Parfin's ethereum Layer-2 chain, Rayls, was recently featured on Project EPIC from JP Morgan's blockchain-focused business unit, highlighting the network's secure and compliant identity solutions to address privacy needs in financial markets regulated.
Parfin's ethereum L2 Blockchain Privacy Solutions
JP Morgan's Kinexys Digital Assets (KDA), the company's blockchain business unit, exhibited Rayls, the United Finance (UniFi) blockchain ecosystem, in their EPIC Project report. The report explores privacy and identity solutions in an institutional landscape, with the goal of “articulating the challenges and opportunities in this space and catalyzing dialogue and action across the industry.”
To achieve this, the KDA team conducted a Proof of Concept (POC) initiative, focusing on four objectives: validate institutional needs around privacy and identity, identify the criteria needed for a scalable identity solution, explore the viability of nascent privacy solutions in today's market. and bring together the institutional and native worlds of web3 to find a viable path forward.
As a result of this proof of concept, the report noted Parfin's ethereum L2 privacy solution. Rayls aims to provide a comprehensive system that “empowers banks to transact privately and with confidence” by integrating privacy, security and governance.
KDA highlighted Rayl's privacy ledgers, which protected “sensitive data on premises, with end-to-end encryption and Merkle root certifications enabling sensitive interactions.” The report details that privacy ledgers are connected through a decentralized blockchain called a “commitment chain,” a shared blockchain for privacy ledgers to communicate encrypted messages.
This allowed each entity to run its own local privacy ledger and interact with others via the atomic transport protocol, which supposedly ensured the correct transfer of assets between chains “while the privacy ledgers maintained independent and confidential records within of the network”.
Rayl's regulatory compliance was also highlighted as it integrated with anti-money laundering (AML), know your customer (KYC) and suitability frameworks through certification services, “ensuring trust and meeting regulatory requirements.” institutional”.
The need for identity and privacy solutions
According to the report, the multi-billion dollar asset tokenization market is poised for exponential growth and is expected to reach a multi-billion dollar valuation in the future. However, it highlights the need to address institutional-level privacy and develop composable, privacy-representative identity solutions to further develop the industry.
KDA maintains that the absence of standardized approaches and infrastructure among market intermediaries for identity verification and compliance creates “significant inefficiencies in asset interactions.”
Additionally, a lack of standardization often leads to redundant processes that fail to deliver the operational benefits that tokenization promises:
Without these fundamental elements, the industry's expansion will remain limited, particularly to attract traditional investors who expect strong data protection, comparable to that of conventional markets.
The report brought up some scalability considerations of the ethereum L2 project, noting that a privacy pool approach using ZKP instead of Merkle root certifications would provide more flexibility to Rayl's privacy solution. The underlying performance of the commit chain was also highlighted, as it is a “crucial factor for scaling our system.”
Rayls seeks to “bridge the gap between decentralized finance (DeFi) and traditional finance (TradFi)” by supporting banks and other financial entities globally navigate the complexities of digital asset management.
In short, Marcos Viriato, co-founder and CEO of Parfin, believes that “Rayls represents a paradigm shift in the way banks can carry out transactions safely and efficiently,” and adds that the financial technology company is “hoping to continue developing solutions that contribute to the future.” of banking.”
<img data-recalc-dims="1" decoding="async" class="size-large wp-image-338341 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/11/JP-Morgan-Unveils-Ethereum-L2-Rayls-Privacy-Solution.png" alt="ethereum, eth, ETHUSDT” width=”980″ height=”524″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/11/ETHUSDT_2024-11-08_14-14-31.png?w=1102 1102w, https://bitcoinist.com/wp-content/uploads/2024/11/ETHUSDT_2024-11-08_14-14-31.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/11/ETHUSDT_2024-11-08_14-14-31.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/11/ETHUSDT_2024-11-08_14-14-31.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/11/ETHUSDT_2024-11-08_14-14-31.png?w=750 750w” sizes=”(max-width: 980px) 100vw, 980px”/>
ethereum (eth) is trading at $2,920 in the weekly chart. Source: ETHUSDT on x/vrOjlupI/" target="_blank" rel="noopener nofollow">TradingView
Featured image from Unsplash.com, chart from TradingView.com
