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Adam Vaziri, CEO of Blockpass – Interview Series

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Adam Vaziri, CEO of Blockpass - Interview Series

Adam is the founder and CEO of Blockpass – a self sovereign identity application for regulated industries. Adam Vaziri’s background is as a blockchain lawyer and set up Diacle in 2013 to assist blockchain projects with compliance. He is a tireless blockchain entrepreneur and labelled a ‘bitcoin pioneer’ by Bitcoin Magazine.

Could you explain what Blockpass is and how the platform benefits investors?

Blockpass makes compliance for blockchain and other financial services easy and quick to adopt. It is the only KYC & AML verification SaaS that businesses can sign up to and in minutes conduct compliance checks on on-boarding customers. It is fully automated and hosted in the cloud, and requires no integration or setup cost. You can set up your account immediately and test the service for free. For investors and other individuals, Blockpass is a secure, user-centric gateway to financial services and other regulated offerings, allowing one click KYC submission.

 

You have a legal background; how did you transition from law to cryptocurrency?

I discovered bitcoin in 2012 and set up the first legal consultancy in London to specialise in bitcoin. My job was helping bitcoin companies get licenses and operate their business compliantly. A lot of the problems these startups were facing was how to comply but not spend too much on lawyers and consultants.

When I saw that compliance was expensive, I thought it was unfair that only large businesses could afford to comply. Smaller businesses are faced with a lot of compliance responsibilities and that just adds to their costs. It means to be a successful regulated business you have to be big. When regulations come in, we usually expect that businesses will find it too expensive to continue. So, they sell off or move. Anti-money laundering regulations for crypto businesses are coming into force for the whole industry this year. This will put a lot of crypto businesses out of business.

This is why we created Blockpass. Make it very easy and cheap to comply but have the best compliance in the market.

Most of the KYC vendors in the market lock in their clients for 2 or more-year contracts. We take that out. Blockpass is pay as you go. You only pay for what you use.

Integrating KYC into a business is a pain. Sometimes you have to integrate a vendor to check passports and a vendor to check sanctions list. It is complicated and time consuming. With Blockpass we are taking out that friction completely. A business just signs up on our website and generates a button which they send to their customers. That’s it. The business doesn’t have to think. They choose KYC Connect our full KYC package and they know that we will cover everything.

The kyc market checks users over and over again even though those users have already been checked. It is a complete waste of money. The way to fix that is give users a digital identity. That’s what we do. So, our 10k verified users don’t need to redo the verification process every time they sign up with a business. By not repeating this we can pass on the cost benefits to business by reducing the cost of verification.

Basically, compliance should be easy and cheap for businesses. That is our goal. Make it easy to follow the law. If you make it easy, then less businesses will make mistakes.

For users their experience of accessing regulated services is terrible at the moment. By giving users a digital identity, they can start to enjoy trying out new services without the headache of KYC. Just one click on the Blockpass app and they are verified.

As banks shut bank branches and every financial services provider is online you need an online identity too that you can reuse for all the services you want to access.

At Blockpass our community matters most. We give PASS tokens to all our new members as a ticket for them to join the ecosystem we are building. Once they are verified, they get benefits of being a member and accessing the services of our partners in one click. We want people who are hearing about crypto for the first time to come to us and create a digital identity and have a great experience of choice of different services they can access in one click and special offers from our partner businesses. When I first discovered bitcoin I had to do a lot of the work myself to understand who could be trusted and what to use. With Blockpass we want to make crypto easy for people, compliant and safe.

 

Once investors are verified, how often will they need to update their KYC documentation?

That depends on the merchant and jurisdiction. In the Blockpass console, the frequency of updates can be set by the merchant.

 

This was designed for the blockchain industry but could be used for many more applications, can you share what types of merchants would benefit from this application?

It could be used by any business that operates in a regulated industry, such as banking, stock trading, precious metals and gems trading, insurance and gambling.

 

Blockpass has the PASS utility tokens, what are these tokens for, and are they necessary to use the platform?

PASS tokens have KYC within the token. We created a token that needs the sender to be checked to send the token to someone else. Our tokens are how we register new members into the Blockpass ecosystem. We call this PASS Club. PASS Club members get access to content and special deals from our merchants such as free bitcoin brokerage fees, gold storage or a fee waiver for a bank account opening.

 

The PASS tokens also enable access to the PASS club. What is this club exactly?

We want to create a community of people in crypto that embrace crypto and have access to reliable information about vendors in the crypto space. PASS Club is about users also getting access to the best deals from the merchants we add to our marketplace. If they have a special offer, we want to give that to our PASS club members.

 

Could you tell us about the Blockpass Identity Lab and its collaboration with Edinburgh Napier University?

We founded the Blockpass Identity Lab in September 2018, which is led by renowned British computer scientist Professor Bill Buchanan.

