Rachid Ajaja on AllianceBlock’s compliant decentralized capital markets

0:01i'm ashton addison from eventchain for investmentpitch media and fintech news network and today on blockchain interviews we have rasheed ajaja the founder and ceo of alliance block rasheed welcome to the show and thanks for taking the time to be here hello ashton and uh really thank you for having me it's pleasure to be here you're welcome i'd love to kick off our

0:20interview by just starting with what is alliance block how is your platform working exactly and how does it bridge traditional finance with decentralized finance okay yeah so so alliance bloc the aim our vision what we want to build is the world's first globally compliant decentralized capital markets in order to bridge traditional finance and decentralize

0:45finance so actually it's been one year old 2019 we have spent it into worldwide incubator especially specifically in london and in zurich kickstart innovation where we had the occasion to speak with financial institutions such as credit suisse postfino swisscom and what we noticed is that most of these financial institutions they are really interested into the

1:09asset tokenization tokenization of financial instruments but actually it was really complicated for the institutional to enter these markets why because of fuel reason so the first reason is there is no recourse no dispute for this institution is if you take the traditional markets you have always centralized authorities where you can do these disputes

1:29or recourse the second problem is that you have multiple blockchain and each blockchain they have their own standard of the the tokenization of the financial instruments so imagine i am a bank one bank a i use for example hyper ledger and there is another so i i start doing tokenization and you have a bank b that they have they are using let's say ethereum or koda so another one they are

1:54using algorithm so it's very very complicated and uh and this is why it's it's really difficult for this institution to use them and actually the third problem is that you have it's what we speak about the interoperability okay there are there isn't um enough interoperability in order to to be able to trade crochet in these digital assets so and of course the most important

2:17problem what and what we are solving is the cross-border transactions and cross-border regulatory and compliance a lot of tokenization platform what they are doing or or they are tackling this problem by putting all the compliance and rules within the tokens and actually we don't believe that it will it will work because if sometimes you have complicated financial instruments

2:42or you have you have rules that are constantly updated and do and this is what happened basically with compliance and regulation so what we want to do and taking all these problems and all these pain points so we saw that if we want really to build the bridge between decentralized finance and traditional finance and make institutional finance like go into this

3:04tokenization era is by solving the cross-border regulator and compliance and this is why what the the really the heart of our protocol which is infrastructure to build these decentralized capital markets is to be ordered to build this cross-border regulator and compliance layer where when you do a transaction you want to issue you want to invest you want to

3:25trade whatever you want to do with this tokenization uh tokenized assets you will be able to have the pre-trade check so which mean you will comply with the rules and so instead of waiting for the regulations to come to to the blockchain so we are using the current regulations and compliance rules that financial institutions are using okay and we adapt the tokenization to them so

3:50this is exactly what we want to do and by solving this problem we will be able to create framework where exchanges crypto exchanges tokenize platform will be able to plug to our protocol and hence being able to to you to to use it in compliant way and have the flow of money from institutional finance very interesting rashid and yeah there's a lot of problems you pinpointed there

4:14and there's so much benefit to to having this decentralized finance ecosystem but it's getting past these hurdles of the regulation as you said of the interoperability of different private ledgers and the issuance of the tokens how do you have that compatibility and your team has been working on this platform for quite a while now uh to make sure you get all the kinks

4:35out and obviously it's very complex with all of these different faucets um so in when what way how are you now you're leading up to the launch how have you solved all these problems into one ecosystem and made it easy but not too complicated by solving all these different little problems yeah so actually our our really i would say our narrative and the our ambition it was

5:01constructed by all this experience that i have spoken earlier but specifically the last four months where we know exactly where we are going so instead of doing like we are not a tokenization platform so we are infrastructures uh that will help all different service providers to plug to our protocol leveraging the cross-border regulatory and compliance layer

5:25and be able to provide the services in a complete compliant way where financial institutions will have access to them and also financial institution will be able to provide services or new services to their clients okay so where we are now so we have started our technical roadmap which we should release by december where we will have we will show exactly

