Digital Asset Holdings Launches New Blockchain Application GSL for Systemically Important Financial Institutions

Rage Review : Blockchain startup Digital Asset Holdings has extensive cooperation with large global financial institutions and is highly professional and pioneering in the financial field. It has also developed blockchain applications for specific financial fields many times. This time, the company focused on the needs of systemically important financial institutions and released a global record synchronization system (GSL) specifically for them, providing unified technical services and application environment through modular blockchain and smart contract solutions.

Translation: Annie_Xu

New York-based Digital Asset Holdings has unveiled new blockchain technology that it says could connect the world’s most important financial institutions in the future.

Last week, the company launched its Global Synchronization Log (GSL) for the first time, hoping to modularize the company's blockchain applications; rather than simply a single "full stack" that combines all applications, languages ​​and execution functions.

As the foundation of an independent distributed ledger project, GSL can also help other blockchain products improve their smart contract services.

Shaul Kfir

The company's goal is industry standardization, said Shaul Kfir, the company's chief technology officer.

"If there are many full-stack solutions competing with each other, even the most common problems require modified solutions; GSL focuses on the differences in specific partitions of the platform, so it can be combined with other components."

At a meeting of the open source blockchain alliance Hyperledger, the GSL white paper was released for the first time, detailing how several major enterprise blockchain frameworks interact with it, such as Hyperledger's Fabric, R3CEV's Corda, and CoinScience's MultiChain.

The white paper states that the benefits of this large-scale collaboration include increasing the reliability of transaction data and helping other blockchains improve version management and system throughput.

“We believe this solution is suitable for systemically important financial institutions. And many use cases, platforms, and industries can reuse these components and benefit from this large-scale collaboration.”

Determine the solution

Tamas Blummer, chief ledger architect at Digital Asset Holdings, explained the white paper and pointed out that GSL and Hyperledger share the same goal of connecting enterprises.

Tamas Blummer

To this end, the purpose of GSL is to help Digital Asset solve the regulatory challenges of working with global financial infrastructure providers.

The company said that there are currently five privacy protection methods used worldwide, but the encryption technology and code obfuscation among them cannot meet the privacy needs of customers.

Blummer believes that the above two methods have similarities with the bitcoin blockchain, Hyperledger's Fabric, and the zero-knowledge proof blockchain project Zcash.

The Digital Asset team believes that although Zcash is called a major advancement in blockchain privacy, it lacks practical application proof.

Among the remaining solutions, GSL chose to combine distributed ledgers and data execution protection.

The white paper calls the former an interconnected network that uses "universal protocols or trusted intermediaries" for data transmission; the latter is a "blockchain that carries sensitive data fingerprints throughout the network", while the actual data is split and transmitted through private channels.

GSL Function

The first function of GSL is to ensure that "independent events" are unique. In other words, it ensures that smart contracts only appear in one place, and modified contracts will only retain the new version.

Interestingly, the white paper does not use the term “smart contract”, but chooses to use the traditional term “contract”.

But in addition to preventing the emergence of multiple copies of contracts, GSL is also a communication system for contracting parties, which can transmit dynamic information of the blockchain to up to thousands of contracting parties.

Therefore, contracts are processed off-chain. This includes all the process of transferring transaction data to common workflows. However, by design, these agreements are executed according to code and are therefore not legally binding.

In fact, these contracts are treated as a state sum and are also the theoretical basis for the definition of blockchain in the white paper.

As long as these contracts can execute instructions, they are part of the blockchain. However, as soon as a new contract is created that references an old contract, the old one will be replaced or eliminated.

This replacement process is somewhat similar to the contract version that prevents double spending. And if you encounter a problem similar to DAO, you can also manually collect those unused contracts to prevent the development of attacks.

Transactions and Contracts

GSL transactions modify the status by activating or collecting related smart contracts.

For added security, GSL is designed to allow state modifications to be made without understanding or disclosing that information to third parties.

As long as this design can bring practical benefits, it can encourage previously competing projects to cooperate.

The white paper states:

“We use DAML, a domain-specific language, to write and execute financial institution contracts, which guarantees determinism and immutability, but the purpose of GSL is to support multiple projects.”

One risk of the Digital Asset solution is that transactions on the GSL may involve open markets, which may lead to data leaks.

To prevent this possibility, Digital Asset splits the transaction into two parts.

The first part is to transform the event into a node in the Merkle tree and send a notification to all contract stakeholders at the same time. "Importantly, these shared secrets are encrypted."

This information can be easily stored and identified at low cost. In order to achieve the ultimate goal, transactions must be cheap; that is, low-cost, low-computing power transactions can effectively notify all parties that may be affected by the contract.

The second part is open to auditors to review, so as to ensure the one-time effectiveness of the contract. Auditors can only see information related to the work.

Regulators step in

In addition to sending information to all parties who are subject to the terms of the contract, the GSL software can also verify that the information is accurate and up to date.

To this end, Digital Asset limits the tasks and division of labor of the user group in the GSL network. However, in order to ensure the accuracy of the entire network, all participants must be able to verify transactions.

“Therefore, each participant is responsible for reviewing the entry of ledger information in real time, which is of course limited to the ledger content that can be seen.”

In addition to mimicking the Bitcoin blockchain and using contract participants as auditors, it also provides regulators with special information channels.

Moreover, this information channel varies depending on the type of regulatory agency.

These include “notification auditors” that ensure that all affected parties are notified of contract changes and that the state of the blockchain is consistent.

Next step

Digital Asset said it hopes the white paper will filter feedback from Hyperledger members, starting with this launch event.

Perhaps because the white paper was released before the meeting, many attendees were unable to understand its content, leading some to ask whether it was in competition with the R3Corda project.

Therefore, the company plans to release detailed technical specifications after collecting feedback from participants.

It may also explain whether and how Hyperledger members will adopt the technology.

“We will continue to publish APIs developed by GSL and look forward to working with the Hyperledger community,” Kfir said.