Craig Blitz: Chief Product Officer at Digital Asset Reveals that Goldman Sachs Is Using Daml 2.0 for its Initiatives

We recently connected with Craig Blitz, Chief Product Officer at Digital Asset, which is building the platform, developer tools, and leveraging the best modern infrastructure providers “to change how businesses interact.”

Digital Asset (the company) is the creator of the Daml multi-party application platform.

Our conversation with Craig Blitz is shared below.

Crowdfund Insider: Please tell us a bit about Digital Asset and the challenges the company looks to address.

Craig Blitz: Digital Asset was established in 2014, with the goal of filling a gap in the blockchain space, taking blockchain technology beyond cryptocurrencies and using it to bring greater efficiency and modernization to financial services. While advances in blockchain have progressed over the years, privacy and interoperability concerns remain a major roadblock to adoption, bringing along with it additional challenges that are creating more data synchronization issues to the ones that exist today.

Our most recent launch, Daml 2.0, addresses some of these critical gaps by using smart contracts with a new privacy-enabled distributed ledger. The new ledger preserves each participant’s privacy while enabling safe and atomic exchange of assets and authorized data between multiple businesses.

Crowdfund Insider: How does this differ from privacy offered by other blockchain-based solutions?

Craig Blitz: Public blockchains offer pseudonymity which isn’t the same as privacy. The focus there was on creating a platform that could synchronize and distribute data (ledger transactions & state) without any central operator (decentralized trust). This is achieved by giving everyone visibility into data and transactions which naturally leads to privacy concerns.

Public chains attempt to address this issue with a layering approach to add privacy through additional technologies such as ZKP or Roll-up ZKP off the chain. But this not only complicates the implementation, but also further reduces the already low scalability and speed seen with public chains making them unfeasible for real-world and real-time financial services use cases. This is expected to improve in the future, but the general consensus is most of these operations need to happen off-chain to ensure speed and scalability.

Permissioned or private blockchains don’t have the same type of privacy issue as they don’t open up the ledger and transactions to everyone but rather only to authorized users (and thus creating bigger silos). However, this still doesn’t guarantee sub-transaction privacy. with other permissioned chains, all the participants who participate in a transaction will still be able to see all elements of that transaction.

This is not acceptable in many situations (e.g. healthcare transactions involving a bank, an insurer, and a patient). Any attempt to resolve this at the application layer only leads to additional programming and design burden that further complicates the implementation.

Crowdfund Insider: What is Daml 2.0 and how has it improved on the previous iteration?

Craig Blitz: Daml 2.0 is the newest version of Digital Asset’s multi-party application platform that now includes Canton, a privacy-enabled ledger that is enhanced when deployed with complementary blockchains. This added privacy framework is the first-of-its-kind helping make DLT more feasible for clients. None of the existing blockchains have architecture that can handle keeping sensitive information private with the scalability necessary to connect the world’s assets.

Crowdfund Insider: What are the primary industry challenges Daml 2.0 aims to solve?

Craig Blitz: Sub-transaction privacy and interoperability are two key challenges worth noting. The lack of privacy protections has kept blockchain development in financial services from truly spreading its wings. Most blockchain projects in global markets are siloed within an internal ecosystem, and developers and technology leaders are hamstrung, unable to effectively scale their projects across their businesses or across markets.

When it comes to interoperability, there is a wide variety of blockchains and traditional infrastructure in place, and users should be able to employ the technology that best suits their technical and operational needs. Using Daml with Canton, businesses can build applications for Daml-enabled databases or ledgers, connect applications across ledgers, and port applications from one ledger to another — all while maintaining data privacy and consistency.

In short, Daml with Canton adds real privacy against the ledger operator, enabling even stronger fault tolerances while simultaneously synchronizing transactions across any supported blockchain or database. For example, a Daml asset can be safely delivered on one blockchain platform e.g., Hyperledger Besu while the payment can be made using a different Daml asset on a different platform, e.g. Hyperledger Fabric, in a single, atomic transaction.

Crowdfund Insider: What problems were previously created by a lack of privacy?

Craig Blitz: The lack of privacy and sovereignty is driving enterprise blockchain users into walled-garden installs – essentially blockchain infrastructure siloed from the rest of an organization’s infrastructure and therefore of limited value and reach. While walled-garden ecosystems provide some value, they miss the true-tail ROI on a blockchain.

With existing blockchain technology, when you create a large transaction spanning these walled gardens, each node required to process that transaction sees all the data of the transaction. This model means you cannot create distributed atomic business transactions that match your business model without sacrificing privacy.

This issue prevents organizations from achieving the real ROI from blockchain initiatives and undercuts the value and intent of blockchain altogether. However, with Canton, privacy is managed at a sub-transaction level, so only parties to the transaction can see all the steps – meaning network participants can only see data that is relevant and permissioned to their role in a particular transaction — not everything that occurs previously or after, ensuring privacy is never compromised.

Crowdfund Insider: Is this new solution already in use in the field?

Craig Blitz: Yes, both Goldman Sachs and Deutsche Börse are using Daml 2.0 for individual initiatives. Goldman Sachs has been relying on Daml to develop the institution’s end-to-end tokenized asset infrastructure, supporting the entire digital life cycle across multiple asset classes on permissioned and public blockchains.

Deutsche Börse is integrating Daml into its D7 platform in order to create and process digital instruments, the digital description of electronic securities, to manage the securities alongside the entire value chain – thus helping the company realize its goal of a fully digital post-trade platform that empowers financial institutions to issue electronic securities.

Crowdfund Insider: How is Daml a part of Digital Asset’s plans for the future?

Craig Blitz: The evolution of Daml is just one of the important milestones keeping us at the forefront of blockchain interoperability development. We’ve made significant progress with a number of different firms across the globe that rely on our technology for a multitude of unique use cases.

For instance, we’ve helped Xpansiv incorporate Daml into their architecture to allow the company to ensure an immutable record of production and ESG data for the entire lifecycle of a digital commodity, enabling ESG-minded consumers to procure assets with confidence and helping to drive liquidity to the global market. Similarly, in Hong Kong, we’ve helped the BIS Innovation Hub create Green Bonds thanks to the application of Daml.

These global relationships we’ve built showcase both just how critical it is, and how eager companies are to be able to have access to interoperable blockchains that better and more efficiently serve their business. Once connected with each other, these firms will understand the true value of the Global Economic Network (GEN).

Crowdfund Insider: What does the Global Economic Network encompass?

Craig Blitz: The Global Economic Network is built on three pillars: An application is discoverable by anyone in the network, users once again become owners of their data, and an app is embedded in the broader ecosystem. By ensuring accessibility and ownership, applications are able to work with one another, and can be built on top of one another for the purpose of innovation, while simultaneously ensuring users have control over their own assets.

This true level of interoperability will help institutions and enterprises spend more time on product innovation, grow operational efficiencies, and cut costs, all while unlocking economic value and expanding the boundaries of collaboration.

All of this work has been made with the goal in mind of interconnecting and allowing blockchains to work together, rather than forcing each unique application into its own siloed system. Replacing existing legacy systems with a siloed blockchain will not solve the problems the market faces today. All of the existing groundwork we’ve put into place to make networks more interoperable will eventually culminate in a true global economy.

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