Thread by @TyLobban

WORLD! J.P. Morgan has executed its 1st *LIVE* trade on public blockchain using DeFi, Tokenized Deposits & Verifiable Credentials, part of @MAS_sg Project Guardian 🙌🚀🔥mas.gov.sg/news/media-rel… Many world 1sts here, & since this is public ⛓ here’s a transparent🧵on what we did:

1st, we used @0xPolygon for the trade because we wanted to do this on #Ethereum and needed cheap gas fees for some expensive operations around Identity verification. Future phases of Guardian will explore other blockchains too given the MAS goal for open/interoperable networks.

2nd, we used @AaveAave so that we could leverage their permissioned pools concept. We deployed a modified version of Aave Arc so that we could set certain parameters such as interest rate and fx rates. You can see the lending pool we deployed here polygonscan.com/address/0x06f6…

3rd, we issued Tokenized Singapore Dollar Deposits! 💸This is a deposit token which is a general liability of JPM. It’s a native token giving stable on-chain value without the scalability issues of stablecoins. This is the 1st issuance of Tokenized Deposits by a Bank!

Here’s the Tokenized Deposit contract for SGD issued by J.P.Morgan polygonscan.com/token/0x5E85C1…

4th, we used @w3c Verifiable Credentials to provide compliant access to @AaveAave (or any other DeFi protocol). VCs give much more fine grained control than just allow-listing addresses. Risk limits, asset limits etc all possible. AND we built *on-chain* verification of VCs! 🤯

On-chain VC verification is huge. It brings composability to identity. You could have little verifiers that know how to verify certain things, and use them across dapps, bringing further standardization & portability to identity. Identity legos! Paging @provenauthority & @rh7 :)

We designed this in a way that ensures VC-based compliance checks can be used with *any* DeFi protocol without those protocols needing to know anything about VCs, freeing DeFi front ends from needing to do “KYC checks”. Compliance is pushed to the edge, not the dapp.

Check out the verifier below. We created 1 per party in Guardian. So each co can have their own rules, but anyone can see & validate those rules.We think on-chain VC verification is another first? Our design isn’t perfect & in the future we want to use ZKP polygonscan.com/address/0xE4Aa…

Sidebar: As a heavily regulated bank, we cannot enable money laundering and must undertake KYC. Using VCs & allowlists was crucial for enabling us to use DeFi pools with certainty on these points. Institutional DeFi!

5th! We built an Institutional Wallet that ensures 1) traders can never access company funds 2) only approved DeFi protocols can be used (NB for Institutional access) 3) VCs are *attached* to trade instructions: on-chain ✅ of VC = trader can trade, on-chain ❌ of VC = fail trade

Here’s the live (real money!) trade of SGD for JPY that we did:

polygonscan.com/tx/0x837280d3c… and polygonscan.com/tx/0xf904fa346…

This has been an incredible undertaking with many, many ppl working tirelessly to get here: large regulated FIs conducting the 1st live trade of tokenized deposits through VC-based DeFi on public chain. 🙌💸🆔⛓ Thanks to the ROCKSTARS at Onyx for more inspiring work! #builders

And big shout out to the other teams and ppl that helped make it happen! @AaveAave @StaniKulechov @0xChristina Steve & Steve @0xPolygon @MihailoBjelic @chainyoda @CryptonomicTech @vishakh @biconomy @ConsenSysAudits

Finally, check out the report that we co-authored that goes into further details of why Institutional DeFi could enable the next generation of finance, as well as further details on Project Guardian oliverwymanforum.com/future-of-mone… /fin