DCRM Alliance Forms and Advances Decentralized Custodian and Interoperability with Pilot
BTC, ETH, and FSN Sent To/From Decentralized Custodian Account managed by 5 firms.
At the end of 2019, simultaneously as Fusion announced the release and consequent open-sourcing of DCRM 5.0, the DCRM Alliance was announced: a group of DeFi players and protocols, Fintech companies, enterprises, government and academia that will join forces to further accelerate the development of next generation decentralized finance and custody solutions using DCRM.
Decentralized custody is not only paramount for cross-chain DeFi but also for the security of any centralized entity’s digital assets. According to Cointelegraph, the number of centralized exchanges being hacked is escalating every year. In 2019, 11 large scale thefts were carried out against centralized exchanges which resulted in over $292M being lost. With growing institutional involvement in blockchain and digital assets, the demand for solutions like multi-party signing and MPC (multi-party computation) to provide secure usage of digital assets will only increase.
Further validating the focus of the Alliance, Brave New Coin predicted the top solution in 2020 to solve the crypto’s challenges would be MPC Custody (or decentralized custodian). The article also mentions successful startups like Fireblocks, who raised $16M in July, 2019 and is currently moving $2.5 Billion monthly on behalf of their institutional clients, illustrating the need for DCRM and decentralized custody.
The DCRM Alliance Members
Fusion is proud to introduce the first four pioneers of decentralized finance to join the DCRM Alliance and take an active part in developing the cutting edge applications needed to further adoption of blockchain and digital assets.
Fantom offers a series of technology components, enabling fast and scalable distributed ledgers, with a focus on their Lachesis aBFT consensus module. Fantom represents the voice of public protocols in our Alliance.
‘’When it comes to interoperability and decentralized custodianship, DCRM is one of many approaches to solve a problem that I’ve been seeing since entering this space. The lack of an elegant way for us to communicate or interact across different platforms makes cross-chain decentralized finance (DeFi) nearly impossible, which has resulted in most value capture occurring on Ethereum. That value capture needs to be accessible to all, and we think that DCRM may be able to have a hand in that.”
Michael Chen, CMO of Fantom
Karlsruhe Institute of Technology
At the Karlsruhe Institute of Technology (KIT), Prof. Dr. Ali Sunyaev (director of the Institute of Applied Informatics and Formal Description Methods and head of the Critical Information Infrastructures research group) and his team investigate, among many other insightful research into future technology, the proper deployment, measurement and comparison of cross-chain technology. Ali Sunyaev and the CII research group at the KIT represent the voice of academia in our Alliance.
“Existing technical limitations of distributed ledgers still limit their applicability, which is why a large number of different distributed ledgers have been developed in recent years. The ability of these technologies to work together, for example, through the distributed management of control rights, will help to overcome the current limitations and realize the many advantages of distributed ledgers in the future.”
Prof. Dr. Ali Sunyaev, Director of the AIFB, KIT
Realio is aiming to disrupt the way capital is raised and invested today by building a complete ecosystem aimed at the issuance, management and trading of digital assets. Realio represents the voice of asset tokenizers/issuers in our Alliance.
“Fusion’s solution to decentralized custody will reshape many of the ways in which we transact digitally and completely redefine the various roles in the current securities value chain. Decentralized key management is likely to play an important role in our tech stack going forward.”
Derek Boirun, Co-Founder of Realio
Totle delivers access to a DeFi infrastructure, ranging from token trading and liquidity, to facilitating payment requests. Totle represents the voice of DEXes and value exchange in our Alliance.
“The biggest problem with decentralized finance (DeFi) is that it’s restricted to only Ethereum based assets. We joined the DCRM alliance because we believe there’s an opportunity to open the DeFi ecosystem up to the broader cryptocurrency space with DCRMs cross-chain solution.”
Andrew Trudel, Totle
Current Progress made by the DCRM Alliance
The Alliance has been busy building the sandbox environment for DCRM’s decentralized custody solution, key points of progress include:
- Created a network of DCRM nodes in a fully functional test network.
- Using a simple UI designed by SMPC wallet team, Alliance members successfully conducted several transactions to generate accounts and send ETH, BTC, and FSN in distributed fashion.
This progress marks the beginning of a new era in finance where different organizations and industry players (technology, DEX, academia, issuance platform) collaborate to create accounts and transfer incompatible tokens. No single organization in this group can act without the approval or knowledge of the other, perfectly showcasing the security and transparency possibilities of blockchain.
