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Why we need to move to public blockchain
(Last year abrdn joined the governing council of Hedera Hashgraph)
January 02, 2024
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To date the vast majority of institutional tokenization initiatives have used permissioned blockchains. Duncan Moir, who is a Senior Investment Manager at abrdn and leads their digital asset business, explores why he sees the need to embrace public blockchain.

Real-world asset tokenization came to the fore in 2023. More than just a buzzword, banks, asset managers, and regulators have increasingly recognised the potential offered by representing funds and securities on-chain. The move promises greater financial democratisation, liquidity in less private markets, and reduced costs. But for tokenization to really take hold, the financial world must progress beyond proof of concept private blockchains and embrace public blockchain.

The decision to begin with private blockchain is understandable. They offer control and implementation with limited regulatory considerations; ideal as a starting point as companies educate themselves on using blockchain technology. This approach is inherently limited however, with centralisation coming at a cost.

Public blockchain benefits

Public blockchains offer significantly more potential to scale. While private may allow for quick and easier tokenization, they remain in a private ecosystem, requiring investors to come directly to each provider. Not only does this create greater administrative burden from a KYC perspective, it raises the hurdle for liquid secondary market trading of the asset as it can only be traded within that ecosystem.

With public blockchains, it is easier to transfer assets across multiple platforms. This means that investors can come to a centralised venue, covering KYC there, while gaining access to products from a range of providers that have tokenized on public chains. When secondary market trading is introduced, you will have greater liquidity through a single venue and better price discovery. Liquidity can be further enhanced by connecting the centralised exchange to decentralised exchanges, and since the asset is on a public chain, investors can self custody.

Perhaps most importantly, public blockchain brings innovation with which private likely can’t compete. A key element of public blockchains is that they require payment in their native cryptocurrencies to operate. While this may be a cause of concern for some considering public blockchains, they create an important incentive for blockchain entrepreneurs, giving them “skin in the game” as the value of the cryptocurrency could increase as the use of the blockchain increases. This further incentivises blockchain developers, who are often paid in the cryptocurrency, to innovate and create competitive advantages versus other blockchains.

Innovation in traditional financial institutions is certainly possible, but it’s unlikely we would see the same level of innovation as seen at public blockchain companies, which offer a unique experience for, and can attract, leading developers and, increasingly, technology and financial service business people.

Public permissioned blockchain

A better solution for enterprises is public/permissioned blockchain. In building on public/permissioned, providers get the scale benefit of public blockchain, with the enterprise-level governance of private blockchain. Cryptocurrencies are generally needed, which enterprises will need to accept to evolve, and solutions exist that allow users to avoid touching the crypto directly. Importantly, public/permissioned blockchains are operated by select groups, often larger trusted organisations. This gives greater control over the capacity and speed of the network, while providing comfort to large corporates over the decision making at the blockchain company and creates an element of trust that is more familiar.

Last year, abrdn joined the governing council of Hedera Hashgraph, a public/permissioned enterprise DLT run by some of the world’s leading companies, that offers speed and security at extremely low fixed dollar costs. Earlier this year, abrdn’s money market funds became available in token form through UK regulated digital assets firm Archax. By using Hedera, abrdn is preparing for a future where investors buy and take custody of their tokenized assets and can trade across multiple platforms.

For fans of real-world asset tokenisation, the good news is that 2023 was just a precursor to what’s to come in on-chain finance. With many asset managers more progressed in their blockchain projects, 2024 promises to be an exciting year for tokenization

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The Great Onboarding: US Government Anchors Global Economy into Web3 via Pyth Network

For years, the crypto world speculated that the next major cycle would be driven by institutional adoption, with Wall Street finally legitimizing Bitcoin through vehicles like ETFs. While that prediction has indeed materialized, a recent development signifies a far more profound integration of Web3 into the global economic fabric, moving beyond mere financial products to the very infrastructure of data itself. The U.S. government has taken a monumental step, cementing Web3's role as a foundational layer for modern data distribution. This door, once opened, is poised to remain so indefinitely.

