The Akropolis project subscribes and builds towards achieving the Web 3.0 vision, working on contributing to create an alternative financial infrastructure, designed to help people claim back and be the masters of their future financial security without reliance on banks, governments, or financial institutions.
Akropolis’ solution is designed to provide a robust alternative in the event of a large-scale financial crisis and a wide institutional collapse, involving a run on banks, consequent retracement of depositor protection schemes, bankruptcy of pension funds, and rising inflation eroding private savings as a result of multiple rounds of quantitative easing.
The Akropolis protocol is designed to enable free, quick and easy set up, management, and cross-exchange of value and data between informal or natively digital financial organizations be they community groups, co-operatives, or DAOs. In short, people can save, insure, issue credit without reliance on banks or financial institutions. Along with these features, the users get de-facto transparency and fairer funds distribution facilitated by the technology.
What are we currently doing on Polkadot?
- Launching the Akropolis parachain.
- Running a Validator Node on Alexander testnet.
- The team is currently researching application of zk-znarks and LayerX to ensure privacy of financial transactions within the parachain.
- We are actively participating in Polkadot ecosystem — you can check one of our proposals — Polkahub, a platform for easy node deployment.
What is our product composed of?
The architecture of our protocol, as a TCP/IP construction, is structured in several layers, each of which is responsible for a separate function. You can find more about each module on our wiki.
Currently, our payment processing kernel (C2FC) is deployed on our parachain on Substrate.
What is C2FC?
Any financial transaction can be abstracted as an exchange of cashflows. This is why we created a financial primitive called “Commitments to Future Cashflows” or “C2FC” that reduces the complexity of the protocol design by encapsulating in a single token smart contract
- a seamless transfer, exchange, batching or trading of cashflows
- an ability to be linked to and emitted by any economic agent
C2FC processes subscriptions to and redemptions of capital while maintaining an immutable trail of payments. This cashflow-based approach allows to build core financial products with near-infinite variability:
- Investment products (saving accounts, pension accounts)
- Credit products (revenue-collateralized / income-collateralized loans)
- Social credit / group savings / social or mutual insurance
Below is a description of our Polkadot implementation.
Polkadot is often described as “internet of blockchains” and can be presented as an airport with parachains aka gates. Gates are interconnected between each other so this airport hub creates connectivity between different destinations:
This clear analogy can be applied to blockchains, interconnected by Polkadot. The novel crypto-financial primitive C2FC that was recently developed will provide a powerful financial tool for all “airlines,” renting gates. We can imagine it as something like“inter-airline ticket purchase and exchange system”. This means that all Dapps and networks, based on blockchains, interconnected via Polkadot can use C2FC to create, account, transfer and aggregate debts. This amplifies Polkadot’s network effect and simplifies the creation of financial applications (the majority of known finance products are related somehow to debts — which can be created using C2FC framework). Additionally, this interoperable tool, built on Polkadot makes a contribution to the overall value of Polkadot ecosystem. As a consequence, the value captured by DOT tokens will become greater.
We believe the future will contain multiple domain-specific blockchains. Our product vision assumes a blockchain-agnostic ruleset, able to interact with any cryptoasset running on any blockchain. Interoperability becomes important for the medium-term product vision. With this in mind, Akropolis has turned towards exploring Polkadot and its ecosystem.
Cross-chain functionality afforded by Polkadot will be able to offer ecosystem-wide access, exchange and trading of cashflow-based products and services on our parachain. By way of illustration, let’s consider two simple scenarios below:
- Illustrative Scenario A: Societe Generale has issued a EUR100 million covered bond on a public Ethereum blockchain. A Chinese conglomerate issued a RMB250 million sovereign bond on NEO. As an asset manager / treasurer of a mutual/DAO, you will be able to manage a portfolio of assets from multiple chains. Bond’s coupon payments are routed through a set of Polkadot bridges to mutual/DAO, governed on Polkadot.
- Illustrative Scenario B: Clearbanc has an existing validated business model which in due course can be ported on-chain. Imagine that different businesses are built on different open-source protocols: DEXes, Ad Networks, Data Marketplaces. C2FC provides the opportunity to finance such businesses without selling a share. The implementation of C2FC on Polkadot provides shared liquidity for fundraising as well as 0x — shared liquidity for exchanges.
Akropolis chain consists of several services, including:
- Registrar: This public-facing service contains all the business logic and external functions associated with creating, issuing and redeeming C2FC. The Registrar orchestrates interactions between other services. The Registrar stores all issued C2FCs.
- Factory: This service contains the template for a specific type of C2FC and facilitates the creation of all C2FC tokens. Creators can mint C2FC tokens by calling the Registrar’s create function and supplying the Factory address and required parameters.
- C2FC Token: This token represents a unique Commitment to future cashflows. Each C2FC token is created by a Factory and is tracked by the Registrar. The C2FC token keeps track of all transactions under commitments.
The flow is formalized as follows:
- Issuer sends command to Registrar to issue new C2FC token.
- Registrar passes arguments to Factory to issue new token.
- Factory deploys new C2FC token with provided parameters.
- Factory returns to Registrar the new C2FC id.
- Registrar records C2FC id in it’s mapping of all tracked C2FCs.
- Registrar returns to issuer id of new C2FC token.
Challenges & Solutions
One of the main problems we encountered when designing the AkropolisChain is the lack of testing tools that allowed both dapp/chain integration and unit tests. It would be great to have tools like Truffle or Ganache for efficient development flow. Thanks to Web3 Foundation, which already are working on it: W3F recently allocated a grant for the ChainHammer project, for benchmarking and performance testing. We are very pleased to look how quickly and actively the ecosystem of Polkadot is developing and how quickly new missing elements of the ecosystem appear. Our team is also actively involved in the development of the ecosystem. Here is our proposal — develop PolkaHub: PaaS with one-click services for deploying and running different parachain nodes. Other suggestions are:
1. Develop tools for unit and integration testing dApps built on Polkadot/Substrate.
2. Develop tools for measuring dapp/chain performance. Looking forward to MixBytes Tank.
Akropolis Next Steps
- Add staking functionality (collateral), once C2FC is settled, the staked tokens are released (this helps build skin-in-the-game).
- Become an active contributor to the Polkadot core tech: the Polkadot ecosystem is at a very early stage, needing basic tools and infrastructure apps: Infura analogs, browser, and mobile wallets, testing tools.
We firmly believe that building more tools for Polkadot will subsequently bring in more developers. This will result in more products built, enabling other developers to be onboarded to the Polkadot ecosystem.
We are committed to continuing the research and development in Polkadot and look forward to generating wider accessibility for new developers, and ecosystem expansion. We hope you enjoyed the first part of our series “Akropolis in Polkadot” — stay tuned for more!