 

You also offer PASS Verify which could benefit Dapp developers, what is this exactly?

PASS Verify is essentially a lower level of verification compared to our flagship product – KYC Connect. PASS Verify only provides Face Match and AML Monitoring services, while KYC Connect, in addition to Face Match and AML monitoring, also includes ID document authentication and Proof of Address verification. PASS Verify is also the gateway for users to become members of PASS Club, an exclusive e-commerce network for crypto enthusiasts powered by Blockpass and the PASS token.

To learn more visit Blockpass.

 

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Antoine Tardif is the founding partner of Securities.io, the CEO of BlockVentures.com, and has invested in over 50 blockchain & AI projects. He is the founder of Unite.AI a news website for AI and Robotics. He is also a member of the Forbes Technology Council.

Digital Securities

Evolving Trends in Token Powered Networks: Part 2

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Evolving Trends in Token Powered Networks: Part 1

by Mara Schmiedt, Global Strategy and Business Development Lead, ConsenSys Codefi

This is a two part article.  Part 1 can be found here.

Summary

  • The emergence of delegate work entities present a critical development to drive broader end-user adoption and participation, simultaneously posing new challenges to decentralization and token distribution in the evolving chapter of on-chain governance
  • Token distribution strategies, as a result of the above, have seen a proportional increase in use-focused distribution mechanisms including proof of use and interactive airdrops

 

Trend 3: The New Kids on the Block

THE EVOLVING ROLE OF VCS AND DELEGATE WORK ENTITIES

With the rise of Proof-of-Stake, on-chain governance and other protocol-native work functions, networks require active user groups that have both the expertise and/or technical resources required to provide network-specific services and infrastructure. At the same time, these productive crypto-assets present new value accrual opportunities for entities with crypto-native business models that play an active role in network participation and adoption.

On one hand, traditional venture models are increasingly evolving into crypto-native hybrids. Capital providers with long-term holding strategies such as Multicoin Capital and ConsenSys Labs recognize the opportunity to create additional alpha by supporting networks in their portfolio through the provision of infrastructure and performance of crypto-native operations. These entities are uniquely positioned to support teams that are building decentralized protocols to bootstrap and jumpstart network effects.

Well designed agreements and incentives can ensure that all token holders involved in early stage project funding in the protocol’s development lifecycle can be valuable supporters that earn rewards from their own and ongoing participation and contribution to the network.

On the other hand, there has been a proliferation of another stakeholder group – so called ‘delegate work entities’ (see article by Ben Sparango). Delegate work entities are network stakeholders elected by a token holder to perform network-native work functions, such as staking and voting, on their behalf.

The premise of earning rewards on productive crypto-assets in exchange for contributions to the network is an attractive one, yet not all token holders necessarily have the time, desire, or technical ability to perform the required tasks themselves. This is where delegate work entities come in. Today, delegate work entities including non-custodial (Staked, Stakefish) and custodial (e.g. Binance, Coinbase, Anchorage) providers are largely focused on providing staking services to both institutional and retail clients. I believe custodians, exchanges, funds and independent delegate work entities will play a critical role in driving broader institutional and retail adoption of productive crypto-assets.

Evolving Trends in Token Powered Networks: Part 2

Source: PoS Bakerz, 2020

Recent developments such as Katalyst, Kyber’s 2020 protocol upgrade, reveal the increasing relevance delegate work entities will play in the governance realm either as direct actors in the voting process or by offering proxy voting functions on a token holder’s behalf.

I expect to see further growth and diversification in delegate work entities and other service providers as the Proof-of-Stake landscape continues to expand and believe these entities will continue to play a critical role in driving broader adoption and maturation of the industry. A research study conducted by ConsenSys in March revealed that across almost 300 active token holders 41.4% would like to participate in on-chain governance directly while 28.2% would like to delegate their vote to a representative.

Evolving Trends in Token Powered Networks: Part 2

Source: ConsenSys Codefi

It is important to note, however, that delegate work entities, particularly custodians, exchanges and funds with large and accruing token allocations, could result in centralization risks particularly as Proof-of-Stake systems increasingly co-evolve into on-chain governance.

 

Trend 4: Evolving Token Distribution Strategies

THE FUTURE OF USE-FOCUSED TOKEN DISTRIBUTIONS

As network participation data indicates, having a broad distribution is not enough and it is critical that distribution aligns incentives amongst all network stakeholders. Healthy networks have a representative and actively engaged network of stakeholders.

How have the aforementioned trends manifested themselves as design considerations in more recent token distribution models?

There has been a proportional increase in public token distribution mechanisms focused on targeting actively contributing users.

