What the slide depicts is a model of a financial ecosystem
that is utilizing blockchain.
Now why is this important?
So basically when you use a blockchain based application
in the financial domain,
there are many other supporting pillars
which need to be incorporated to ensure
that the implementation is a robust one.
So if you just focus on
the hypothetical model of a financial ecosystem
that I've drawn here, on the slide,
you see that the financial organization
is on the right hand side and we have a bank as well,
just in case there needs to be some interaction
between the financial organization and the bank
not to do away with the banks altogether.
And the bank has a database with the user account.
Now for example,
this financial organization wants to come up
with a blockchain based application based on donation.
This can also be applied to impact finance
in the sense that you can use a donation
to crowdfund SDG projects.
So this financial organization
brings out two blockchain based application,
one on donation and another on tokenization.
Let's us consider just tokenization of a green sukuk
in the case of impact finance.
So the donation application and the tokenization,
it might not be a single smart contract.
There can be multiple smart contracts
which are able to achieve the process of donation or tokenization.
Now a question arises How does a financial organization,
which is used to a certain administrative hierarchy,
is able to manage these smart contracts?
If you just think in terms of a single smart contract, fine.
But what about the fact that there were multiple smart contracts?
How do you go about managing them?
So this is a very crucial challenge
when you think in terms of the usage of blockchain.
So what I did was I developed a management plan
to integrate manageability of the smart contracts.
So what this management plan
accomplishes is that you will have a single interface,
a single smart contract
that is managing as many smart contracts as you want to.
This also results in cost reduction.
You require less human resources for it.
And simultaneously, what I was able to accomplish through this
was I developed a dashboard.
Right now, if, for example, you are using a Ethereum
you would need to go to the Ethereum Explorer.
But with my dashboard, what you can do
is that at periodic intervals, the dashboard will display the changes
in the smart contract data for your application.
And alternatively, what I also did was like, for example,
there are some people who might not want to come to the dashboard.
They want to receive email notifications.
Okay. This this event has maybe this one has been repaired.
And I want to get a notification on my email for that.
So I have also accomplished that through the management plan.
Now coming to the left hand side where you see the database.
So for example, when you are using the donation application,
maybe you want to do
automatic donation from the user account,
he authorizes your financial organization
to take some money from his bank
and given to donation like 2.5% for zakat
when you are accessing the user account in the database of a bank,
you will need to think in terms of data privacy,
which is very, very important in the context of GDPR
which is the European General Data Protection Regulation.
So what I did was I developed a privacy management plan
which uses differential privacy.
Now, differential privacy is something
like you can think in terms of analyzing a statistical database.
Like, for example, the bank has a database
and I want to know how many people in the bank
have an average salary of, let's say 5,000 USD?
So I can use differential privacy to answer this query.
So it will just give me
an approximate number
without telling you anything about the user details.
So there is no way you can get to know who are the users involved.
The bank account holders,
in giving you the final result of that particular query,
like, let's say average salary
of the number of people that you want to know.
Now again, the privacy management plan
that I accomplished was through smart contracts.
So how can you manage these smart contracts
so you can use the management plan again,
a very important point to note here is
whenever you want to desire privacy
in the present scenario, with respect to the blockchain data,
you need to use a permission blockchain network.
It will not work for the public blockchain network as of now.
So through the privacy management plan,
you can get the answer to the query
and send it to the blockchain platform where the data will be stored.
Now, so the financial organization is, let's suppose,
using the blockchain platform that is depicted in the figure.
When you consider the blockchain platform.
So this should have some kind of governance.
We have different entities in the blockchain network users, validators,
which are miners in case of Ethereum.
Then you have the stakeholders, then you have the founders,
and the organization might have different goals.
So you have to consolidate the goals of the blockchain platform
and help the validators with the miners
and the users contribute to the accomplishment of this goats.
And how can this be done?
This can be done when you talk about a governance strategy.
So this is a very, crucial challenge
that exists in blockchain platforms, whether it is a Ethereum,
whether it is Bitcoin, whether it is tezos,
which follows an on chain governance.
So what I did was I came up with a mathematical model
for blockchain governance based on a Nash Equilibrium,
which is a concept in game theory.
And then because I was doing a research on cryptocurrencies
and cryptocurrencies are divisible
to fractions of a cent automatically,
a very important application
arises of blockchain based micropayments,
which have a very important role when you think of financial inclusion.
When you think of providing financial services
to people who are unbanked and underbanked.
So I did a study on the economic impact
of these blockchain based micropayment systems.
And in the context of impact finance,
all these development tools
that you see here are very, very important.
As the questions come and as I talk about other things,
I will brief on how the utility
of the blockchain is very important for impact finance.
And of course, the challenges of that are still present
because you see here,
there is no KYC depicted,
which is of course a very important
and integral part should be a very important
integral part of a blockchain based application.
So here I want to depict a use case.
So when you talk about impact finance,
there are different sectors
where you can do impact investing in one is supply chain,
then you have affordable housing, then you have micro-finance.
So here I will target the application in the supply chain.
This is for the organization one I'm working for.
So basically what we are working on is introducing an impact token,
a very important challenge
when you talk about impact finance
is how do you record and measure the impact?
So how do you go about measuring the impact
that your initiative is having and how do you record that impact?
So this can be resolved by using an impact token.
For example, I want to show that, okay, my organization is providing
responsible consumption for the users.
So we take it very seriously
when we say we are delivering a halal product, it is truly halal.
So how do I ensure this?
So we have introduced a kind of a DNA detection kit,
which when the user will use,
he can use it to detect in the food product
whether there is an allergen present, whether days for present,
or maybe whether they are pathogens present.
And this impact token, which we call as OACoin
coming from one aggregator,
is a stable coin with respect to fiat currency.
So for example, the supplier, what is the utility for the supplier?
He uses the users are mobile application uses the DNA detection kit,
then checks whether that is, for example,
say pork is present in the chicken or not
and puts the result on the mobile app.
So of course, this can go to the logistics side
only when the food product is free of any contaminants, it's halal.
Now the buyer receives this chicken.
He replicates the entire process
and inputs the data
as to whether the chicken he has received
is really free of pork or not.
So what happens in this process is the supplier
and the buyer, in the absence of impact token,
will not be ready to record the data.
It is just something there which exists,
but there is no incentive for them to record the data.
So from the OACoin that we have introduced,
we have pegged it to US dollars.
So for example, if you talk in terms of one OACoin,
it will be equal to a certain amount of US dollar.
So if they put in data,
they will be collecting
that number of impact tokens accordingly
and then they can redeem it on the next purchase
with one eye bricks
or the supplier can use it to reduce the transaction fee
for using our platform.
What we get out of it
is that we get verifiable data that we can use to call
for other strategies for our organization.
The supplier gets to know the logistics was truly halal or not,
and as such, things on such sites can be driven.
Now, this also enhances the transparency,
which is a critical challenge of impact finance.
So basically this
we have accompanied this with another facet of blockchain
where we use the blockchain
for storage of certificates, whether it is a halal product,
whether it is organic product, whether it is a bio product.
So all these certification bodies,
they are a part of our ecosystem
and they use our platform to go to our partner.
One aggregates the other interface provided by them
to store the certificates.
And so whenever a supplier supplies a product claiming
that it is for example halal
then his certificate goes through a consensus check
in the distributed network of a partner or to generate
and whereby it passes the consensus check.
So the certificate is the same
that was provided by the Halal certification body.
Then we store the certificate on Etherium
and the buyer can take
the certificate at our end as well as they can see the links
for the storage on Etherium.
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