The Shyft Federation has launched the Shyft Network, with a focus on security and privacy
The Shyft Federation has launched the Shyft Network, with a focus on security and privacy. The network is built with an opt-in toolset for trustless identity attestation, and DeFi compliance; the final piece for institutional buy-in to the blockchain ecosystem.
The Shyft Network is the layer-1 public blockchain protocol. The Shyft Federation is the collective that maintains, runs, and ensures the security of the network. The Federation consists of 21 nodes run by independent companies, organizations, and sovereign governments.
The status-quo of public blockchains is that they do not meet the existing institutional requirements; permissionless networks often require higher transaction fees and slower block times to secure and fully propagate information in a decentralized network. The federated design allows institutional partners to have a stake in the security of the network, and integrate their existing centralized infrastructure into a decentralized environment, enabling digital asset adoption at the institutional level.
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Co-founder Joseph Weinberg said: “the protocol’s multi-layered stack and trust infrastructure allows the blockchain industry to meet traditional requirements, without sacrificing the core pillars of decentralization, open-innovation, and privacy in permissionless protocols.”
The launch of the Shyft Network comes at a time where regulatory acceleration is occurring across the crypto ecosystem. The Financial Action Task Force (FATF) has created compliance standards guidelines for virtual asset service providers (VASPs) that the industry is working to comply with by the end of the year. With Shyft’s Veriscope system, users, financial institutions, and VASPs can comply with FATF’s Travel Rule, and create custom standards for decentralized compliance as regulations evolve.
In legacy finance, centralized technology such as SWIFT exists to collect counterparty information and route payments. Because blockchains do not require any identity information for routing payments on-chain, there is no way to determine counterparty risk. Veriscope can act as a decentralized version of SWIFT, by enabling the necessary counterparty discovery and coordination layer for crypto finance.
The Shyft blockchain is interoperable between blockchains and builds a reliance layer across the entire ecosystem that allows institutional requirements and regulation to be built, enabling new markets, and greenlighting institutional capital to utilize new protocols.
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A core issue slowing the adoption of the industry is that regulated institutions are not legally permitted to pool funds with unknown counterparties, which is the de facto standard in DeFi and other permissionless protocols. The Shyft Network was designed to solve the counterparty problem by providing a data attribution layer for use cases that require regulatory compliance.
The Shyft Network employs a rules engine that allows anyone to develop, deploy, and opt into rule sets based on jurisdiction, AML risk, and other use case specific requirements. This customizable rules engine functionality allows institutions to standardize risk policies across participants without compromising user data privacy mandates like GDPR (General Data Protection Regulation) and provides new, previously missing tools for enterprises to develop new products and services.
The Shyft Network is the next phase of the ecosystem’s integration with institutions, solving for the largest risks while enabling the next phase of global adoption.
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