Evolving Trends in Token Powered Networks: Part 2

Source: Smith & Crown, 2019

These have come in the form of both interactive airdrops, such as Livepeer or Edgeware, as well as different implementations of proof-of-use enabled token distributions such as NuCypher, Solana and SKALE that are focused on distributing tokens to actual users.

I believe that designing distribution models that factor in self-selected productive efforts beyond capital contributions in a sale or (pseudo)-random selection in a passive airdrop is essential to:

  • Maximize regulatory compliance by ensuring that a token is being used for its intended purpose on the network, rather than a speculative holding.
  • Filter for participants most likely to participate in the network to disincentive short-term speculation, price volatility and dumping.
  • Effectively bootstrap the network at launch, whilst enabling early adopters to familiarize themselves with the network and earn token-based rewards for their efforts.

 

Conclusion

With the technical maturation of token-powered networks, particularly in the context of rising Proof-of-Stake adoption, the industry is leaving its adolescent, wild west years behind as it enters the chapter of ‘actual’ use and utility.

The chapter of use also creates a new window of opportunity for stakeholders with crypto-native business models, including VCs and delegate work entities, that play a critical role in the adoption and maturation of productive crypto-assets and the decentralized networks they are a part of.

While there is still a lack of formal regulatory guidance on the blueprint for compliant token launches, I believe the emerging discourse, setting of industry best-practices and increasing focus on use-focused token distributions are steps in the right direction.

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Digital Securities

Natural Selection: Could Stablecoins Eat Into The Crypto Market?

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Natural Selection: Could Stablecoins Eat Into The Crypto Market?

Despite the financial uncertainty posed by 2020, the tumultuous year has represented something of a prosperous one for the stablecoin market. Since the beginning of the year, the cryptocurrencies that have their values pegged to existing assets like gold or the US Dollar have seen a heavy flow of funding as more traders look to buy into stable assets as a way of keeping their money from depreciating.

While stablecoins have become a useful store of finance that promises stronger protection against the disruption threatened by COVID-19 and subsequent recessions, there’s reasonable evidence to suggest that the currencies are actively evolving beyond their role as a trading asset and are increasingly being looked upon as a means of transferring value.

Over the coming years, we’re likely to see a range of central banks and large corporations start to tap into the stablecoin landscape, with global behemoths like Facebook already signalling their intent with the shelved Libra Project. With large scale investment into stablecoins looking like an inevitability, what will this mean for the crypto world’s smaller, un-tethered assets, like Ripple?

The Rise and Rise of Stablecoins

Tether entered the fray as the world’s first stablecoin. Launched in 2014, it took a matter of years before the US dollar-backed cryptocurrency started to receive widespread adoption.

As Bitcoin made its famous rally towards the end of 2017, more and more cryptocurrency exchanges started to make the switch from fiat currency-to-Bitcoin trading pairs to Tether-to-Bitcoin – thus enabling crypto-only exchanges to build on market share gains.

The late 2017 boom opened the door for more stablecoins to enter the market, with countless projects surfacing in a bid to emulate Tether’s purpose and success.

The subsequent year saw the arrival of several major players in the world of stablecoins, from USD Coin, to Paxos and TrueUSD.

As the arrival of COVID-19 caused widespread financial uncertainty, the market capitalization of stablecoins swelled up collectively to over $7bn in value in a matter of three months – with almost $6bn comprised of Tether investments.

Since the spring time, the rise of DeFi protocols have caused stablecoin markets to swell up by as much as $100 million each day – leaving the industry’s market cap more-than doubling in size since the start of the year.

Furthermore, more emerging trends surrounding the acceptance of stablecoin projects among banks have led to a greater level of acceptance among investors. The Liechtenstein-based Bank Frick recently announced that it would be supporting USD Coin – allowing customers to send, receive and store the stablecoin using their bank accounts.

The meteoric rise of the stablecoin market, coupled with ever-increasing levels of interest in blockchain technology from both banking institutions and big businesses alike means that stablecoins are set to emerge as the cryptocurrency market’s primary form of banking coin. But what will this development mean for coins like Ripple and investors who look to switch their holdings in Bitcoin to Litecoin, for instance, in order to leverage fast transactions?

Eating Into The Crypto Market

Ripple’s formative years brought widespread excitement for the blockchain technology that the XRP coin was built on.

Payments using the coin were set to be swift and free of hefty processing fees that some early crypto assets commanded. The focus of the coin was set on interbank payments, but its early success caused Ripple to expand into a leading crypto payments network around the world.

At the height of its popularity, Ripple was easily accessible on leading crypto exchanges that allowed easy access to digital finance that could be easily traded.

However, Ripple also unwittingly formed the blueprint on how to build a successful stablecoin.

The implementation of stablecoins that are pegged to various assets designed to hold their value amid economic downturns while operating on an easy transactional framework with limited processing fees has placed numerous stablecoins in direct competition with Ripple.