What is next for the DCRM Alliance?
The initial phase of testing will continue to enhance performance, security and stability of the signing group. Important security questions that have been answered in theory but need to be confirmed in practice include:
- What happens if one node is down?
- Can any individual node be hacked and reconstruct full key? (of course not).
- Can any malicious player steal the keys from the other alliance members?
After these questions have been answered and solutions implemented, the Alliance members will review the test results and jointly plan the next phase in optimizing DCRM for commercial-grade applications. We look forward to sharing the results of our progress and adding more members to our pilot.
Fusion Foundation is a non-profit organization building the next generation infrastructure for decentralized global finance. By providing innovative companies and developers with the open source technology they need to build peer-to-peer time and value-based applications, the world will enjoy financial transactions that are more accessible, efficient and transparent than previously possible. Fusion’s seasoned team of industry veterans led by Founder and CEO DJ Qian, a blockchain pioneer who previously launched two top 20 global blockchain projects (VeChain and QTUM), is working to collaborate with financial institutions, cryptocurrency companies, businesses, peer-to-peer lenders, third-party app developers, academia and the broader blockchain community. By providing the foundation that enables different cryptocurrency tokens, digital assets, off-chain values and data-sources to be created and exchanged between the Fusion blockchain, other blockchains and financial systems, Fusion is moving ever closer to a globally accessible system for the free exchange of values. Visit https://www.fusion.org to learn more about Fusion and its partnership program.
Fantom is a consensus-as-a-service (CaaS) platform delivering high transaction throughput and near-instant finality to the next generation of distributed ledgers — traits that are especially crucial for DeFi applications.
The team behind Fantom has created a consensus mechanism which is asynchronous and byzantine fault-tolerant (aBFT) by design, meaning it can function in adverse and loosely connected networks. This consensus algorithm, Lachesis, is compatible with both Cosmos SDK and the EVM, allowing builders to deploy their own blockchain platforms or applications with ease. Visit www.fantom.foundation.
About Karlsruhe Institute of Technology
The Karlsruhe Institute of Technology (KIT) is one of the largest research and educational institutions in Germany, focused on delivering significant contributions on a global scale. At the KIT, Prof. Dr. Ali Sunyaev is director of the Institute of Applied Informatics and Formal Description Methods (AIFB) and head of the Critical Information Infrastructures (cii) research group. The research interests are trustworthy Internet technologies as well as complex health IT applications. By using theory-driven design, development methods, computational tools, and empirical research, research of the cii group takes a new and interesting perspective to generate insights into the complex process of future Internet-based systems and their operation in real-world settings. Research of the cii group accounts for the multifaceted use contexts of digital technologies with research on human behavior affecting Internet-based systems and vice versa. In this area, Ali Sunyaev and his group members devote themself to the advancement of theory and applications. For example, his team is investigating, privacy behavior of users interacting with distributed ledger technology (DLT) applications, the development of a configuration tool for distributed ledgers for DLT applications, and the development of a comparison tool for cross-chain protocols. Visit www.kit.edu.
Kannengießer, N., Lins, S., Dehling, T., & Sunyaev, A. (forthcoming). Trade-Offs between Distributed Ledger Technology Characteristics. ACM Computing Surveys. https://arxiv.org/abs/1906.00861
Kannengießer N, Pfister M, Greulich M, Lins S, Sunyaev A (to be published) Bridges Between Island: Cross-Chain Technology in Distributed Ledger Technology. Proceedings of the 53rd Hawaii International Conference on System Sciences (HICSS 2020). (Wailea, Maui, Hawaii, U.S.A.).
The Realio platform is an end-to-end, blockchain-based SaaS platform for the issuance, investment and life-cycle management of digital assets. Realio combines access to a 100% on-chain decentralized (p2p) exchange with the features of a sophisticated issuance/investment platform in order to merge enterprise-grade blockchain solutions with institutional quality investment vehicles. We are changing the way private investments are made, managed and traded. Visit www.realio.fund.
Totle is the most reliable DeFi asset aggregator in the industry. We work with over twelve decentralized exchanges and synthetic token providers to access deep liquidity and the best pricing for ERC-20 tokens. On top of having the most competitive pricing and the widest selection of supported asset pairs, we strive to have the highest transaction success rate to offer customers a consistent and smooth experience. Totle can be accessed through a simple swap dashboard at swap.totle.com or integrated directly into your product with the Totle Widget or API. Visit www.totle.com.