DeFi Network for Wealth Management

#Blockchain
#Corda
#FinTech
#R&D

Business Challenge

With an utmost understanding of the crypto investment sector complexity, our client, Bastion Cooperative, aims to create a fully transparent network (“Network”), introducing the digital assets market to traditional wealth managers primarily in the EU with a perspective to expand to other geographic areas going forward.

One of the biggest issues is organizing the Network operations in full compliance with the laws of the countries where the advisors and investors operate. This, in addition to the huge number of integrations required for the Network to operate efficiently, particularly those with crypto trading and custody solutions, anti-money laundering (AML) tools, and highly secure communications, makes achieving full compliance a complex task.

Solution Overview

The initial stage of development required us to start with comprehensive Research & Development activities. In doing this, we have considered several scenarios to ensure that an optimal product will be developed.

Taking an R&D-focused approach allowed us to build thorough and detailed project specifications, mitigate risks, and complete the first stage of the project on time without extra costs. We are currently implementing the second stage of the project.

The solution includes several workflows essential for the Network to achieve its goals.

These workflows are:

Introducing new investors to the Network, including the investors’ self-classification and connecting them with the advisors.
Integrating prospecting and content management tools.
Establishing highly-secure communications between the Network participants.
Signing agreements (e.g., a crypto advisory mandate) between all the interested parties using blockchain mechanisms.
Enabling investors to instantiate non-custodial wallets secured through multi-party computation (MPC) through the Network.
Integrating solutions to allow the investors and their professional advisors to manage crypto assets through the Network.
Reviewing asset allocations and investment portfolios.
Continuously monitoring transactions with 3rd party AML tools, including protecting the Network participants from dealing with crypto assets coming from suspicious origins.

On top of these workflows, other important features of the Network include:

Anonymization of the investors’ personas for Network participants.
Strong data integrity based on storing all the meaningful documents and events on the immutable ledger. Since the Network is built on an enterprise-grade private blockchain, all the contracts, agreements, and documents can’t be forged, altered, or deleted.

A Network user can perform one of the following three roles:

Investor — an individual or a small company (e.g., family office). An Investor can choose between advised and self-directed investment portfolio options.
Advisor — a financial professional, providing the Investors with the necessary infrastructure (private blockchain nodes, personal website, technical support) and investment advice (for managed accounts) on a commercial basis.
Operator — mainly a system administrator responsible for the monitoring, Network configuration, maintenance, and support.

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Technological Details

For the backend development of the Network, we used Kotlin, and for the frontend — Angular. Element.io was chosen as a safe and secure messenger with all the necessary tools to support user collaboration.

Through extensive research, we chose Corda for the blockchain development from more than a dozen competitors based on several parameters. We also used Corda 5.0 due to several upgrades that let us provide easy implementation with the optimized flow and add virtual nodes.

The Safeheron non-custodial MPC wallet is offered to the Investors, while the Advisors will use Qredo’s non-custodial MPC solution for crypto asset management as it combines the cryptographic security with its own risk-reducing and capital- and cost-efficient Layer 2 blockchain trading network. For AML checking, the Network deploys the Coinfirm AML Oracle solution.