With the arrival of other corporate-backed stablecoins like the JPM Coin and the Utility Settlement Coin Project, it’s clear that the old guard of XRP faces a significant battle to avoid being drowned out by the market’s new upstarts.

The financial might of corporate stablecoins means that Ripple’s swift payment systems may soon be bettered via new transactional developments.

However, there may be some hope for Ripple due to the coin’s longevity in a rapidly expanding market. Ripple has helped to onboard over 300 customers during its lifespan, and possesses a greater level of crypto experience compared to its competitors.

It’s clear that stablecoins are here for the foreseeable future, and even hold the potential to overhaul national fiat currencies in mainstream usage. With market caps inflating exponentially, the old guard of un-tethered cryptocurrencies may be at risk of losing out as more adopters look to find practicality and consistent prices within crypto assets.

For Ripple, the notion of competing to recapture its place as the industry’s preferred coin for transactions seems too whimsical given the financial might of these new players introducing stablecoins into the market place.

Instead, what was once looked upon as one of the world’s most promising cryptocurrencies will have to tap into its experience to adapt away from its swift transactional roots. The cryptocurrency market is based on natural selection, where only the most innovative survive. In this unforgiving climate, many of the pragmatic cryptocurrencies of yesterday will be required to explore new blockchain developments elsewhere to maintain their relevance to adopters.

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Digital Securities

Wave Financial Makes First 1000 Barrel Purchase for ‘Kentucky Whisky 2020 Digital Fund’

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bourbon

Tokenization is beginning to attract increased attention from investors with this past week bringing multiple examples of important markers being met.  First, INX met its minimum threshold for token distribution, with $7.5M USD raised.  Second, Wave Financial completed its first purchase of bourbon/whiskey for tokenization through its Kentucky Whisky 2020 Digital Fund.

Whisky – A Different Approach

What is intriguing about these events is the underlying assets.  To date, the vast majority of tokenization efforts have surrounded real estate.  In this instance, however, the underlying assets are a trading platform and Kentucky Bourbon/Whisky.

Although investors have taken an interest in alternative assets such as wine and art for decades, the fund by Wave Financial represents one of the first efforts to tokenize an asset such as bourbon/whisky.

“For investors to gain exposure to real assets that have impressive investment fundamentals such as whiskey is very difficult, but now it is possible via our fund. Following the launch in March we are delighted to have completed our first tranche time sensitive capital raise and purchased 1,000 barrels of physical premium Kentucky bourbon whiskey on behalf of our investors” – Benjamin Tsai, President and Managing Partner of Wave Financial

Other examples of niche tokenization efforts include:

CurioInvest – Fractional investing in rare automobiles

TheArtToken – Fractional investing in fine art

Progress Made

Although reaching this first marker is an important moment for Wave Financial, it is just the first on a long road.  With Wave Financial expecting to tokenize between 10,000-20,000 bottles, this current crop of 1000 only represents 5-10% of its goal.

“With our unique access to Wilderness Trail’s whiskey production capacity for this year remaining open, we are in a great position to continue the capital raise for the fund.” – David Seimer, CEO of Wave Financial

If Wave Financial is able to reach its end goal, this would represent the tokenization of an entire years-worth of bourbon/whisky from manufacturing partner, Wilderness Trail Distillery.

A Full Set of Macallan Whisky

For those wondering if Bourbon/Whisky can indeed represent a good investment, look no further than Macallan.

Matthew Robson, 28, was the recipient of one bottle of Macallan single malt scotch whisky on his birthday, for 18 consecutive years.  He recently made the decision to sell this collection, which was left untouched over time.  This decision resulted in a sale, bringing in $56,000 USD.

While not an example of tokenization, the appreciation in the Macallan Whisky collection is exactly what investors are after.  Providing the whisky is properly cared for, it is a product that will not deteriorate over time, and is only produced in limited runs.  Furthermore, there will always be a consumer demand – simply put, people like to drink.  For each of these reasons, Wave’s Kentucky Whisky 2020 Digital Fund may just go on to prove quite successful for investors thinking outside of the box.

Speaking with Benjamin

When the Kentucky Whisky 2020 Digital Fund was first announced, we were fortunate to have completed an exclusive interview with one of its fund managers – Benjamin Tsai.

As the President and Managing Partner of Wave Financial, Benjamin Tsai was able to provide unique insights into the fund, Wave Financial, and the digital securities sector at large.

To learn more about each, make sure to peruse this discussion HERE.

Wave Financial

Founded in 2018, Wave Financial is headquartered in Los Angeles, California.  As a Registered Investment Advisor with the SEC, Wave Financial is able to offer investors opportunities such as the fund described here today.  In addition, Wave Financial offers various consultation and treasury management services to its clients.

CEO, Dave Siemer, currently oversees company operations.

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