AllianceBlock 2020 Year-End Review: A Look Back and a Look Forward
At the heart of AllianceBlock is our vision to connect Traditional Finance markets (TradFi) with Decentralized and Digital Asset markets (DeFi) bringing new financial opportunities to both worlds and building the foundation for the next generation of investment banking. Through a series of carefully designed and crafted blockchain-based products, our experienced team has been working tirelessly since 2018 to build the world’s first globally compliant decentralized capital market. At its heart will be a modular, blockchain-agnostic Layer 2 protocol that will bring value to the entire space by bridging the gap between traditional and decentralized finance and will provide the first fully audited and regulatory compliant gateway for retail, institutional and professional investors alike. This article is intended to provide a brief overview of all our achievements in the year 2020 and illustrate our vision for the year 2021.
1. AllianceBlock and year 2020
As the year draws to an end, we are closer than we have ever been to achieving our goal of bridging the gap between traditional and decentralized finance. Our technical team has achieved great success and made significant progress in terms of product development, growth, and market penetration in furtherance of this pursuit.
1.1. Partnerships and technological collaborations
Considerable effort was put into furthering relationships with new partners, who we believe to be essential to the future success of AllianceBlock. We have not sought partners just for the sake of partnership, or as a marketing exercise. Instead, all of the partnerships announced have been strategically and technologically important, to allow us to leverage existing proven technologies and implement our products, getting ever closer to fulfilling our vision.
We have embarked upon a number of exciting and significant partnerships this year, with partners including:
- Chainlink — Wide-ranging collaboration bringing decentralized financial data oracles
- Ocean Protocol — To enhance compliance in decentralized capital markets
- API3 — To develop cutting-edge decentralized identity solutions and Airnode deployment for enterprise-grade APIs
- Parsiq — To offer new opportunities to leverage data in both DeFi and TradFi
- Covalent — To enrich the data ecosystem of decentralized capital markets
- Orion Protocol — Industry-first integration aimed at providing traditional finance entities with a singular, compliant, and non-custodial gateway to the entire digital asset markets
- Aikon — To secure traditional finance user identities on the blockchain
- CertiK — To boost network security, transparency, and efficiency
- Frontier — To build chain agnostic DeFi aggregation layer. Frontier also become the first strategic partner to join the AllianceBlock Liquidity Mining Partnership Program
- Binance Smart Chain — Multi-phased cooperation to bring financial products onto BSC. First officially endorsed and audited Liquidity Mining Program on Binance Smart Chain
- Ramp Defi — To Provide NFT Liquidity For Regulated Traditional Finance
These partnerships are in addition to the pre-existing partnerships we have built with both Quant Network (Streamlining the Overledger Solution to Blockchain Projects and SMEs) and HoloChain (supporting AllianceBlock’s deep learning, probabilistic programming framework utilizing Holochain’s agent-centric data structures). We look forward to working closely with all our partners throughout 2021 and beyond.
1.2 AllianceBlock Liquidity Mining
This year we have successfully launched our first standalone product — AllianceBlock Liquidity Mining (ABLM), forming the foundation of the AllianceBlock ecosystem. ABLM will seamlessly integrate with the rest of the AllianceBlock Ecosystem. The role of ABLM is to bring sufficient liquidity to DeFi ecosystems and prime them to accommodate transaction volumes and liquidity demands associated with global financial markets and enable us to launch a suite of sophisticated financial tools and products built on top of it. ABLM is a live product and as an important component of our ecosystem, it grows, matures, and expands, new features and product dependencies are being added to provide additional utility and capability, here are the most important additions of this year:
- ABLM v1.0.0 — Core ABLM platform
- ABLM v1.1.0 — Stability updates and extended analytical functionalities
- ABLM v1.2.0 — Multi-Asset and Multi-Protocol support and AllianceBlock Liquidity Mining Partnership
- ABLM v1.2.7 — Extended UI and Roadmap update
- ABLM v1.3.0 — Multi Chain support and LM on Binance Smart Chain
Since its release, ABLM has enjoyed considerable popularity and validated our iterative approach to liquidity sourcing and provisioning. Below are core usage statistics as they stand at the time of writing of this article:
- Supported blockchains: 2
- Deployed liquidity pools: 5
- Supported trading protocols: 3
- Total Value stored in ABLM pools: $3,081,161
- Total number of transactions: 31,513
- Number of users: 4679
2. AllianceBlock and what’s ahead
2.1 The AllianceBlock Model
There were several potential approaches we could have taken to structure our model. One of these options was to build a monolithic infrastructure protocol, however, we believe that this option would prove to be costly not only financially, but also in the time taken to complete it. Instead, we have decided to implement an agile modular model, which allows us to develop far quicker and provides a faster go-to-market strategy.
As such, the protocol is divided into multiple modules. Each module is capable of being a standalone product, generating its own revenue and with its own targeted market niche. However, each module fully interconnects with the rest of the ecosystem in order to create the world’s first decentralized capital market infrastructure, heralding a new era in investment banking. It is important to note that these are only the first seven products we are focusing on; there are more products to come.
1.Cross Border Regulatory Compliance Rule Engine
Our robust rule engine is core to the AllianceBlock protocol. As outlined in our whitepaper, this cross border regulatory compliance layer will be deployed within financial institutions and DeFi projects that understand the value of maintaining compliance but who want a more cost, agile, and resource-effective means to do so. We hope to be able to disclose details about a partnership involving our rule engine with a traditional financial institution soon.