The U.S. Department of Commerce has officially partnered with leading blockchain oracle providers, Pyth Network and Chainlink, to distribute critical official economic data directly on-chain. This initiative marks a historic shift, bringing immutable, transparent, and auditable data from the federal government itself onto decentralized networks. This is not just a technological upgrade; it's a strategic move to enhance data accuracy, transparency, and accessibility for a global audience.

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🔗 Crypto Donations👇
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US Dept of Commerce to publish GDP data on blockchain

On Tuesday during a televised White House cabinet meeting, Commerce Secretary Howard Lutnick announced the intention to publish GDP statistics on blockchains. Today Chainlink and Pyth said they were selected as the decentralized oracles to distribute the data.

Lutnick said, “The Department of Commerce is going to start issuing its statistics on the blockchain because you are the crypto President. And we are going to put out GDP on the blockchain, so people can use the blockchain for data distribution. And then we’re going to make that available to the entire government. So, all of you can do it. We’re just ironing out all the details.”

The data includes Real GDP and the PCE Price Index, which reflects changes in the prices of domestic consumer goods and services. The statistics are released monthly and quarterly. The biggest initial use will likely be by on-chain prediction markets. But as more data comes online, such as broader inflation data or interest rates from the Federal Reserve, it could be used to automate various financial instruments. Apart from using the data in smart contracts, sources of tamperproof data 👉will become increasingly important for generative AI.

While it would be possible to procure the data from third parties, it is always ideal to get it from the source to ensure its accuracy. Getting data directly from government sources makes it tamperproof, provided the original data feed has not been manipulated before it reaches the oracle.

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If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
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🔗 Crypto
XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

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List Of Cardano Wallets

Well-known and actively maintained wallets supporting the Cardano Blockchain are EternlTyphonVesprYoroiLaceADAliteNuFiDaedalusGeroLodeWalletCoin WalletADAWalletAtomicGem WalletTrust and Exodus.

Note that in case of issues, usually only queries relating to official wallets can be answered in Cardano groups across telegram/forum. You may need to consult with specific wallet support teams for third party wallets.

Tips

  • Its is important to ensure that you're in sole control of your wallet keys, and that the keys used can be restored via alternate wallet providers if a particular one is non-functional. Hence, put extra attention to Non-Custodial and Compatibility fields.
  • The score column below is strictly a count of checks against each feature listed, the impact of specific feature (and thus, score) is up to reader's descretion.
  • The table represents current state on mainnet network, any future roadmap activities are out-of-scope.
  • Info on individual fields can be found towards the end of the page.
  • Any field that shows partial support (eg: open-source field) does not score the point for that field.

Brief info on fields above

  • Non-Custodial: are wallets where payment as well as stake keys are not shared/reused by wallet provider, and funds can be transparently verified on explorer
  • Compatibility: If the wallet mnemonics/keys can easily (for non-technical user) be used outside of specific wallet provider in major other wallets
  • Stake Control: Freedom to elect stake pool for user to delegate to (in user-friendly way)
  • Transparent Support: Easy approachability of a public interactive - eg: discord/telegram - group (with non-anonymous users) who can help out with support. Twitter/Email supports do not count for a check
  • Voting: Ability to participate in Catalyst voting process
  • Hardware Wallet: Integration with atleast Ledger Nano device
  • Native Assets: Ability to view native assets that belong to wallet
  • dApp Integration: Ability to interact with dApps
  • Stability: represents whether there have been large number of users reporting missing tokens/balance due to wallet backend being out of sync
  • Testnets Support: Ability to easily (for end-user) open wallets in atleast one of the cardano testnet networks
  • Custom Backend Support: Ability to elect a custom backend URL for selecting alternate way to submit transactions transactions created on client machines
  • Single/Multi Address Mode: Ability to use/import Single as well as Multiple Address modes for a wallet
  • Mobile App: Availability on atleast one of the popular mobile platforms
  • Desktop (app,extension,web): Ways to open wallet app on desktop PCs
  • Open Source: Whether the complete wallet (all components) are open source and can be run independently.

Source

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If you find value in my content, consider showing your support via:

💳 PayPal: 
1) Simply scan the QR code below 📲
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🔗 Crypto
XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

 

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