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Recap of AMA with AllianceBlock

On the 29th of July 2021 @ 11:00 AM ET, An AMA session was held on Avalanche Telegram with special guest @AjajaRachid Co-Founders of
@allianceblock. Below we present to you an excerpt from AMA with questions and answers. It was wonderful and very informative, Enjoy reading :)

Nicolas | Avalanche

Thanks and welcome to the Avalanche AMA with AllianceBlock. Today’s AMA will feature Rachid Ajaja, CEO at AllianceBlock

For this AMA, we will follow this schedule:
11:00AM to 11:30AM: Channel is open for Twitter questions (channel muted)
11:30AM to 11:35AM: Channel is open for Telegram questions (channel in slow mode 1 min)
11:35AM to 12:00PM: Rachid answers questions (channel muted)

Welcome @Agorajix !

Rachid Ajaja | Alliance Block

Thank you guys for having me, very excited to be here

Nicolas | Avalanche

It’s great to have you here :) Before we dive into the questions could you shortly introduce yourself and provide some background on how you founded AllianceBlock ?

Rachid Ajaja | Alliance Block

My name is Rachid Ajaja, I worked 12+ years in investment banking as A Quantitative Analyst in various investment banks including Barclays and BNP Paribas. I also led the AI research team at VINCI in France. and started the Adventure of AllianceBlock with my cofounder Matthijs back in 2018 and then Amber joined us as cofounder also

Matthijs started out as a software developer at a young age and eventually became a manager at PostNL to lead several departments in enterprise product development before discovering crypto.

Amber Ghaddar has extensive experience in investment banking, she worked at Goldman Sachs and JP Morgan. She was also a speaker in multiple conferences, including TEDx.

At AllianceBlock, we are bridging the gap between decentralized finance (DeFi) and traditional finance (TradFi), by remedying issues that exist in both spheres and linking them more closely together. We see the future of finance as an integrated system in which the best of both worlds can work together to increase capital flows and technological innovation.

We are building this future by bridging traditional finance with compliant, data-driven access to new decentralized markets, DeFi projects and ecosystem-scaling tools such as funding and interoperability. As such, we are building a next-generation financial infrastructure that aims to provide regulated financial entities around the world with the tools they need to seamlessly access the DeFi space.

This summerize what is AllianceBlock :)

next :)

Nicolas | Avalanche

Excellent thank you for this introduction Rachid ! Okay let’s get started with the questions from Twitter

Our first question comes from LuisaLbertoLv: What are the achievements of your project so far and what do you hope to achieve with the integration with Avalanche?

Rachid Ajaja | Alliance Block

The last 6 months were really amazing in terms of achievements; not only in terms of product development but also in terms of team growth, partnership, ecosystem and more. As you may have seen in our last AMA (https://www.youtube.com/watch?v=e67I8YJ-3QE), we introduced the 9 new C-level members of the team that joined us this summer. They have a very extensive background in finance, investment banking, core banking systems, quantitative finance and more. We have also grown our full-time team to 20 - these include developers, engineers, architects, UX/UI; project managers and owners. We also have 40+ dev contractors around the world.

In terms of product releases, we have successfully released our Liquidity Mining as a Service (https://lm.allianceblock.io/). With this product, we help DeFi project focus on their core tech and without any line of code launch a fully functional platform that offers liquidity mining, staking and analytics, that is very secure and fully audited. Uniswap and Balancer on Ethereum, PancakeSwap on BSC are supported and very soon Pangolin on Ava will be supported which means all our clients will be able to launch pools on Pangolin very easily and bring more users to AVAX

We have also released our AllianceBridge (https://alliancebridge.io/) that is very unique in the space as it’s fully decentralized and supports AVAX, Polygon, BSC and Ethereum. We are working to integrate more chains and this will help to unify the fragmented blockchain space. We have the ambition to make this bridge a universal bridge.

We also released our Data Tunnel (https://allianceblock.io/datatunnel/)l on Testnet and we are working on the next release to have it on Mainnet. We will implement NFTs on the data set which will bring royaltees to each data owner. We like to think of the Data Tunnel as the ‘Netflix of Data.’

We are working on many other products that will be released very soon and we are very excited.

