LetsExchange / LetsExchange Blog / AMA Session with LetsExchange and the Firo Team

AMA Session with LetsExchange and the Firo Team

Dec 15, 2023 16 min read

LetsExchange, an instant crypto exchange service supporting 4,000+ coins, and the Firo (FIRO) team, a privacy-preserving cryptocurrency and ecosystem, held a joint AMA (Ask Me Anything) session on December 7, 2023, on X (formerly known as Twitter). Both teams had the opportunity to ask each other interesting questions. The LetsExchange and Firo communities also asked questions that allowed everyone to know these companies better. If you missed it, below, we recapitulate this exciting AMA session.

Question from FIRO: How did LetsExchange started and came to be?

Answer: LetsExchange was launched in 2021 by a team of experts in blockchain and crypto. In just a year, the platform has become one of the top 5 services that provide instant crypto swaps. Now, LetsExchange is ahead of most competitors in many parameters, including presence in the key markets, number of supported assets, etc.

Question from FIRO: Where is LetsExchange based?

Answer: LetsExchange is registered in Seychelles. But being real crypto enthusiasts, our team is spread worldwide. Our team members work from the USA, the UK, Ukraine, Mexico, and other countries.

Question from FIRO: What makes LetsExchange different from the other similar services out in the market?

Answer: Our main advantage is the number of supported coins and tokens (over 4,000) and an extensive range of tools for our partners. A widget with Swap and DEX modes and an off-ramp and on-ramp functionality, affiliate links, and a customized Telegram bot are just some of the solutions that we offer. We are constantly implementing new features and functionalities to ensure that our users and partners can benefit from the latest trends in the market.

Question from LetsExchange: How did you come to the idea of FIRO? There are already projects implementing different technologies to ensure user privacy, so why did you decide that the crypto world needs one more project to focus on this matter?

Answer: While I am listed as a co-founder, the idea of Firo or rather Zcoin as it was then named was already crystallised by Poramin Insom who was working on his masters at John Hopkins University under Matthew Green and the Zerocoin paper back then was brand new. It was a totally new approach to privacy that didn’t involve mixing or hiding among a small ring signature and was the first generation of ZKP based type of privacy.

As the project progressed, better privacy protocols replaced Zerocoin and the Firo team has been at the forefront of developing these privacy protocols. While there are many privacy coins, there are only a handful that develop privacy protocols. In the market, there’s RingCT, Sapling and Orchard, Mimblewimble and Lelantus and most projects use one of these.

These privacy protocols have different trade-offs, for e.g. some have what we call a ‘trusted setup’, some are lightweight but sacrifice some privacy, some are so complex or are behind restrictive licensing, while others have limited anonymity sets. Our work tries to balance usability, performance, simplicity and of course privacy and I think we’ve done a pretty good job to the point that our work has influenced other privacy protocols such as Lelantus-MW in Beam and Monero’s upcoming Seraphis protocol.

Also, when it comes to applied cryptography, there is huge value in not having a design monoculture. So if there’s an issue in one, it doesn’t apply to the others as well. Even in the history of privacy protocols, weaknesses have been found, such as in Zcash’s Sprout ceremony and also Zerocoin, so there’s value in developing uniquely different protocols.

This concept also applies in other cryptographic implementations such as when NIST opened the SHA-3 Cryptographic Hash Algorithm Competition, they specifically wanted designs that were different from SHA-2.

Question from FIRO: Can you explain how LetsExchange can enhance Firo's accessibility to a wider user base?

Answer: With LetsExchange, users can exchange FIRO for any of the 4,000+ coins and tokens supported by our platform. For example, users who have received rare coins in airdrops, or as a result of their affiliate activities, or bought them, can swap them to FIRO with no issues. Users who believe that the future of cryptocurrency is in privacy-focused coins can exchange their crypto holdings to FIRO.

Our business tools help provide access to FIRO to thousands of users worldwide. For example, our API will make the asset available in many crypto wallets.

Additionally, the project can count on our extensive marketing support, such as reviews, AMA sessions (like the one we are having, and in the voice format), and cross-promo activities such as joint quests, among others. We believe all these things can benefit the project and the FIRO community and will serve new users by helping them explore the project’s benefits and perspectives.