5:46what we will do our strategy and the first products we will we will build and actually we are very very excited because we cannot speak about it right now but in the next few weeks we will release really our use case where we have already some some interested uh clients that want to use it and we will be able to start the implementation to have the products released uh by end

6:09of q1 2021 early q2021 very exciting and the decentralized finance space right now throughout 2020 at least has grown exponentially in terms of the value that's locked into decentralized protocols went from 1 billion in the spring to over 11 billion right now and that's a 10-fold increase and everything is going so quickly you know do you see this

6:35as the right step uh in the direction towards a larger decentralized finance ecosystem and how does alliance block play a role in that specific part of defy so indeed you are totally right so we saw a huge increase in short uh amount of times and basically this is crypto what happened in one month crypto it's like two years in in traditional world so so when when we saw like all these

7:01amazing things that had happened so we spoke about liquidity farming uh yield farming liquidity mining and all these new new things that are happening right now and we are so well like that we had a boom on all these decentralized finance applications and then it's stabilized a little bit so in my opinion well as what exactly happened with um in the within the ico period so we

7:26saw like a huge boom then we have a burst and then we will see all the projects basically that are building uh a good product with with the market fits with they will have clients also to grow so i believe that this way that we saw the huge increase it will go down bits a bit because there is a lot of speculation also and lots of project they will not

7:47maybe deliver but then we will see huge increase of all these projects that are taking it seriously this decentralized finance and because we saw a lot of amazing projects you have projects that are trying to tackle the peer-to-peer lending the credit risk you have projects that are tackling the the liquidity the the liquidity the liquidity aggregations

8:05with thanks to our partners for example orion protocol and so many other projects that they are building amazing things and i think it's very very important step for the next in order to have the adoption of crypto but also the the the wave of decentralized violence and i i we speak a lot with financial institutions traditional ones and there is a huge interest actually in

8:28this decentralized finance movement because it's open so many doors and and it can be leveraged in an amazing way and that's why like it's it's i think we are at the right time at the right place with alliance block especially uh we've been speaking about defy since 2019 so you can check this in our green paper where we speak about decentralized finance ecosystem

8:51so we've been speaking about decentralized finance before even we hear uh about this this uh all what we are saying now about decentralized finance and we think that we are at the right spot why because we have the solution where we will bridge these two worlds and as i said in the beginning is thanks to to compliance and regulations and by solving this problem actually it

9:15will open the door to all these decentralized finance applications that are doing amazing products to the institutional finance work and this is also like why we think this is really exciting and it's the right moment yeah it's definitely a very exciting time and i i from what it looks like your team has been focused on this from you know before uh the hype even started and it it looks

9:38like you're not trying to rush into it to you know jump into some short-term gain this is really about changing the industry for the medium to long-term and and also just allowing those institutions to get involved in that big money to be able to transfer value around um so that's that's really exciting uh rasheed exactly yes and i want to focus a little bit as

9:57well on the alliance block token because you do have a currency that's built into the platform can you just talk a little bit about how that works within the ecosystem how it provides value yeah so basically our token is designed so we have we spent a lot of time designing the token economics around our tokens and and we think that the token need to have like a very very

10:20important place in our ecosystem and that's why if you see the most important thing are of course mistaken uh the reward for the community and all the people that will will join the network we have even um part like in our smart contract if you check on gecko and you see all our smart contracts which are completely public we have the node smart contract where we

10:41will have 150 million tokens which is 15 of our supply that will be completely dedicated to the nodes and we never go to the circulation supply and it will be also the medium of exchange of course and it will be also the fuel of our network all the transactions fees especially for our first product where we will have um let's say two parts issuer investor

11:05borrower lenders and all these kinds of uh people that we interact with we need this network we'll be able to to we will use ilp team for the transactions and it will be the the fuel as i said of of the network and of course also we are having what we call the token burn so we'll have two burn mechanism the first burn mechanism is everything that we receive in term of

11:28fees there will be a percentage that will be burned uh so in order to have stability of our tokens but also something very important for us because we've been uh supported by the community since 2018 and and i think this is something important also to show that like we call about our community and we have um a percentage or once we we have our product 20

