R3, the startup that began with a consortium of banks trying to figure out how to use cryptocurrency technology in a private setting, is now looking to enter the vast expanse of decentralized finance (DeFi).
R3 announced its regulatory-friendly DeFi network and token – dubbed Obscoro – at this year’s CordaCon, R3′s annual developer summit, later stressing that it is a proof-of-concept, and a go-live date would be dictated by regulators.
“Our team is working on a proof of concept project for a private, permission-less DeFi network, with a corresponding token,” R3 representative Nick Murray-Leslie said via email. (“Private” and “permission-less” sounds confusing, but refers to R3′s work with Intel SGX to create a closed setting for transactions while holding onto the open nature of DeFi.) “Our goal is to design, test and have it shovel ready from a technological standpoint for next year.”
Proponents of open and truly permissionless DeFi are considering ways to make their platforms more regulation-friendly such as introducing know-your-customer (KYC) checks and features like the whitelisting of users. R3, with its privacy-centric Corda platform, is coming at this problem from the direction of a more traditional, regulated product design, in one of the more pronounced pivots in recent memory.
Read more: Aave Proposal Enlists Fireblocks to Aid DeFi Protocol’s Mainstream Finance Push
R3 said Obscoro has the potential to reduce front-running in DeFi applications by miners who are privy to large, market-moving trades and insert their own trades to take advantage.
Enterprise recalculations
More broadly, the move by R3 represents a further concession that public blockchains, as opposed to shared databases within company firewalls masquerading as innovation, have proven to attract far more capital and usage.
In fact, the Obscoro announcement is not the first time members of the open-source Corda community have pushed for DeFi-like functionality and a token to run on the Corda Network.
This has been the continued focus of LAB577, a startup helmed by former NatWest banker Richard Crook, which last year announced the Cordite Society, a co-operative registered in the U.K., and its plans to release the XDC crypto token on R3′s Corda.
“LAB577 are delighted to see the launch of Obscoro, another step in the convergence of the leading blockchain technologies,” Crook said Wednesday via email, adding:
“The need for privacy, identity, finality and governance in the financial industry has remained unchanged. It is for the blockchain technologies to meet the requirements, not the other way around.”
