Asked how many winners the privacy space gets, he expects natural attrition, same as in any business or sector, not just crypto. Lots of blockchains exist and some won't survive, and he says digital custodians already bring up onboarding costs because they're lumbered with so many chains to support. His call is a handful of winners with retail and full institutional adoption, and the same in privacy. The Dark pool explainer on screen is doing its own thing.
Transcript (en)
possible when you talk about other solutions coming to ethereum and other chains adding privacy after the event will still create leaks will create metadata leaks it's like walking out of a house naked and then getting dressed in public once you've seen it you can't unsee it um so we've built it so you leave not only fully clothed but with an invisibility cloak within midnight so when you step out people don't see it and it's only if you reveal that invisibility through a disclosure that people get to see. And you can make that a public disclosure or a private disclosure with a peer or a counterpart that you want to trade with. So that's where we think the value accretion comes from. And so just upon that, how many winners do you think there's going to be in the privacy space? Is there going to be a winner for the L1? Is there going to be a winner for the store of value? Is there going to be a winner for perpetuals? Is it going to, I mean, you just mentioned that. I don't think all these things can exist in one place. Yeah, I think you'll see a natural attrition. You'll see that. It's natural in any business, any sector, not just crypto. There are so many blockchains out there. At some point, many of them won't survive. Um, you, I, I see that happening already when I have conversations with digital custodians, they always talk about the cost of onboarding because they're now lumbered with so many chains that they have to continue to support. So I think there'll be a handful of winners, both in the blockchain space, which get not only retail adoption, but full institutional adoption, but equally in the privacy.
