Alpine Tech Forum: Unlocking the Full Potential of Synchronized Finance

Captions as YouTube publishes them, usually machine-generated, so names such as Daml and Canton can be misheard.

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   now we're going to have a very interesting uh agenda point because I don't know what they're going to say because they uh there's a big big announcement apparently GNA happen yes so I don't know what's going to happen but I know that uh we have two very exciting people on stage on one hand we have yal Rose if I pronounce this correctly do the a second found or the third third founder Carl is a

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   Founder before we had uh um uh excuse me um say Ser from chain link so I'm gonna hand over to danela Barbarosa I'm not that H behind me you're from um from Linux foundation and Hy Ed as well and you've been working with digital assets who I've been told has an Engineering Group here in surich so you're sort of have a Swiss footprint too and I'm excited to hear what you're gonna announce now thank you very much well thank you Alexander um and thank you for the home of blockchain for hosting us today um I promised I'll be

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   dancing and singing at the end just kidding uh for those of you who don't know me only me you've all I'll get you to dance for those of you who don't know me I'm Daniela Barbosa um I'm the general manager at the Linux Foundation across all blockchain and identity projects um I also serve as the executive director of what is today known as the hyperledger foundation which since 2015 has really been the

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   home for open source projects across the Linux Foundation um earlier today there was a panel uh and where we talked a bit about um LF decentralized trust which is the new super umbrella that's going to be the home for blockchain digital identity and other technologies that are focused on decentralized Technologies and I think you know as we mature in the market I know I've known Evol since 2017 um we're really seeing u a need for open source in the last panel uh talking

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   about open source and financial markets clearly indicated that open source has one in blockchain specifically there is no doubt about it there's no question about it that open source is needed but very importantly open governance and I've always believed very early on that as blockchain n networks matured and as blockchain networks in the Enterprise became adopted and really bringing value

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   to the market that in addition to building those networks with open source it would be really critical to making sure that the governance of those networks was also truly open and transparent um so I'm going to uh let yal introduce himself and talk a little bit about what we just announced today as a partnership with the Canton Network thank you uh Daniela and thank you everyone for joining I'm IAL I'm the co-founder of digital asset um so we'll we'll go straight to it we've been uh in

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    this space for quite some time it's getting close to 10 years and for us you know um 10 years ago we we had a vision that every asset in the world will become a digital asset and when we mean what we mean by a digital asset it's not that portion of the asset will be digital but it's everything is going to be digital from issuance to life cycle events to transfer everything is going

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    to be digital and we believe that it has to be on a public chain and I'll explain in a second why but before you do that you have to solve for some critical you know building blocks and the way we think about it is we say uh first of all privacy and control uh we believe that the Internet it's a public network but wouldn't work if you went to your bank uh website and you saw all of your peer uh accounts and everything that is available and you were able to just use all of their products and services to us

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    the word permissionless does not go hand inhand with regulation um so we really wanted to figure out a way how you can create a public network that can allow for privacy and control but at the same time allow to interoperate so uh last week um such Network got created uh it's called The Canton Network uh inspired by Switzerland so uh when you think about uh Switzerland um first of all our team is here in Zurich uh the ones that develop uh we actually have

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    the creator of Canton sitting in the back row being very humbled um but um when you think about a lot of these public permissionless chains that are effectively said all come into one network all put all of your assets into one network and you'll be able to interoperate with one another but when you start thinking about interoperating with one another when you have privacy well that's hard so when we start

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    thinking about well how is Switzerland working well Switzerland have different cantons those cantons can have their own governance rules they said their own tax regime they have all kinds of other rules but they all interoperate under Switzerland so for us that was really this vision for This Global Network um um and that's that's really what was announced just an hour ago but really launched last

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    week see clapping well it's great to see can you tell us a little bit about some of the participants in the kanton network you know it's been a long journey you know and today you know it's launched and we'll talk a bit about the collaboration that we have with the Linux Foundation as well but tell us a little bit about who is participating in the can Network um and some of the participants who are going to be part of the governance as

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    well sure I'll I I'll start actually with governance and I think that as we were getting ready to as we were getting ready to launch the network uh governance to us was extremely important and and not just because I believe that some of the permissionless chains out there in my opinion don't truly have open decentralized governance but also because of the target uh clients that we want to bring into Canton and when you think about regulated markets governance