11:51go to markets once we have our clients they will be a part of the revenue that we have from our products that will also be used to buy back the tokens and burn them or to go as a reward for the community yeah that's great i think that that's a crucial part of the ecosystem to have the community which with a lot of these projects it's really community

12:14grown and community-led from the beginning so to be able to give exactly uh it makes a lot of sense now the platform is soon to be launched do you um do you have uh you know there's a lot of parts there's a lot of moving parts there's a lot of parties to have an infrastructure platform especially that's cross-compatible with you know cross-border payments

12:35on the regulatory side as well as well as the different uh infrastructure for different you know parties that are issuing whether it be on ethereum or corda uh or hyperledger as you mentioned and how future proof uh do you have you made the platform so that if there are new regulations and new jurisdictions that come in or there are new blockchains that are issuing

12:58different type of token with a different standard um and that comes in the future you know how future-proof is alliance block built for that yeah that's that's really interesting question and really good questions because um because we've been the way we want to build our protocol so we call it more protocol the it's to to be evolutionary because like uh regulations are always

13:20evolving uh and also like the new technology are always coming and in crypto there are amazing technologies and it's built like so fast uh with all the research that are being done right now so the in order to to answer to your question specifically so we will have different type of notes one of these nodes are institutional nodes that will run uh not for our network and what will

13:45happen actually so there will be there will be uh law firm um regulatory and compliance experts that will will check all the updated rules uh in compliance and regulations in multiple jurisdictions so at any time any moment if there is a change of the rule or updates of the rule there will be a proof of authority consensus and so the first one would for example

14:10say okay we have this rule that changes updated so he will push it and then when there is consensus and all these uh participants will agree so it will be pushed to our launch the logic will be pushed into our smart contracts and it will be automatically used in our role engine for this cross-border compliance rules that's great okay yeah and also you said

14:32something about uh if there is any new blockchain or any new neutron uh new blockchain or a new standard so for us the token is basically a derivative of we speak about tokenization or financial assets so the tokens is um a derivative or is representative of the real assets it could be shares it could be bonds or it could be it could be whatever financial financial instruments

14:57and these instruments in the traditional world they will sit for example in central security depository so our our i think our edge is instead of having all these standards with different blockchain we take the tokens which represents the real assets and is completely linked to the central security depository and if there is any transfer of ownership any trading of the tokens

15:21the protocol will communicate to the central security depository and hence we will have his communication between the decentralized world and the traditional world where the traditional finance can always be able to to do business as usual and they will not depend on the standard of multiple blockchain and you can do this with any blockchain whatever the standard they have because

15:44we don't use the standard of the blockchain but we use only the token which represent the assets very cool and i think that's definitely the way to approach it moving forward towards the lunch and we're running out of time rasheed but can you explain a little bit about how can the viewers get involved with learning more and getting into the community before the launch and as well

16:05with the token i believe it's already available as well and and how can they access that yeah exactly so we are available now on uni swap we've been approached by many exchange and on our community lots of people asking about a centralized exchange but actually we have a very very important narrative which is compliance and regulations and we are very careful about what exchange

16:27will work with so we will have a big announcement in the next few weeks about centralized exchange which fit perfectly our narrative and perfectly with regulation and compliance and uh and also we will have amazing news in the next few weeks it will include uh big partners in the traditional finance in decentralized finance we have uh our products that we will uh that will have like an

16:49amazing impact on decentralized finance as a whole and then also our first use case which will be our products so people can can can can check all our information on our website and exclusively here we we will release our new website with all the information and also we we have our telegram channel of course and mediums we release a lot of blogs lots of mediums

17:13to explain for educational purpose about circulation compliance about digital assets tokenization and and all these are very important also to show the community what we are aiming to do and why we are relevant in this industry to to bridge to work definitely thank you for that rasheed i will leave those links in the description box below for the viewers

17:35all the best with the launch for alliance block moving forward and let's follow up in the near future thank you very much for having me again and it was really interesting to be here and for the uh for the anecdotes it's my first interview so i'm really happy to to do it with you yes thank you very much you