This piece was written in partnership with several other collaborators in the nascent Penumbra ecosystem. While it is expressed from my perspective, I aim for it to be a subject of conversation more than I aim for it to be a mandate. For this reason, I have posted it here in this forum so that others can continue to respond and develop this vision into reality. Many thanks to H, C, J, and my entire team at Radiant Commons for the initial direction and inspiration that turned this into writing.
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A Vision for Penumbra
What makes humans civilization unique is its ability to build on the achievements of our predecessors. The original vision of cryptocurrency was to create unstoppable private money. The principles in place have been expressed from the start: economic expression must be uncensorable, and this expression must be at the will of selectively revealing oneself and one’s interactions with others. If privacy is the freedom to selectively reveal oneself to the world, then freedom is the ability not only to increase one’s degrees of possibility, but as well to decrease the potential for dominance. Without this definition for freedom, any economic regime is not free, and is not unstoppable.
ZCash was the first expression desiring to meet this need. What I contend is that Penumbra is an expression not only of this initial technological desire, but meets the needs of users that have been discovered over the course of the last 16 years of development in digital currency technology. More than mere unstoppable private money, a constantly iterative system of capital flows that exist within crypto and that must set the ground for a global financial system requires a compatibility and readiness for an unexpected potential in what cryptocurrency can become. Where other ZCash afforded an important first step toward unstoppable private money, Penumbra now affords the creation of an unstoppable private economy.
The Next Step for Private Economy
I contend that the last year has only been the starting point for Penumbra. What follows describes what it becomes, now that it’s realized: a proposal for how Penumbra can move crypto from unstoppable private money,using this as a foundation for enabling what crypto can become, starting where it always should have: the promise of crypto is meant to start with the user.
There are three principles to this technology:
- Money, its owners, and their transactions should be allowed to selectively reveal themselves to the world such that they have full authority over how this information is revealed.
- The ability for any user to engage in:
a. Digital speculation on the value of future discounted work; all those who hold money should be able to speculate on the future of an asset as a store of value, specifically* as an asset that speculates on the future value of work done by the systems those assets represent.*
b. Use of any currency on any technological basis: the privacy boundary should be compatible with any form of incoming currency with minimal friction in its
c. Compatibility across all willing or available digital economic regimes. - There should be no or as minimal possible a tradeoff between the domain of a user’s privacy and its interaction with public technology.
How this leads to a Glorious Future
With the launch of Penumbra in July of 2024, there was no other technology that afforded the breadth of this potential. If the initial requirements of an unstoppable private economy are to create the conditions for the kind of freedom a user deserves, then technology that allows this freedom can act as a foundation for the best place a user can start from as they move across a free and public economy.
Crucially, I encourage everything that does not interact directly with the user to remain public. Just as it is fundamental that any individual user retain their privacy, I believe it is important that systems and the economic flows within them at scale should remain public. Penumbra does not stand in the way of this truth - all connected technologies can retain their transparency, allowing everything from growth metrics to understanding capital flows within and throughout all interacting economic regimes.
Penumbra as an account layer for Crypto
The future of Penumbra is to build on what the protocol offers and to increase its suite of offerings, with particular emphasis on improving the account-level user experience of using one’s own assets. Penumbra should continue to serve the initial requirements of a private digital economy by acting as the interaction surface between users and the ever expanding economy of crypto.
What this means is that Penumbra should focus relentlessly on becoming this user experience layer, so that users gain this autonomy without associating it with a user-experience trade-off. All chains benefit from this intention, because users will be able to reveal their preferences without revealing their identities. Further, it also places the facilitation of any further steps outside of Penumbra close at hand for a user - a DEX that possesses the same foundational privacy means that a user will always have what they need when they prepare to interact with anything else outside of Penumbra.
My contention is that because Penumbra is launched, the importance of the chain is not only to grow the local set of shielded assets and the anonymity set that they support, but also to dramatically increase the utility of these shielded assets on behalf of Penumbra’s users to other chains by enabling the experience of interacting across networks. My contention is that while gaining mindshare in this category, I would hope to see Penumbra simply become a default part of any user’s experience. My contention is that, eventually, Penumbra is invisible except for this exceptional experience. Finally, my contention is that, if we do it right, all of this makes Penumbra inevitable.
There is a long way to go in achieving this, obviously - but it is an exciting mission, because the part that enables everything else has already been done. The anonymity set will continue to grow, and with this growth so will the utility of this anonymity set to its end users.
Penumbra is the Foundation of a Private Economy
Penumbra was built to meet the requirements of crypto steadily discovered through the work of countless other protocols and what their success and failure has taught as an industry. Now that it exists, we can turn to solving what it looks like for a user to interact with everything that these protocols have built. With this, the vision for Penumbra is that privacy should be maximally useful to users, and because of this that Penumbra enables the future we have been waiting for from this technology since the beginning.