Distributed ledgers (e.g. blockchains) enable financial institutions to efficiently reconcile cross-organization transactions. For example, banks might use a distributed ledger as a settlement log for digital assets. Unfortunately, these ledgers are either entirely public to all participants, revealing sensitive strategy and trading information, or are private but do not support third-party auditing without revealing the contents of transactions to the auditor. Auditing and financial oversight are critical to proving institutions are complying with regulation. This paper presents zkLedger, the first system to protect ledger participants’ privacy and provide fast, provably correct auditing. Learn more and read the paper.
b_verify for warehouse receipts
b_verify is an experimental protocol for verifiable records. Its purpose is to provide an improved technical foundation for the issuance, verification, and transaction of certain financial instruments and tradable securities, such as warehouse receipts in agricultural supply chains. Applications servicing the b_verify protocol can be customized for different use cases and contexts. Contact graduate researchers Mark Weber and Henry Aspegren to learn more. This project receives funding from the Inter-American Development Bank.
Valuing Cryptoassets with Fidelity
A collaboration with DCI member company Fidelity Labs, the purpose of this working group is to develop a fundamental research model for valuing bitcoins and other cryptoassets and investigate if there are different valuation models to be applied for different types of crytpoassets (e.g., cryptocurrencies, cryptocommodities, app tokens etc.).
A key part of our vision for a decentralized financial system is the ability for people to transact familiar currencies using blockchain technology. These fiat currencies present a different challenge to existing digital currencies as there are already other versions of the currency in existence, both physical and digital. Robleh Ali and James Lovejoy lead this group in advancing the development of their prototype and their conversations with key stakeholders.
Blockchain Securitization of Solar Microgrids
Decentralized autonomous electric microgrids (DAEMs) pose opportunities beyond merely replacing existing fossil fuels with cleaner energy. These blockchain-and smart contract-governed systems could form the backbone of a distributed transactive grid system, where both wholesale and retail “prosumers” participate in a decentralized, locally distributed power market whose price signals drive automated transactions within a network that single institution controls. A DAEM might also generate new forms of automatically executable collateral to unlock hitherto unavailable financing for marginalized communities. DCI Senior Adviser Michael Casey leads this project.
Initial Coin Offerings with Fidelity Labs
2017 was the year of the ICO (Initial Coin Offerings). Are they mere scams or are they the future of venture finance? This groups collaborates with Fidelity Labs to develop a framework to assess and compare different token sale models (i.e. distribution mechanisms), map out past notable token sales against the framework, and compare different models to develop recommendations on best practices.
Smart contracts are an often touted feature of cryptographic currency systems such as Bitcoin, but they have yet to see widespread financial use. Two of the biggest hurdles to their implementation and adoption have been scalability of the smart contracts, and the difficulty in getting data external to the currency system into the smart contract. Privacy of the contract has been another issue to date. Discreet Log Contracts are a system which addresses the scalability and privacy concerns and seeks to minimize the trust required in the oracle which provides external data. DCI research scientist Tadge Dryja. Watch his video presentation on Discrete Log Contracts here.
Blockchain-Based Supply Chains with BCG
Supply chains will look fundamentally different in 10-15 years, making use of multiple advanced technologies (Blockchain technology, IoT, Advanced Analytics, Artificial Intelligence, etc.). This will cause a move away from single company supply chains to a flexible network of modules, forming ever changing supply networks. We’re partnering with DCI member company the Boston Consulting Group (BCG) to research how this change will materialize.