How Norway Is Using Ethereum (Arbitrum) for Shareholder Management

The Norwegian Government has announced the development of BRØK, a cap tables platform for unlisted companies on the public Ethereum network. With BRØK, you can easily share and update your company’s shareholder information using blockchain technology, making the process faster, more efficient, and more secure.

This platform, which is natively on the Arbitrum layer 2 scaling solution, will use the ERC1400 standard to represent shares and the Ceramic network to comply with the EU’s privacy regulation GDPR.

BRØK Moves into Testing Stage — Demo and SDK Now Available

This platform was announced in 2022, but we are now thrilled to see it move into its next testing stage and excited to see the documentation, SDK, and demo now available. This is a significant step forward for public Ethereum, and we can’t wait to see what the future holds for this innovative technology.

Currently, around 380,000 private companies in Norway maintain their own registers of shareholders, known as a cap table. This information is considered public and must be made available to anyone who requests it. However, there currently needs to be an easy way to share this information digitally.

Introducing BRØK: A Solution for Sharing Shareholder Information on the Blockchain

BRØK is a solution for publishing shareholder information on the blockchain. This will allow other service providers, financial institutions, the press, and public agencies to access and view this information efficiently. BRØK will support a range of user scenarios, including publishing information about shareholders, transferring shares, and publishing information about share assignments and deletions in connection with corporate events.

BRØK: A Single, Trusted Source of Truth for Shareholder Data

But BRØK isn’t just about sharing information — it’s also about establishing a single, trusted source of truth that different systems can rely on. By combining data from three sources — the blockchain, an open database, and specialized systems — BRØK will create a unique ecosystem of interconnected shareholder registers.

The platform enables the publishing of the following:
- transfer of shares
- mortgage on shares
- information about a shareholder
- deletion of information about a shareholder (GDPR)
- change in the number of shares from corporate actions like changes in capital, split and merge

In BRØK, each company has its own listing on the blockchain, completely separate from other companies. This listing includes information about the number of shares in different classes of shares, with an anonymized address pointing to the owner. The blockchain also holds the rules or business logic. These rules describe who can publish and change ownership information. In the sandbox version of BRØK, only specialized systems can write to the blockchain. Whenever there is a change in the information published, this is recorded with a timestamp and the corresponding signature from the specialized system that made the change. In the infrastructure model, the information on the blockchain is marked in red, and the anonymous pointer in purple.

It is not possible to delete revision trails on a blockchain. In practice, the information is mirrored by hundreds or thousands of nodes that together make up the network. BRØK does not store identifiable personal information on the blockchain but in an open distributed database structure (Ceramic), where it is possible to correct or delete data.

The structure of BRØK is such that it will, in the future, allow for value-adding services to be established based on the ownership information published on BRØK. Using composability BRØK, it will be possible to build interconnected services based on the solution in the future. How BRØK will develop is essentially up to the systems and users.

About Arbitrum

One key concern was minimizing transaction costs, also known as “gas” on the Ethereum network. After careful consideration, it was decided to use the Arbitrum layer 2 scaling solution to address these issues. Arbitrum is a scalable, secure, and reliable layer 2 solution that enables faster transaction speeds and lower gas costs compared to the main Ethereum chain. It was the perfect fit for our needs on the BRØK platform.

In the following posts, we will delve deeper into the specifics of Arbitrum and how it has helped us to improve the BRØK experience for our users. Stay tuned for more updates on this exciting technology.

About ERC1400

The company’s stock is represented on the platform using the ERC1400 standard. The implementation of this standard utilized by the platform is ConsenSys’ Universal Tokens, which can be found at the following link: https://github.com/ConsenSys/UniversalToken.

ERC1400 is a token standard designed to represent tokenized financial assets on the Ethereum blockchain. It is compatible with most Ethereum tools and platforms due to its retroactive compatibility with the ERC20 token standard. ERC1400 allows issuers to set up substantial control over token transfers by attaching data to transfers and performing granular certificate checks. Overall, ERC1400 is a valuable tool for representing tokenized financial assets on the Ethereum blockchain while remaining compliant with regulatory constraints.

About the SDK

With this SDK, developers can easily integrate the platform’s capabilities into their own applications for testing. Also, they can create their own custom functionality on top of the platform. The SDK includes a set of tools and libraries that make it easy for developers to interact with the platform, as well as detailed documentation and examples to help them get started. The possibilities for using the SDK are endless, and developers can use it to build all kinds of applications, from simple utilities to complex, full-featured systems.

Disclaimer

Why are we writing about this? Simple. We made BRØK for the Norwegian Government and are proud of it. We want to share it with the world. This is the first post in a series that covers:

• Our participation in the Norwegian Central Bank’s CBDC hackathon using BRØK
• How we built the Norwegian CBDC with anonymous transactions with stealth addresses, Know Your Customer (KYC) compliance, max limits, and continuous compounding interest
• An overview of Ethereum’s scaling strategy and how the cap tables platform fits in, including the benefits of using the Arbitrum layer 2 solution, including faster speeds and lower transaction costs
• The current testing stage for the cap tables platform and what the future holds for its development and deployment.

The views and opinions expressed in this post are solely those of the author. They do not necessarily reflect the views or policies of BRØK or any other organizations we are affiliated with.