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    is something that is a very important component so as we started thinking two years ago um should we just create yet another foundation and yet again another rule book um fairly quickly we we realize that if we really want to lead by example and kind of show that we're very serious about about what we're doing let's actually go to something something that is proven trusted and truly decentralized and and Linux have

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    been around for for quite a long time um we you know know Daniela for a long time and she's been a great leader and we just approached and we had some pretty pretty uh interesting conversations in the early days trying to explain why this is different uh but uh eventually we got over the line and and I think that uh you know it's it's a Bittersweet moment for me as a CEO because until

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    that moment I was a dictator I was able to do whatever I want we just said this is what we're going to do this is where we're going to go but uh as of last week uh the foundation was Set uh it's going to be a us Foundation we're not uh we're not hiding we're we're in the US it's uh going to some pretty interesting organization from a very wide spectrum but I would say that the the joint of

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    all of those organizations is that they really truly want to bring an open network that have proper governance built into it so digital asset as of last week is just one vote of uh many organizations I think we're getting close to 30 at this point uh and it's only going to grow I think uh from today and what we're going to focus on is how do we bring more and more regulated bodies to build what I

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    consider to be real world applications that drive utility to markets and to other Industries eventually uh I'm very very excited about that so that's on the governance side of thing and I think that if we didn't get that right I actually think we wouldn't get everything else right and funny funny story I won't say who but I ran into someone today at the gym and he said to me you know the fact that you chose Linux is one of the most important reason why we will get more and more comfortable

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    with this technology is because we truly know that this is an organization that can drive proper governance and that's that's extremely important when it comes to the network itself you will see in the pr that there's a pretty wide spectrum uh infrastructure provider technology providers different organizations that uh help run nodes uh manage Keys those type of organ organizations that we're used to from the crypto Community but what's really exciting is that there are some

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    organizations that you generally speaking in financial services that are publicly traded regulated that are also participating and I truly believe that the reason they are getting comfortable is again because Canton allows you to meet regulatory requirements it's not trying there's no regulatory Arbitrage needed you could actually build applications that meet the regulatory framework in different countries uh different jurisdictions and I'm very excited to show some of the applications

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    that either have been built already or we know are in the process of being built I recently listened to your uh podcast on it was Moody's podcast and where you talked about institutional adoption of these of these Technologies and it's been a a very long uh I know digital assets has been involved in the Linux Foundation since 2016 as one of the founding members of hyperledger but

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    the journey has been fairly long what are the things that you're seeing in the momentet that point to the institutions being ready to be part of not just participating but part of the governance of these uh Network I'll actually start first from The Regulators perspective and I think that this uh industry has done a disservice to Regulators in many many points and times and I think that the reason is that a lot of times when you hear crypto players coming in they come

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    in without understanding in my opinion first of all how Capital markets work right realtime growth settlement say that to any Market maker and see what their response would be uh but really what ends up happening as a result of that is they they knock on the door of regulators and they say everything that you've known for the last I don't know how many years forget about it we're going to teach you a better way how to run Capital markets and I think that

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    that does not a good thing for us as an industry because whether whether you like it or not and whether you think that you could do things better you need to have an appreciation to why we are where we are and in many cases there are things that you can do better but I would say that majority of the cases there is a good reason why regulation has been created so for us a big part of the challenge was education and actually

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    showing that on Canton uh in many cases probably in most cases you could actually do things on a public chain in a permissioned manner meaning everybody can join the netk but it doesn't mean that everybody can see everyone's information everybody can get access to every service just because they want to so there's a lot part of the education secondly the challenge is to actually

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    build something like that that works and I think that what we're seeing now in a lot of the permissionless chains suddenly they're realizing if I can solve for privacy and control good luck with regulated institutions so what they're hanging their hats on right now and hoping is that zero knowledge proofs will be kind of the Savior My co-founder is one of the creators of zero knowledge Bruce and we

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    do not use it because for us it was extremely important to make sure we use technology that is proven has been tested and is not futuristic if we want to do things today so to us the challenge I mean Canton has been in the work I mean you can ask ratco later but I think it's like seven years uh yesterday there was a a a announcement about global layer one uh I have a I have a a screenshot from uh yesterday someone sent me from 2017 rco publishing