Nicolas | Avalanche

Wow a lot of exciting and important stuff! Congratulations! Second question is asked by emcs1974: One of AllianceBlock’s main goals is to achieve the sustainability of the crypto industry through common adoption. What do you believe are the main barriers to this currently?

Rachid Ajaja | Alliance Block

yes indeed many things happening and it s very exciting

The main barriers are first, interoperability between chains and compliance and regulation. Although it’s a sensitive subject when we speak about compliance and regulation, I do believe that this is very important to bring DeFi mainstream

We believe there is a compromise and it’s about giving the user a choice to expose or not expose their data when they do, for their KYC for example; thanks to this, the users will always be in control. Regulation is coming to DeFi and some of you may know there are the FATF rules that will start to be implemented, although, from our discussions with our lawyers we know that will take time to be put into place, we want to be a driver and propose innovative solutions that bring compliance to the space without forcing users to comply to them. If users don’t want to comply, they will not have access to some of the features, so everyone will have the choice.

I believe DeFi is the new TradFi, it will take time, but making the space more interoperable, and having the Regulatory and compliance layer, will make DeFi mainstream and we will see a huge flow of money from traditional finance to DeFi, not only the flow of money but also the possibility of upgrading the legacy systems of the banks with this technology, this is only matter of time. We are at the right place at the right moment, and exactly the way we’ve seen the digital transformation in retail banking,

Of course there is also scalability, and many project are working on this including AVAX and they are doing amazing job and hence the rapid growth of the ecosystem in addition to the low fees that will help even more adoption

Nicolas | Avalanche

Third question comes from batuhanarslan_ he is asking: Avalanche is a really important system for DeFi projects. What do you think of the DeFi ecosystem on Avalanche?
What developments do you expect in the future?

Rachid Ajaja | Alliance Block

as we say in our community #NoMercy it s our motto

Nicolas | Avalanche

Haha love it

Rachid Ajaja | Alliance Block

Avalanche are doing an amazing job in the blockchain space, and building an awesome ecosystem. We see more and more projects deploying on Ava and this is a very good sign. Also from my experience, working with the Ava team is really amazing. The devs always answer super quickly and are here to help and this is a good sign to show that Ava are doing the right thing to attract good projects and build a big ecosystem in DeFi, without even mentioning the current work to lower transaction fees.

When we spoke about our collaboration, there was a big discussion about cross-border rules and compliance, and by merging forces we will make the ecosystem even bigger and also attract institutional investors and traditional players to use products built on AVAX in a fully compliant way.

We are very glad to have this collaboration and all the things that are coming in the near future. 🚀

Nicolas | Avalanche

Question 4 by tayfun76957090: What is the integration plan with AllianceBlock on Avalanche? Do you have any plans to create subnet on the Avalanche network?

Rachid Ajaja | Alliance Block

many many many :)

Nicolas | Avalanche

Music to my ears

Rachid Ajaja | Alliance Block

Our first integration was with the AllianceBridge, now you can bridge between Avalanche and Polygone, BSC and Ethereum very easily. As said above we will be also integrating Pangolin in our LMaaS (https://lm.allianceblock.io/). We are also finalising the Audit of our Fundrs protocol which is a fully decentralized p2p funding protocol with an innovative DAO and smart governance. We speak about funding as it will support both investment and lending, it will be a launchpad not only for crypto projects but also for traditional startups and will be deployed on multiple chains including Avalanche. There will be other use cases such as short term financing backed by collateral such as art, collectibles etc. We saw huge interest from private banks so they can propose it to their High Net Worth Individuals’ clients that are looking for short term financing. There will be many use cases, and we are very excited about this product as it will include many of our products that will interact between each other and they will be deployed on Avalanche

There is also AllianceDEX that will optimise Impermanent Loss more than 50% and we have build a complete new AMM, but we will give more information very soon ;) In the meantime, have a look at our blog for more info: https://blog.allianceblock.io/allianceblock-announces-launch-of-alliancedex-a-new-market-maker-eaca032bf2d9

Nicolas | Avalanche

Question 5 comes from huntsats: How will your pricing engine solve the problem of impermanent loss to liquidity providers? How will your risk anaylitics work?