Question from LetsExchange: ZCash has already developed a way to ensure user privacy when transacting crypto. Can you highlight some features that the FIRO’s Lelantus Spark technology delivers compared to ZCash? Why is Lelantus Spark better, and can these two technologies be compared at all?

Answer: In terms of functionality, Lelantus Spark delivers similar features as Zcash’s privacy protocol such as high anonymity senders, hidden amounts, sender and receiver and also view key support. However, the way we achieve it and its inner workings are completely different which has various benefits.

First, unlike Zcash’s earlier Sapling privacy protocol, which is still widely used in many privacy projects such as Piratechain, Railgun and Tornado Cash, Lelantus and Lelantus Spark do not require a trusted setup. The ‘trusted setup’ issue is where you need to ensure certain initial parameters are destroyed so that there’s no backdoor in it. While a lot of work has been done to ensure that these parameters can be destroyed, issues have occurred most famously in Zcash’s earlier implementation called Sprout. Ideally, you don’t want a trusted setup in a system that’s supposed to be trustless.

Zcash itself has moved away from requiring trusted setup with its move to Orchard which uses Halo2, which is a very impressive and cool design.

The ZKP schemes that Zcash uses requires a generalized and optimized proving system. And then you need to create circuits built on that proving system for functionality. This typically requires a lot of hand tuning and very careful circuit design which increases complexity and requires highly specialized people to do it, which can often lead to heavy reliance on a particular team with in-depth knowledge. In circuit-based systems, not only the cryptography is important but the implementation details are too.

This is emphasized even further when while Halo2 is openly licensed, the specific Orchard implementation is under a more controversial BOSL license. This BOSL license was designed to specifically prevent people from forking the Orchard source code and using it for free (https://forum.zcashcommunity.com/t/bosl-or-mit-orchard/41439/125) further making the project even more reliant on the existing teams working for Zcash and is arguably against the spirit of free open source software which underpins one of the key fundamentals of cryptocurrency.

Spark on the other hand achieves similar feature sets with a simpler structure. Instead of generalized proving systems that carry everything, we use specialized ZKPs to prove specific things. For example, Spark use bulletproofs+ for range proofs and use one-out-of-many proofs for membership. This also makes the system more modular which has two benefits: one, it makes it easier to analyse for security since the components can be analyzed individually and secondly, it allows for upgrades.

We’ve already figured out an upgrade to Spark through the use of curve trees to replace one-out-of-many proofs which would greatly increase the performance and anonymity set of Spark.

Question from FIRO: What measures does LetsExchange have in place to ensure privacy and security for Firo users during transactions?

Answer: Privacy and user security are our main priorities. The platform allows users to swap funds without account registration (even though this option is available and offers more benefits, including access to the affiliate program). Thus, all your swaps are absolutely private.

Non-custodial security is another feature that allows us to ensure the security of users’ funds during each swap. We don’t store users’ funds but instantly swap one cryptocurrency to another. If a user keeps his funds in a non-custodial wallet, they are totally safe.

Question from LetsExchange: When the project moves to Lelantus Spark, will users have an opportunity to choose whether they want a completely private transaction or some details (e.g., sender’s wallet address) to be disclosed? If the latter option is not available, don’t you think it will impact the users’ willingness to use FIRO?

Answer: While our wallets will make using Lelantus Spark the default, users will still be able to make ‘transparent’ transactions. This is to preserve compatibility with various integrations and also as a stop gap measure to retain access to CEXes while we build out the Spark ecosystem.

Even within the Spark ecosystem and even when we move to 100% Spark, users are still able to disclose selectively their transaction history through the use of view keys. Spark supports both incoming and outgoing view keys. This has various benefits such as the ability to create ‘watch-only’ wallets, for charities to disclose or to allow for accounting.

Remember we’re not against disclosure. Privacy is the right to choose to disclose what you want as opposed to making it available to everybody which is what transparent chains do.

Question from FIRO: Will LetsExchange support Lelantus Spark transactions if one were to buy/sell FIRO?

Answer: LetsExchange is one of the leading exchanges in supported coins, and we are working constantly to improve our services. We believe that anonymity and privacy are two of the core elements of the crypto world. This is why account registration is not mandatory, and even if our users decide to open an account, they can do it only with a valid email address.