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    a paper about unified ledgers so I think it takes time to build something like this the first version of Canton actually went out in 2020 and we weren't in a rush to Just Launch a public network because we also understand what are the consequences of getting it right or getting it prong sorry so for the last four years uh we have customers um that are heavily regulated using Canton and and I promise you we've found ways to do things better it's just if if if

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    we're thinking about the opportunity of public networks how they can transform Capital markets and other Industries it just takes time to get it right so a couple of things you mentioned you know one is the regulators and and I think from an education perspective we're here most of us are here for 0 zero this week in Zurich and I think you know a monetary authority of Singapore and

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    other Regulators worldwide and the bis have been doing a lot of that education and um getting uh the private sector very comfortable with some Concepts around um distribut you know decentralized um networks um you mentioned unified ledgers can you talk a little bit about what you're seeing um through the different projects worldwide that are happening um that align with what the Canton network is really focused on

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    doing sure I think when when when when you think about what is the value proposition of blockchain so a lot of times people talk about uh one source of Truth No reconciliation uh Opex reduction all of those great things and they are all true but the real opportunity and this is what people are understanding fnet Global layer one everything that you're seeing that is coming out in the news is the opportunity is if all assets and applications like the internet could

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    exist on the same network so I think that that was that was kind of even the vision of ethereum I mean it's it's everybody understand what is the opportunity I think the challenge is how do you create such protocol that actually gets people comfortable to use it for what I would say Mission critical systems so again back to that example of the internet the internet was a protocol to interoperate data but if there were no tools to allow

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    you to protect data meaning that you could share it only with whomever you want well the internet wouldn't be the success that it is today so very similarly what we're seeing is that a lot of the projects are trying to like and they are struggling because they're trying to say how can I actually have a public network where I have this interoperability but I don't give up on privacy and control so I don't don't

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    want to name names but there's there's a few projects for example um Basu was mentioned and I want to be nice to our friends at uh Linux uh other projects but for example um they brought in and they wanted to do a cbdc plus some additional applications on Basu and suddenly they rais their hands after years of working yeah we really need privacy if we can solve for privacy we can get even our peers or even the companies that we're regulate to agree to play on top

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    of it so you're seeing everybody's kind of landing and kind of funneling in my opinion into what we have seen from seven years ago will be needed which is control privacy and interoperability you're seeing all of them coming in and and I think what's exciting is that you know we talked about privacy for such a long time and everybody hated us like you don't need privacy the world can be

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    decentralized permissionless who needs regul ERS who needs anything like we can just all you know sing Kumbaya together and now they realize okay well reality is hitting them and now suddenly they start to realize so that's exciting for us because I think we've been kind of at it for such a long time and I'm very excited that we can actually show that it works in production you know I I do believe that

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    the Enterprise blockchain Community has always been very you know very aware of privacy requirements um uh and if you look at the projects worldwide whether it's Basu or others you know the modularity of what privacy means and what privacy means for the individual you know Network that is using that protocol is also very important um and looking towards making sure that these protocols do have modularity and

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    especially when it comes to you know like Central Bank digital currencies for example love them or hate them um essentially the Privacy models for each country could very drastically big difference based on legislative requirements on how they deal with with with with privacy and we hear this over and over again um so I think privacy is in in incredibly important to address um

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    across the industry but there's not going to be one solution that solves for all for sure and I think you know we've always said it's going to be networks of networks and today it's networks of networks of networks as well as you think about the can Network and there's always going to have to be requirements from an optionality perspective so let's there's three elements that we're talking about today we have the Canton

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    Network and I have a couple questions so to make sure that the audience understands what the Canton network is um there is the global synchronizer Foundation which is the governance of the Canton Network as an independent entity um that the Linux Foundation is going to be helping support the the open governance of that and then there's also the code that basically allows the Canon

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    Network to work which is a project called splice um that has also been open source by digital assets and the team has been fantastic over the last few months in working to bring that over to the hyperledger foundation soon to be the LF decentralized trust um but ultimately those are three unique um legs of the stool how do you say you know um so explain to me first the Canton network is it a public blockchain is it a permission blockchain give me an overview of that and then we'll go through the other two sure the so Canton

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    network is public in the sense that everybody will be able to connect to it but again very similarly how I can take my whatever browser and connect to the internet it doesn't mean that I can go into you know my bank account and just start using all of their products and services and see everyone's information so it's public from an access perspective it's not permission that everything that runs on it just is available for everyone so and again you actually said before like different