2.Compliant P2P & NFT (lending, borrowing, and investment protocol)
We are creating a peer-to-peer (P2P) lending and structured loan platform with a fiat gateway. NFTs can be used to tokenize real-world assets, which can then be leveraged in lending, insurance, or any other DeFi solution. Fully decentralized and with support for Ethereum, BSC, Polkadot, and more, we expect V1.0 to be ready and fully functional by Q1 2021. This platform will be the first product to truly bridge traditional finance and DeFi.
3.Onchain Investment Data API
To facilitate the AllianceBlock investment terminal, we need data. For this reason, we are building an API that will house both on-chain data as well as data from specialist financial providers. This will allow us to create cutting-edge analytics for our partners to leverage. The first version of the API will be released in Q1 2021.
4.DeFi Investment Terminal
By leveraging our Data API product, we can build products including our Investment Terminal. This will allow users to access real-time, granular, and actionable blockchain data. This terminal will aggregate all DEXs and can be used by users to derive optimal strategies to enter and exit pools to maximize their P&L, Impermanent Loss hedging, the provision of a derivatives product, and far more. The DeFi Investment Terminal will be released on a continuous delivery basis, we expect the first iteration to be released as early as Q1 2021.
5.Derivative and Structured Product Pricing Engine & Risk Analytics
Liquidity mining is an imperfect solution at present, as users risk losing funds due to Impermanent Loss. We are working on integrating a robust Pricing Engine into both our DeFi Investment Terminal and our own Liquidity Mining solution first, before subsequently making it accessible to any project. This product will provide cutting edge risk analytics, backtesting, and stress testing strategies, displaying and predicting the volatility surface, and far more. It will also have a mathematical library capable of advanced modeling including partial differential equations (PDE), Monte-Carlo, and much more.
Building on top of our Data API, the Data Tunnel product will enable widespread adoption of decentralized data access. The Data Tunnel, combined with an extensive API gateway, will make it easy for anyone to publish, monetize, use and analyze data through the Ocean marketplace.
Data is essential for capital markets and even more so for the creation of the decentralized capital market. For traditional players within the ecosystem such as global stock exchanges and major data providers, having the opportunity to easily publish and monetize their data will provide not only a new avenue for entry into the DeFi space but also a new avenue for revenues. Our recent partnerships with Ocean Protocol, API3, and Chainlink are reflective of this goal.
We have already delivered the prototype of this marketplace, and such was the potential of our prototype that Ocean Protocol awarded a grant, the largest awarded by Ocean since its inception, to AllianceBlock. We are now working on delivering a Proof of Concept (PoC) in January, with an MVP to follow by the end of Q1or the start of Q2. The final product is expected to launch in May.
7.Trustless KYC/AML and Identity Verification
This year, we announced our partnership with API3 to create a PoC for a decentralized identity solution, allowing users to prove who they are in a trustless manner. We are also partnering with one of the largest KYC/AML providers in the world to assist in creating this generic decentralized anonymous identity solution. Importantly, users will always retain control of their data and all information will remain secure. Verification will be done anonymously, in much the same way that a ‘blue tick’ on Twitter allows users to know that the account is verified without needing to know who is behind it.
This product will not only be applicable to Ocean Protocol and API3 but will function as a standalone product. Adherence to KYC and AML are mandatory financial regulatory requirements that compliant firms will need to adhere to as the industry develops, and thus are integral to the decentralized capital market. This product is expected to be delivered in Q2 2021
2.2 Moving forward
We will share more details in the coming weeks on the use cases of each product in a series of deep-dive blog posts. These use cases include:
- Simplifying cross border regulatory compliance
- Regulated tokenized securities offering
- Truly compliant decentralized open finance solution
- Consortia of private banks and wealth managers
- Fund distribution
- Regulated digitized derivatives
- Compliant P2P lending and NFTs
- Trustless KYC and AML
- Decentralized identity management
- Rating and Pricing Engine
We will also outline in these case studies the role of our partnerships, as how each partner we are working with has a specific role in the development of our ecosystem.
Each product will generate new revenue streams for the AllianceBlock ecosystem and its participants and will operate as an integral part of the foundation of our protocol. Once these products have been delivered, AllianceBlock’s position as a unique, leading player within the wider decentralized ecosystem will allow us to start working on infrastructure for the creation of decentralized investment banks.
The decentralized investment banks will propose all types of products and services, including debt, equity, trading, research, corporate banking, private banking, and wealth management, connecting both worlds and offering everybody new, bigger, and better opportunities. We are excited to see this work come to fruition and look forward to continuing in our mission to achieve these objectives in the New Year.
3. Closing words
This year has been a challenging year for many. We would like to thank our community for their relentless support and dedication throughout 2020. While we are extremely proud of what we have achieved this year, we are only just getting started. 2021 promises to be a great year for AllianceBlock, and we cannot wait to share more with you over the coming months.
Until then, we wish all our community members, business partners, and everyone else reading a happy New Year!
Thank you all for your continued support,
The AllianceBlock Team
AllianceBlock is building the first globally compliant decentralized capital market. The AllianceBlock Protocol is a decentralized, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product.
Incubated by three of Europe’s most prestigious incubators: Station F, L39, and Kickstart Innovation in Zurich, and led by a heavily experienced team of ex-JP Morgan, Barclays, BNP Paribas, Goldman Sachs investment bankers, and quants, AllianceBlock is on the path to disrupt the $100 trillion securities market with its state-of-the-art and globally compliant decentralized capital market.