We are currently working on letting our users swap $ZEC anonymously by using z-addresses. Soon, the feature will be implemented, and our users will be able to benefit from it.

In the future, we will also consider implementing the support of #LelantusSpark.  We believe this innovative technology can move the use of crypto to a qualitatively new level.

Question from LetsExchange: What do you think about crypto regulation? Regulators all around the world are becoming increasingly interested in crypto. Do you think it can threaten the development of privacy-focused projects?

Answer: I come from a legal background but I think there’s a balance to be played by regulations. No regulation or self regulation in a market where there’s a huge disparity between the knowledge of investors and the people launching projects can lead to disasters. But also, regulation doesn’t solve all problems and overly restrictive regulations can stifle creativity or destroy entire industries to fit a narrative. For example, I’m sure if Satoshi asked regulators if he could create Bitcoin, Bitcoin wouldn’t have been created.

What worries me recently, is the increasing trend to paint ‘privacy’ especially ‘financial privacy’ as a thing that only criminals want. These people think that we should trust our financial institutions and the government to use our data responsibly and not abuse them but we have seen time and time again that our data often gets leaked or used against us to supress dissent.

Privacy is often the ‘bogeyman’ and blamed for things that are not caused by privacy. For example, in Japan when an exchange called Coincheck was hacked, no privacy coins were used to launder funds but somehow in response privacy coins were banned. Similarly with the FTX and LUNA blow-up, privacy coins had no role in it but MiCA regulations also targeted privacy coins.

So sure, I do think there are challenges ahead but at the moment they’re still navigable though it also means there should be an acceleration to develop non-custodial decentralized exchanges to protect the resiliency of Firo and other cryptocurrencies. The last thing we want is for cryptocurrencies to start becoming gated and custodied by licensed intermediaries just like the traditional financial system at which point, we should ask ourselves, why are we building cryptocurrencies in the first place?

It is unfortunate that some projects don’t see the challenges that privacy coins face as something that actually is a warning shot to cryptocurrencies in general and that we represent the frontline of this battle in maintaining cryptocurrency’s original values of being decentralized and permissionless.

Question from FIRO: With the recent MiCA regulations in the EU, how would you deal with Privacy Coins on your platform?

Answer: This question requires a comprehensive response. First and foremost, LetsExchange closely monitors legislative changes in various countries and regions, adapting its policies and operational activities when legislative adjustments are required.

We believe that legislative regulation will ultimately stimulate the industry's development rather than hinder it, as it will allow institutional investors to enter. This implies colossal industry capitalization growth, rapid technological advancements, and other benefits.

Simultaneously, we are confident that privacy is one of the key elements of the crypto ecosystem. Without it, cryptocurrency would lose its meaning. That's why, while complying with regulatory requirements, especially regarding AML policies and blocking transactions from sanctioned countries, we maintain support for anonymous cryptocurrencies and the option to exchange funds without registration.

Question from LetsExchange: What do you think about MiCA? Does it pose a danger for the further FIRO development and services offered on the territory of the EU?

Answer: We are already seeing the effects of MiCA which explicitly states that exchanges cannot allow the trading of assets that have ‘inbuilt’ privacy features unless its users can be identified. This has prompted several delistings already and Firo is currently unavailable to certain European countries on Binance.

However, we do have a strategy to deal with this through the introduction of EX-addresses which allow exchanges to remain compliant with MiCA with minimal loss of privacy for the end-user. You can read more about it here:

https://firo.org/2023/11/06/exchange-addresses.html

Question from LetsExchange: What do you think about KYC and AML? Are they indeed needed for cryptocurrency? And if yes, how can they be implemented in privacy coins? If not, how would avoiding using crypto in illegal activities be possible?

Answer: In principle, I strongly reject the need for KYC and AML for all situations, but I also accept it’s a reality for centralized entities that often can be targeted for regulation. So for where it touches fiat money or places where crypto-assets are regulated, I think KYC and AML are unavoidable.

The most common argument of requiring KYC and AML is that it prevents money laundering and criminal activity. However, studies indicate that it is largely ineffective at preventing this.