Rachid Ajaja | Alliance Block

it’s a great quesiton, i would say even NoMercy question :)

First of all everyone need to know that Impermanent Loss is what make CFMM possible, as we can t have all the upside without the downside and this is how investment work, there is always a risk. No one can delete the risk completly but what we can do is minimize it

and first thank to our new AMM as said above we managed to optimize the IL for a given pool by more than 50% after doing backtesting and stress testing as you can see on the blog above.

Adding to this, we will release after the SSLP, single sided liquidity provisionning which will have also a positive impact on IL.

In addition, leveraging the LP token that can also be an NFT, it can be staked which can generate more yield and we will have smart algorithm that dynamically allocate these staked NFT to maximize the yield, this will optimise even more the IL.

Finally we will be implementing optimal control in our library that will give the opportunity to optimally enter a pool and exit a pool, split orders in a way to minimize the impact and much more.

Our objective is to bring the highest standard of Quantitative Finance to DeFi, I have been Quant for a while, and we are happy to have Houman our CRO which was the head of FX derivative at barclays and before that the head of commodities Exotics Quantitative team, and we have Mattheu PhD from oxford and ex FX quantitative. Thanks to this awesome team we are bringing cutting edge algorithm to have an impact on the current DeFi space and hence help users to optimally allocate their fund and have the least impact of IL

#NoMercy is the only way 🔥🚀

Nicolas | Avalanche

Thanks again for these detailled answers full of insights 💯

Question #6 by @alicancaliskan_: Hey alliance block when is there more room opening up for staking pools?

Rachid Ajaja | Alliance Block

my pleasure, and I am super glad to be here, I have been personnaly following AVAX since a while and a huge supporter, being able to be here, and answering to these awesome questions and in addition of our collaboration it s a big honour

to answer to the question, yes we will have many staking pool starting, including on AVAX and also liquidity mining pools on Pangolin; stay tuned ;)

Nicolas | Avalanche

Question #7 by huntsats: Can you explain more about how does your Trustless KYC works? And how are users still able to control their data through this?

Rachid Ajaja | Alliance Block

Trustless KYC is one of the most complex product we are building so far, it is very challeging technologically but we are very happy to say that phase 1 is done.

First of all we are building on top o fNucypher which is amazing in term of data encryption especially for personal data.

We have partnered with https://www.gbgplc.com/ which is one of the biggest KYC AML provider in the world, working with top financial institutions.

Normally project seeking investment like for launchpad, or for banks, they have to do kyc which can cost from 1 to 30 dollar depending of the complexity of the individual and they keep the data, for the launchpads imagine that one investor can do 10 KYC , there is huge potential of leak and there is no standard nor framework.

We have decided to change everything by letting the user do the KYC/AML and later more things, then the data is fully encrypted and the wallet will be signed to make sure the owner of the wallet is the owner of the data, then the data fully encrypted sent to GBG API, once data is checked and fully verified, the user receive a report, and a signed message, then everytime he want to invest, lend, or whatever, the project or bank will ask access to this data, sometimes a signed message is enough but sometimes having access to the underlying data is mandatory especially for financial institutions, here not only the project seeking investment for example will pay 60 to 80% less per kyc and know that it was performed by top instutions, but everytime the user give access to his data or send the signed message, the user will receive 50% that came from the project that pay for this KYC. The user then can choose to revoke access.

We will start our MVP with semi trustless and working closely with nucypher to have it fully trustless, we will later implement the signing message with AVAX, which will bring also huge adoption in our opnion

It s very excited subject and really happy to share it with you here :)

Nicolas | Avalanche

Question 8 by LuisaLbertoLv: What are the weaknesses of your project and what actions are you taking to overcome them?

Rachid Ajaja | Alliance Block

We have done all possible mistake when we started, from hiring the wrong people, building product without seing the right market fit and without clear strategy, after 2 years we learned the hard way, so when we pivoted our vision and we had this big ambition back in 2020, we had clear plan and what to do and what not to do.

We learned also that making mistakes it s not the most important, in a startup the most important is not being right or wrong but the ratio of the good decition over the bad decision need to be greater than 1.

Following this, we iterate fast, we build fast, we test fast, and we release fast.