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    privacy models hence the name Canton we do believe that there is not going to be one model that fits all and we wanted to give the flexibility to the application uh provider to actually decide for example for those of you who know here in Switzerland you have a data domicile role cannot the zeros and ones cannot not leave the geographical borders of Switzerland and guess what if you wanted to be a cloud provider you had to

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    rethink how you do Cloud because cloud in order to do data availability replicates data all over the world not in Switzerland and very similarly if you want to use Canton in Switzerland you can actually configure it that the data doesn't leave Switzerland and that's again back to that same challenge with ethereum right that there it's just a global Legend right so we believe that there's going

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    to be these different models so the Canton network is all of these different cantons that will set their own rules based on local jurisdic uh local regulation on what is their business model there's many reasons why you would want to set your application to behave in a very unique and different manner the foundation is governing the protocol it's not telling different Canton this is how you work this is how you build your application but it's really

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    thinking again very similar to the internet as the internet evolved people realize oh we need more security so I need security certificates on my website I need I have a bug in ssage I I have all of these things so the the GSF is effectively governing who runs the underlying infrastructure and what are changes and improvements that we need to do to the protocol to have better type of Technology it again is not going to tell each Canton this is how you need to

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    conduct your business that is not what the foundation is going to do so that's an excellent point right because that's you know truly so participants in the Canton Network can come in and you know use their own protocols have their own governance have their own privacy you know requirements Etc so you have the kanton network you have the GSF which is the global synchronizer Foundation which is the governance of the Cel Network and then let's talk a little bit about the code

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    that is required to run on the Canon Network yeah so so the the protocol effectively that gets enforced in the Canton network has been contributed into splice um and there's there's a few other things around um data models and other components that will go into splice but what I get even more excited about is we've been thinking quite a lot of digital asset around well what are going to be different utilities that

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    exist in the network so if we're thinking about um I always like to give the example that uh uh reason in that python became so popular is because of all the open- source uh libraries that were designed by Quant so I used to work at Citadel and and I was at Citadel when python became very popular and it was you could just do everything in Python without paying Matlab at that time which

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    was the Quan tool right so there's going to be in order to to drive adoption in Canton there's going to be quite a lot of investment in different types of utilities that could enable doing all kinds of financial transactions or financial applications on Canton and that is also going to go into Linux because we truly believe that in order to have what we call inability and you want to embed some of these Financial applications they have to be open source

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    so there's going to be not only some of the underlying protocol technical stuff in Linux but also going to see quite a lot of commitment to add more and more utility that will be open sourced in Linux great so if participants want to run a Canton in the kanton network they can right it's open um how do they go about doing that um well I'm not the right person for that but um at the end of the day um everything that we've done at the core

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    is uh du to license so we I I always get the mistake of saying we have clients that are using uh Canton without paying us but they're not our clients as a result of that uh so there are entities out there that do use Canton they don't uh they don't uh need to have any interaction with us they can use the technology we at digital asset is kind of maybe the were the slides of red hat

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    and and and Linux we're more kind of we have a red hat effectively we have an Enterprise Edition uh that comes with support it has some additional features that we've built around um but you could use Canton today in a fully uh open- Source manner uh and and start building stuff on on the technology okay and if people want to contribute to some of those artifacts in splice and other open source projects that certainly right anyone can participate and we welcome um if actually if you go to the

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    hyperledger org website um the blog we just did a post introducing splice and how people can get involved and start contributing there as well um what about the global synchronizer Foundation um you know you have a great list I think we said we're up to 30 um participants founding members of the GSF um what if organizations um and nonprofits and others are interested in potentially

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    being part of that part yeah so I think and you'll be able to answer it better but I think that for Regulators uh nonprofit there's there's effectively a status and a way to join without uh being a paying member uh if you want to be a commercial organization that is responsible for running and being part of this uh infrastructure you do have to be a paying member uh to the Linux Foundation um I will maybe kind of like be the disappointing part is again can Canton is not a permissionless

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    network and because of the mission of what it's trying to drive it's open governance but it means that if you're an organization that the rest of the network believe could be a negative impact on the network they might decide that they can't be part of the network so it's not permissionless that everybody who wants to join joins it has to go through a governance mechanism uh everybody can be a member not everybody can be a validator of effectively on the network and so we encourage