Ronald F. Pol of Australia’s La Trobe Law School has focused on the topic in the last few years. He assesses the impact of anti money laundering (AML) on crime is more like a twentieth of 1%. Or 99.95% of criminal proceeds get through.  United Nations statistics based on 2009 data put the figure at around 99.8%.

In a paper published in the Journal of Policy Design and Practice Pol writes: “anti-money laundering policy intervention has less than 0.1 percent impact on criminal finances, compliance costs exceed recovered criminal funds more than a hundred times over, and banks, taxpayers and ordinary citizens are penalized more than criminal enterprises.”

If it’s ineffective at preventing serious cases of money laundering, then what is the point of AML besides imposing costs?

Also besides the philosophical arguments against KYC and AML, these things impose a lot of friction to adoption of cryptocurrencies if everyone has to submit their identity data. In my opinion, this reminds me of the beginning of the creation of an Orwellian surveillance state especially as cash is slowly being phased out.

We have to think of cryptocurrencies as a public utility for money. We have the internet as a public utility for information which can be used for both good and bad and the same can be said for cryptocurrencies. There are still measures that can be taken to balance the AML risk while allowing privacy-preserving assets and I recommend everyone to read Perkins Coie’s paper on how privacy coins can exist in the existing regulatory framework: https://www.perkinscoie.com/en/news-insights/anti-money-laundering-regulation-of-privacy-enabling-cryptocurrencies.html

Question from LetsExchange: Do you believe that in the future, pseudo-anonymous coins can be eliminated naturally when the crypto ecosystem develops enough?

Answer: I think there will always be a place for pseudonymous coins as privacy always imposes some form of ‘cost’ in terms of performance or complexity. But if we’re talking about using it as a ‘currency’ I do think that for mainstream adoption to happen, privacy coins are essential as no one wants to use a currency that leaks information to everyone including your business competitors.

Question from FIRO: How does LetsExchange align with Firo's values and vision, particularly in terms of financial privacy and decentralization?

Answer: LetsExchange is a privacy-focused platform. It doesn’t ask for mandatory account registration. Users who opt to register an account with us need to provide only a valid email address, and that’s it. We don’t ask for personal or financial information other than the information needed for a swap. Soon, we will support z-addresses for swaps. In the future, the implementation of Lelantus Spark technology or another technology that enables private transactions is possible.

Question from LetsExchange: The PoW algorithm is considered inefficient and energy-consuming by many specialists. Will you move to another protocol at some point in the future?

Answer: The core team has no plans to move away from FiroPOW (which is based off ProgPOW). I think this is a misunderstanding as to the ‘inefficiencies’ of FiroPoW. The purpose of FiroPoW is to make GPUs the exclusive class of hardware that can mine on Firo. This means no ASICs, no FPGAs ensuring a fair playing ground in that everyone is using the same hardware and not a select group of people having an unfair advantage over another.

Why FiroPoW is seen as energy-consuming is because it is designed to make GPUs effectively the ASIC. This means you’re using all the capabilities of the GPU to the max. You’re tuning the algorithm to the hardware class you target. If parts of the GPU are idle or not as used when running the algorithm, it actually means that it is likely that you can develop an ASIC that further optimizes those portions. This is a similar principle to RandomX which targets CPUs instead. This approach has proven much more resilient and even Bitmain’s ‘RandomX’ ASIC turns out to be a bunch of CPUs cobbled together.

We have seen many other algorithms have FPGAs developed for it pretty quickly while FiroPoW’s algorithm actually morphs every block making it difficult to develop a bitstream for it and requiring the flexibility of a GPU.

With other algorithms, if you’re small, then the cost of developing an ASIC is too high for people to bother but often secret FPGAs will pop up. We developed FiroPOW to be resilient against these type of attacks regardless of our marketcap.

However one of the growing issues of GPU miners is the focus on USD returns which means many just mine whatever is the most profitable in USD terms without caring about the project itself. GPUs unlike ASICs can switch from project to project so there’s a lack of incentive for miners to remain ‘loyal’ or spend the time to be involved with the ecosystem which we have personally seen when the core team actively tried to involve miners in the governance process. This is a stark contrast to other projects with a hybrid consensus mechanism that tend to exclude miners entirely (such as Dash’s masternode voting or Decred’s model).

