ACTUS Protocol — Roundup #1

Since our inaugural post, we have been very busy to deliver on our promise to lay the foundation for an open, interoperable and frictionless financial ecosystem. With this post, we’d like to give you a quick roundup of what we have achieved so far and been working on.

🛠 Implementation & Proof of Concept

• The first version of ACTUS Protocol is deployed on testnet. The smart contract system supports the issuance, tokenization, and servicing of financial assets. We have implemented the first ACTUS contract type — the principal at maturity — which allows issuing most kind of fixed-rate debt instruments by parametrizing our contract template. As a next step, we will additional contract types to support financial instruments like annuities, variable rate loans and swaps out-of-the-box.
• We are building the ACTUS Protocol Portal to demonstrate the capabilities of the protocol. It provides users with an intuitive web-application through which the ACTUS Protocol can be explored, assets issued, tokenized and serviced. We already use it for demos and it will be made available to the public soon. Please watch the atpar blog and our twitter to get notified.
• Issuing securities with ACTUS Protocol: We’ve integrated the ACTUS Protocol with Polymath. That is an important step towards being able to issue any kind of financial instrument in a compliant way on Ethereum.
• PoC with a lending platform: Swisspeers is testing our smart contract system to issue and service loans on Ethereum. It’s great to have real-world applications interact with our protocol and give us valuable market feedback.

Preview of the ACTUS Protocol Portal

🌈 Open-source contributions

• We published ACTUS-Solidity a Solidity implementation of ACTUS contract types. We love the open finance movement and we want to contribute to it to bootstrap the next financial infrastructure. Thus, we started to open-source key parts of the ACTUS Protocol Ethereum implementation. Find out more in our Medium post on that topic.
• The Funds Distribution Token is an important element for financial products that imply future cash flows such as bonds, annuities, futures, interest-rate swaps, and many more. We have created a proposal for an extension to ERC20 tokens that allows representing future rights in any type of crypto cash flow and allows token holders to efficiently withdraw their share. The funds distribution standard is a work in process done in cooperation with the creators of EIP1726 and the product of merging with our earlier proposal EIP1843.

👀 Industry feedback

• Joseph Lubin, founder of ConsenSys AG, recognized the ACTUS Protocol as integral to a fluid financial system. See his Ethereal keynote and the video from the Fluidity Summit 2019.

Retrospective “Ethereal Keynote 2047" from Ethereal Summit 2019 in New York

“Through the ACTUS standard and the ACTUS Financial Protocol — the HTML and HTTP of the Financial Web — enterprises began to overcome the walled gardens inefficiencies of the previous decades.”

Joseph Lubin, from his retrospective speech looking back from the year 2047, held at Ethereal in 2019.

• Banking experts from Swisscom, the main operator of banking systems in Switzerland, have examined our approach and concluded:

“By applying a common standard for financial contracts like the ACTUS protocol high interoperability between the actors can be achieved and a new unified financial infrastructure provided. A frictionless, scalable infrastructure that builds the foundation for the digital future of the financial industry.”

Roman Stössel, Head Front Products Banking at Swisscom. “Smart Contracts in the Financial Industry”, 2019.

👀 Market Feedback

All the interactions with various partners and potential customers helped us to sharpen the value proposition of the ACTUS Protocol for issuers and issuance solutions providers. These were the four things they liked the most:

• Automated and frictionless post-issuance management: The ACTUS Protocol assets deliver all the necessary banking-grade logic and data in a machine-readable form to truly automate the servicing, accounting, tax, treasury, risk management and analytics. This is the necessary foundation to enable straight-through processing and a seamless end-to-end lifecycle.
• Composable asset structures: the possibility to create flexible SPV-like structures with our assets on chain and reduce the management costs. The ACTUS Protocol allows tokenizing the future claims of any financial asset giving token holders access to their fraction of the claims scheduled by the asset. These claims can then be fractionalized, pooled and pools or tranches thereof tokenized again to represent a fund that is capable to directly route cash flows to ultimate beneficiaries.
• Jumpstart without reinventing the wheel: having all kinds of banking-grade financial instruments at your fingertips and being able to issue security tokens such as loans, bonds, derivatives by just parametrizing the ACTUS Protocol templates. It takes the burden of each issuer to code, maintain and audit financial assets and its logic.
• Open ecosystem approach: being able to share and leverage tools like asset browsers, analytics solutions and wallet/portfolio solutions for financial assets across issuers. An underlying open, consistent and comprehensive financial standard like ACTUS lays the foundation to deliver on this promise of an interoperable and frictionless financial ecosystem. A partner nailed it with his remark when we outlined to him the breadth and depth of ACTUS: “Why should we start from scratch when we have such a viable starting point?”

✍️ We have written several articles

• Article about digital asset identifiers in multi-chain and forking scenarios: How to address things on blockchains (Johannes Pfeffer)
• Basics article “Tokenization und Blockchain” published in Money today, in German (Johannes Pfeffer)
• Started a series about The Future of Security Tokens (Part 1) (Nils Bundi)
• Introduction about the tokenization of financial markets (in German) (Nils Bundi)
• Scalable architecture for Big Data financial analytics: user-defined functions vs. SQL, Springer Open (Nils Bundi, et al.)

✈️ Conferences and accelerators

• Crypto Asset Conference, February 2019
• We’ve won an Innosuisse coaching grant, May 2019
• Ethereal, May 2019
• Swiss Legal Tech Meetup, June 2019
• FutureSAX, June 2019

In the first half of this year, we have built out the foundational parts of the ACTUS Protocol and have validated our concept in PoCs together with various players. Now, we are looking forward to bringing our MVP to mainnet in the second half of the year and integrate it into the first solutions. Please contact us if you are interested to leverage the ACTUS Protocol for your issuance solution.

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Acknowledgments: Thank you to the entire atpar-team for this great first 6 months and also to all the people with whom we had the pleasure to collaborate – an incredible inspiring space.