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    organizations that that want to drive what I would call responsible Innovation um that have have again um uh respect to what it means to to operate within a regulatory framework I recommend to become a member and then help uh help push the governance forward so you know I think the the digital assets team and the community that you've built around Canton have done amazing work and really you know um

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    and it's great great to see the collaboration there so let's talk a little bit about where do you see what are the priorities for the next three months six months and 12 months next year we're here at 0 zero again one year from now where are we at uh next priority is vacation uh but uh after that it's really actually it is really taking a breath and and trying to understand what's going on because there's there's quite a lot of stuff that happened over the last uh few weeks

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    if I just kind of fast forward uh what I think will happen over the next year is I think you're going to see um some very interesting organizations starting to do really important um uh application on the network for us it's um continuing the education of regulators um but really it's showing real world I think that this is something that the industry has done a poor job in my opinion of showing that you could

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    actually drive real world utility and given where we are from a you know economic perspective interest rates where they are I actually think that this technology can provide quite a lot of opportunities uh if it's around collateral Mobility if it's around reducing um really non-differentiating uh processes that really don't add value when you think about it from an individual perspective so I think that an industry can come together and

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    actually reduce the cost quite dramatically so for me over the next year it's adding more members to Linux and and and and join the the open governance but it's actually a year from now when you and I talk I would actually want to show some real world applications that can actually show you that they measured uh the return and that the technology actually does does provide the value that uh everybody's been talking about for the last 10

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    years wonderful I'll hold you to that and I hopefully I'll talk to you before the year well um do you want to take a question there any questions thanks hi my name is Ralph kuy I'm uh deeply committed to open source understanding of financial assets so you're creating another Network right there's a lot of networks that exist already um my concern with this transition to these DT based

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    environments is that nobody everybody is thinking about the containers that travel on these networks but not about the content so how can we ensure that we have a unified standardized understanding of the financial asset that travels on these networks because if we don't then we're just back to the current system on another ra okay um so I think and I think what you are referring to is the data model of the

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    assets so listen I think I think for example ethereum did a very good job with erc20 and some of these standards effectively creating open uh data models um the nice thing about I would say blockchain technology for it to work you have to agree on a standardized data model for a specific use case in order for it to work because everybody has to agree so when I was talking about some of the utilities it's exactly what you're talking about so we are going to

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    invest quite a lot on data models and standardization around not just what are the assets but also what is a DVP and different you know basic Financial uh models so so there's quite a lot of investment at the end of the day I am a believer that standards get set by winners um I've I've I've set around the table too many times around consortiums that try to agree what would be a future data model and unfortunately it's uh in my opinion uh

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    in many times um unless there is a very strong financial commitment it just takes too long and in most times it doesn't get to the destination that I tried to achieve so what we're trying to do is we're trying to say we're committed exactly like you said to providing open data standards for both assets and applications and hopefully we work with organizations that can actually bring utility once you have

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    utility you have consumption that in my opinion how standards gets get created as long as you are committed to that from day one so that's why a digital asset pretty much all of our core technology is aache 2 license uh from day one even when we didn't have open governance all of our technology was Apache to license so it's it's a super important topic I wish I had a better answer that as an industry we can all come together and move at the pace that is needed to create it I think the

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    reality is the best way to create those standards is actually to find real world use cases that have an immediate need and show that these stand s can get get created by actually providing utility and value to the market maybe one more quick question if someone has one otherwise thank thank you very much so I I always remember kanton is referring to the Swiss Canton so there's a bit tiny bit of Swiss DNA also Engineering in Wolf so

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    I'm excited to see the utility in the use cases and will well Danielle and I will hold you accountable and Ralph too I'm sure just to be clear it's a French Canton because with the sea oh I see oh that's another debate now we don't want to we don't want to talk about French politics at the moment thank thank you very much thank you for making it you all pleasure having you thank you

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    danela thank you you can leave the microphone you get some ch obviously the discussion before actually when you remember what Yota said she said she actually praised Switzerland because Switzerland has an exchange that is working on blockchain and blockchain technology in capital markets so that exchange is here today I'm delighted to welcome Dave news I see he's moving thank you he's accompanied by someone who's also been very

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    instrumental in all of the pilots uh we have Dr Thomas Moser here from the Swiss National Bank please