I would say the big challenge is finding the right people, but thanks to the awesome network we built we managed to hire amazing people that are helping us to make our vision a reality, the problem is we always need talented developers and architect and it will be always a concern, this is why we sponsored a code academy and hired 10 junior dev that we are forming and always looking for talent. The journey is very long, and better have everything to make it at the end a successful journey

Nicolas | Avalanche

Question 9 by scientiaax: What is your top priorities in 2021? Could you share some plans for the upcoming year? Which part of the project are you most focused on right now?

Rachid Ajaja | Alliance Block

I would say everything we are doing is exciting because every single product we are building is part of the overall infrastructure that will be the foundation of finance 2.0.

Some of the exciting product that are coming soon are Fundrs protocol for the P2P funding as it will be fully decentralized it will integrate AllianceBridge, NFT funding, AllianceDEX and later on the trusless KYC and also help project to launch LMaaS in a click of a button. You can see that eventhouth every product can be used separately at the end it s like a lego game, you can put them together and have this infrastrucutre that will link traditional finance and DeFi

another product we are building and very excited to release is DataQuasar, an entreprise grade API that will not only aggregate defi data from multiple blockchain but also expose analytics, strategies and more and users will be able to use our data and strategies and use also our MLOps and datapipeline to build their own strategies.

We are glad to have strategic partnership with Databircks https://databricks.com/; the leader in data and AI they work with most of the biggest companies in the world, and I can say with absolut certainty that we will have one of the best architecture in term of data querying and Machine learning and deep learning.

Of course there is also AllianceDEX that is very important for us but also for the space, we saw many fork of uniswap and we wanted to show that we can have a different approach to AMM that can minimize the IL and hence attract mire Liquidity Providers.

As you can see lot of stuff, we wish a day had more than 24h but we do with what we have :) #nomercy

Nicolas | Avalanche

Last question comes ZaferZEYBEK2: What features does Alliance Block have that differs from its rivals?

Rachid Ajaja | Alliance Block

it will be very hard to speak about 1 features, as we have multiple product that are interconnected. Each of our product can be a company itself but we are bit crazy so we decided to build product where are our first users, because we haven t found them elsewhere.

The most important things is the compliance and regulatory layer from trustless kyc to cross border rules we think they are unique; also DataQuasar will be unique in the space the way we are building it, imagine the bloomberg or Refinitv of DeFi, there is also the way we have build our birdge, and also big focus on UX/UI tjhat will make us apart. Also we don t believe in competition but we believe in collaboration, blockchain space is amazing and there are so many amazing project, collaboration and partnership are keys to have more adoption

Nicolas | Avalanche

Thank you for answering these questions from Twitter @Agorajix ! We won’t have time to do the Telegram questions but we got excellent answers :)

Where can the community learn more about AllianceBlock Rachid ?

Rachid Ajaja | Alliance Block

I would love later on when we deploy our product on AVAX to do another AMA or livestream, really enjoyed being here

we are very active on TG and Twitter, you can join us here https://t.me/allianceblock

and follow us here https://twitter.com/allianceblock

we are very active and lot of news coming soon,

Nicolas | Avalanche

Exciting! Thank you so much for taking your time to answer these questions @Agorajix. It was great to have you here!

Rachid Ajaja | Alliance Block

thank you for having me, and thank you to all of AVAX awesome community, looking forward to our great collaboration 🔥

About AllianceBlock

AllianceBlock is building the first globally compliant decentralized capital market. The AllianceBlock Protocol is a decentralized, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product. Incubated by three of Europe’s most prestigious incubators: Station F, L39, and Kickstart Innovation in Zurich, and led by a heavily experienced team of ex-JP Morgan, Barclays, BNP Paribas, Goldman Sachs investment bankers and quants, AllianceBlock is on the path to disrupt the $100 trillion securities market with its state-of-the-art and globally compliant decentralized capital market. For more information, visit: https://www.allianceblock.io/ Medium: https://uniftyio.medium.com/

About Avalanche

Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is the first decentralized smart contracts platform built for the scale of global finance, with near-instant transaction finality. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box.

Website | Whitepapers | Twitter | Discord | GitHub | Documentation | Forum | Avalanche-X | Telegram | Clubhouse | Facebook | LinkedIn | Reddit | YouTube

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