The Depository Trust & Clearing Corporation (DTCC) recently revealed that they have created an early version of blockchain that has the capability of supporting a trading volume of $11 trillion of credit derivatives. This significant achievement is not only a massive boom to the clearinghouse itself, but also signifies one of the biggest attempts ever made to adapt the current financial infrastructure of blockchain technology.
The herculean undertaking was first announced in January, with the goal to upgrade the DTCC's current infrastructure. The firm intended to address the infrastructure pertaining to the centralized Trade Information Warehouse (TIW), specifically aimed at over-the-counter derivatives. In doing so, they hoped to be able to speed up transaction times, which before blockchain, often took weeks to clear.
To achieve this, DTCC launched a collaboration with IBM, the blockchain consortium R3, as well as the blockchain startup, Axoni. After completing the initial large-scale implementation, these companies have announced their goal to turn their efforts towards testing the implementation, as well as readying it for the migration of all TIW data, while still adhering to the relevant policies in the matter.
The DTCC’s chief technology architect, Rob Palatnick, ensured that the project remains ahead of schedule with his unique approach to the technology. Palatnick expressed his enthusiasm for the project, stating that there’s something exciting in the continued comfort that comes with the progress of the overall application and environment. Palatnick shared some insight to his team’s approach when he stated that they considered obstacles as ‘noise of progress’.
Palatnick also stated for the first time on public record that the protocol of Axo's AxCore was originally derived from the public Ethereum blockchain. In addition, he confirmed that both DTCC and Solidity uses the same smart contract language that rule their applications. However, the AxCore protocol has since been modified to include a modular consensus mechanism which allows it to tailor smart contracts specifically to the DTCC’s needs. The protocol also submits real-time reports to all relevant parties.
A representative from Axoni confirmed that DTCC’s achievement is a significant improvement for situational awareness for individual firms, regulatory bodies, as well as the entire industry.
The DTCC implementation of the AxCore differs from Ethereum as it does not include tokens. According to the Axoni representative and Palatnick, the system is powered by a "gas". This has implied that AxCore works on a system that is similar to the Ethereum blockchain.
Despite the fact that Ethereum is the most commonly used blockchain protocol, the DTCC stated that several problems usually arose when Ethereum was being used for enterprise-scale implementations. One such problem is that Ethereum’s business logic is often lacking in sophistication. DTCC has often countered that Solidity has difficulty in recognizing decimals, something which is often vital for a project. Additionally, Palatnick stressed Ethereum’s inability to pick up on exceptions and nuances. The smart contract language of Ethereum was not always comprehensive enough to allow for optimal business functionality.
Palatnick Stated that the DTCC has put a lot of thought into business processes and workflow that needed to be conducted off-chain to address the problems experienced with Ethereum. They were more focused on reducing the role of blockchain for data storage, so as not to hinder business processes and smart contract language.
However, after the first few months of working on the project, developers soon realized that conducting work-flow off-chain added unnecessary obstacles and introduced more complexity into the system. According to Palatnick, the developers ended up backtracking and slowly moved back towards conducting the majority of business on-chain. The greatest challenge has been determining which processes are required to be on-chain, and which needed to be off-chain.
The protocol is currently scheduled to go live at the start of 2018. However, before going live, the protocol still needs to be subjected to several tests and integrations with both the TIW, as well as external parties. Currently, the DTCC is collaborating with regulatory institutions in order to align their protocol to regulatory requirements. Palatnick confirmed that the reports of this process will be made available continuously thanks to their smart contract functionality.
Axoni intends to open-source the AxCore protocol following the launch.
The herculean undertaking was first announced in January, with the goal to upgrade the DTCC's current infrastructure. The firm intended to address the infrastructure pertaining to the centralized Trade Information Warehouse (TIW), specifically aimed at over-the-counter derivatives. In doing so, they hoped to be able to speed up transaction times, which before blockchain, often took weeks to clear.
To achieve this, DTCC launched a collaboration with IBM, the blockchain consortium R3, as well as the blockchain startup, Axoni. After completing the initial large-scale implementation, these companies have announced their goal to turn their efforts towards testing the implementation, as well as readying it for the migration of all TIW data, while still adhering to the relevant policies in the matter.
The DTCC’s chief technology architect, Rob Palatnick, ensured that the project remains ahead of schedule with his unique approach to the technology. Palatnick expressed his enthusiasm for the project, stating that there’s something exciting in the continued comfort that comes with the progress of the overall application and environment. Palatnick shared some insight to his team’s approach when he stated that they considered obstacles as ‘noise of progress’.
Palatnick also stated for the first time on public record that the protocol of Axo's AxCore was originally derived from the public Ethereum blockchain. In addition, he confirmed that both DTCC and Solidity uses the same smart contract language that rule their applications. However, the AxCore protocol has since been modified to include a modular consensus mechanism which allows it to tailor smart contracts specifically to the DTCC’s needs. The protocol also submits real-time reports to all relevant parties.
A representative from Axoni confirmed that DTCC’s achievement is a significant improvement for situational awareness for individual firms, regulatory bodies, as well as the entire industry.
The DTCC implementation of the AxCore differs from Ethereum as it does not include tokens. According to the Axoni representative and Palatnick, the system is powered by a "gas". This has implied that AxCore works on a system that is similar to the Ethereum blockchain.
Despite the fact that Ethereum is the most commonly used blockchain protocol, the DTCC stated that several problems usually arose when Ethereum was being used for enterprise-scale implementations. One such problem is that Ethereum’s business logic is often lacking in sophistication. DTCC has often countered that Solidity has difficulty in recognizing decimals, something which is often vital for a project. Additionally, Palatnick stressed Ethereum’s inability to pick up on exceptions and nuances. The smart contract language of Ethereum was not always comprehensive enough to allow for optimal business functionality.
Palatnick Stated that the DTCC has put a lot of thought into business processes and workflow that needed to be conducted off-chain to address the problems experienced with Ethereum. They were more focused on reducing the role of blockchain for data storage, so as not to hinder business processes and smart contract language.
However, after the first few months of working on the project, developers soon realized that conducting work-flow off-chain added unnecessary obstacles and introduced more complexity into the system. According to Palatnick, the developers ended up backtracking and slowly moved back towards conducting the majority of business on-chain. The greatest challenge has been determining which processes are required to be on-chain, and which needed to be off-chain.
The protocol is currently scheduled to go live at the start of 2018. However, before going live, the protocol still needs to be subjected to several tests and integrations with both the TIW, as well as external parties. Currently, the DTCC is collaborating with regulatory institutions in order to align their protocol to regulatory requirements. Palatnick confirmed that the reports of this process will be made available continuously thanks to their smart contract functionality.
Axoni intends to open-source the AxCore protocol following the launch.