While we of course have some very loyal miners and supporters of the project, it isn’t like in the old days where miners played crucial roles in governance of the project and even channeled their profits back to benefit the coins they mined such as in the earlier days of Bitcoin.

Question from LetsExchange: FIRO is going to move to DAO governance in the future. Based on what voting rights in the DAO will be assigned?

Answer: This is a trend that we’re going towards to and have a developed cool privacy preserving voting protocol called Aura (https://eprint.iacr.org/2022/543) to enable this. However, I would caution that pure coin voting DAO governance often turns into governance theatre where a few big guys call the shots. After all, in the world, we don’t want people to run governments based on how rich we are, why should that be carried over into the crypto space? Also, we have seen time and time again that those in control often don’t vote for the long-term benefit of the project but in ways to enrich themselves.

While we have the tech, I think there needs to be better ways to derive voting rights rather than pure coin voting which is also expressed by Vitalik Buterin:

https://vitalik.ca/general/2021/08/16/voting3.html

This is still an open problem and is not so much a tech problem but a social and incentive problem. Sometimes a degree of informality helps and prevents capture such as what’s done in Monero’s governance where your contributions and standing in the community affect the weight of your opinion. While this seems a bit nebulous and can become a bit of a ‘closed garden’, I think it is preferable to having anyone and everyone vote just on the basis of coin holdings, who many not have a grasp of all the issues.

Question from LetsExchange: Does FIRO contribute to crypto mass adoption?

Answer: Firo sees privacy tech as a prerequisite for mass adoption and personally, I don’t think any one project can do it all since we all have different focuses, and that’s a good thing!

We’re specialists in what we do and we do our work well which in turn contributes to the crypto ecosystem at large such as our privacy tech research work has benefited other projects. We similarly adopt other technologies from other projects that would help scale Firo.

Question from FIRO: What benefits does LetsExchange offer to Firo's community of users?

Answer: LetsExchange will enable users to buy FIRO with 4,000 coins and tokens. In the future, more assets will be added. We offer round-the-clock customer support and are ready to reply to all questions or solve any issues. Additionally, FIRO users can create an account on the platform and benefit from our affiliate program.

Question from FIRO: What joint marketing activities are planned between LetsExchange and Firo, and how will they promote Firo's growth?

Answer: We offer a lot of joint marketing activities, with AMA sessions being just one of the possible options. Other popular marketing activities among our partners are reviews, quests, and interviews, among others. Also, we are open to any suggestions that will help our partnership with FIRO grow and mutually benefit both communities.

Question from Crypto User: In terms of innovation, what did you say Letsexchange would bring as a solution in the cryptosphere? And what guarantees do investors have about the SCAM project?

Answer: At the moment, the S.C.A.M. token doesn't comply with our listing criteria, and thus, LetsExchange cannot offer its users to buy the token. If the project proves to be valuable, we will gladly list it as soon as it meets our criteria.

Our team doesn't give any investment tips, either, moreover, we cannot provide any guarantees for investors when it comes to a token that is not run by us. Regarding innovation, we are aiming to create a safe hub for crypto users to sell and buy as many coin types as it is possible while keeping the users' funds safe and away from scam projects.

With it, we mean a comfortable user interface, tools that take care of the best rates and deep liquidity for each swap, a set of tools that can be used to generate an additional income source, and in the future, many more developments are planned.

Question from Crypto User: Smart contract vulnerabilities can pose significant risks to projects. What steps have been taken to audit and secure the smart contracts governing $FIRO, and how does the team plan to address potential future challenges?

Answer: We aren't a smart contract but a privacy L1.

Question from Crypto User: Security and anonymity are always prioritized by BlockChain projects in the development of project platforms and technologies. So, does @firoorg have any technological solutions or plans to enhance user trust in these issues?

Answer: On top of Lelantus Spark, which we just released (activating in January 2024), you can read about it here: [https://firo.org/2023/11/27/lelantus-spark-binaries-release.html], The integration of technologies such as Dandelion++ and LLMQ ChainLocks enhances the overall security of both Firo's blockchain and network. Dandelion++ helps obscure the originating IP of transactions, and LLMQ ChainLocks provide additional security against potential attacks. These measures collectively reflect Firo's commitment to maintaining high standards of security and anonymity.