Parfin’s Ethereum Layer-2 chain, Rayls, was recently featured in Project EPIC from JP Morgan’s blockchain-focused business unit, highlighting the network’s secure and compliant identity solutions to meet privacy needs in regulated financial markets.
Parfin’s Ethereum L2 Blockchain Privacy Solutions
JP Morgan’s Kinexys Digital Assets (KDA), the company’s blockchain business unit, on display the United Finance (UniFi) blockchain ecosystem Rayl in its Project EPIC report. The report examines privacy and identity solutions across an institutional landscape, aiming to “articulate the challenges and opportunities in this space and catalyze industry-wide dialogue and action.”
To achieve this, the KDA team conducted a Proof of Concept (POC) initiative focused on four objectives: validating institutional needs around privacy and identity, identifying criteria needed for a scalable identity solution, exploring the viability of emerging privacy solutions in today’s market, and bringing together institutional and web3 native worlds to find a viable path forward.
As a result of this POC it is noted in the report Parfins Ethereum L2 privacy solution. Rayls aims to provide a comprehensive system that “enables banks to transact privately and with confidence” by integrating privacy, security and governance.
KDA highlighted Rayl’s privacy ledgers, which “protected sensitive data on-site, with end-to-end encryption and Merkle root attestations that enabled confidential interactions.” The report indicates that the privacy ledgers are connected via a decentralized blockchain called ‘commit chain’, a shared blockchain for privacy ledgers to communicate encrypted messages.
This allowed each entity to run its own entity privacy on-premises ledger and communicate with others via the atomic transport protocol, which reportedly ensured the proper cross-chain transfer of assets “while privacy ledgers maintained independent, confidential data within the network.”
Rayl’s regulatory compliance was also highlighted as it was integrated with anti-money laundering (AML), know-your-client (KYC) and suitability frameworks through attestation services, thus “ensuring trust and delivering to institutional requirements are met.”
The need for identity and privacy solutions
According to the report, the billionaire is active tokenization The market is poised for exponential growth and is expected to reach a multi-trillion valuation in the future. However, it highlights the need to address privacy at an institutional level and develop composable, privacy-representative identity solutions to further develop the industry.
KDA said the lack of standardized approaches and infrastructure among market intermediaries for identity verification and compliance creates “significant inefficiencies in asset interactions.”
Furthermore, the lack of standardization often leads to redundant processes that fail to deliver the operational benefits that tokenization promises:
Without these fundamentals, the sector’s expansion will remain limited, especially in attracting traditional investors who expect robust data protection on par with conventional markets.
The report highlights some scalability considerations of the Ethereum L2 project, noting that a privacy pool approach using ZKPs instead of Merkle root attestations would provide more flexibility to Rayl’s privacy solution. The underlying throughput of the commit chain was also highlighted, as this is a “critical factor for scaling our system.”
Rayls tries to “bridge the gap between Decentralized finance (DeFi) and Traditional Finance (TradFi)” by supporting banks and other financial entities worldwide in navigating the complexities of digital asset management.
Ultimately, Marcos Viriato, co-founder and CEO of Parfin, believes that “Rayls represents a paradigm shift in the way banks can transact securely and efficiently,” adding that the financial technology company “looks forward to further developing solutions that contribute to the future. of banking.”
Ethereum (ETH) is trading at $2,920 in the weekly chart. Source: ETHUSDT on TradingView
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