The Oasis protocol, a public blockchain with the aim of creating a more private and scalable version of decentralized finance (DeFi), added the Shyft Network in a compliance project.
More privacy and security in DeFi
Announced Thursday, the partnership will produce anti-money laundering (AML) restrictions by leveraging elements of Shyft's identity system and item / IP address whitelist, while protecting users' business and transactional data.
There is also a line to go to make DeFi compliant with the General Data Protection Regulation (GDPR), the companies said. Oasis Labs, the company behind Oasis Protocol, raised about $ 45 million in a private token presale in 2018, backed by Andreessen Horowitz, Binance, Pantera, and others.
The Oasis mainnet, which was released in November, is a level one blockchain that aims to do the same kinds of things that Ethereum does, albeit in a potentially more scalable way.
It also allows developers to run smart contracts that keep data private while allowing machine learning calculations to run on that private data, said Luca Cosentino, Oasis Product Lead.
For now, Oasis is all about building bridges to the second largest blockchain, as well as Ethereum-based DeFi apps including Uniswap, Chainlink, Balancer and Meter. Looking ahead, Cosentino sees the potential to unlock a DeFi universe with far fewer limits than the current one.
“Ethereum is highlighting some problems of the DeFi space both in general and on the transparency side,” Cosentino said in an interview. “Despite being transparent, it doesn't offer any information to the other side of the transaction. If I'm an institution and I want to participate in DeFi, I really can't because I don't know who I'm working with on the other side ”.
Institutions are welcome
The problem, said Suzanne Ennis, senior vice president of global partnerships at Shyft Network, is that large liquidity providers cannot interact with the DeFi space due to regulatory constraints and a lack of clarity on AML-compliant procedures.
Shyft is known for its work in helping cryptocurrency exchanges identify each other and exchange data in a "Travel Rule" compliant manner for Financial Action Task Force (FATF) virtual assets.
In this case, Shyft is shedding light on DeFi counterparts via an identity and reputation system. “The partnership with Shyft is important because it creates a digital identity, showing that who you are, who you say you are and your reputation are linked to your identity in a very complete way,” Cosentino said.
Therefore, DeFi participants will be required to provide proof of their identity which will be used to whitelist their addresses, he added. Whitelisted addresses will be able to interact freely with both DeFi providers and traditional institutions as they have a higher level of trust.
