This is a full (nearly) recap of an AMA (Ask Me Anything) session that happened on Wanchain Telegram chat on Tuesday 23.06.2020.
Oliver Birch: Hey all!
Thank you for joining today’s AMA.
Let’s start with some brief introductions from Talium.
Francois and @ethjb , if you can provide a brief introduction, including your background, what you did before getting into blockchain and what you are currently up to with Talium.
François de Chezelles: Hi all, thanks for having us. I’m François de Chezelles, co-funder of TALIUM. Background: studied aeronautics & astronautics at MIT, then moved 18 years ago to IT engineering where I held management positions. I co-created TALIUM in 2012, an engineering IT servicing team specializing in complex systems integration.
As an Oracle partner, we’re used to working in corporate international environments. In 2015, we started focusing on blockchain and applied cryptography. Tokenization proved the real deal, hence the platform we shall discuss.
Julien BRODIER: Hi everyone, I’m the also the co-founder of Talium and the CTO. Started in 2004 with ‘standard’ software engineering for companies and CTO of companies since 2006. I’m leading the developement team on our Digital Securities management platform.
Oliver Birch: Thank you Francois and Julien, we will now open questions up to the community.
Hello everyone thank you for this AMA, from my understanding, Talium will safely keep all investor documentation, while Wanchain provides the platform that will likely issue tokens in the wrc1400 standard. Can you provide more details about this partnership? which part will be in charge of bringing investors ? and will be responsable of compliance with current regulations ?
Julien: Great question @Mussino . The platform provides a great infrastructure to ensure compliance rules are enforced. Issuers will be able to setup simple or complex compliance rules using a rule engine. The platform securely stores due diligence documents and KYC documents in a safe vault. Talium is not responsible to execute to due dil itself, it is done by a compliance officer for the issuer
Commpliance is one of the key differenciators of our platform. We provide ‘KYT’ (know your transactions) which is more granular than KYC.
Oliver: Specifically, partnerships — Wanchain is in talks with a few potential partners to launch the first STOs by the end of this year. Some partners in Canada (as of now). We will have more news about that once we finish the full integration and have security token exchanges lined up.
Do you have a partner audit firm in your STO initiatives at Talium that would also be involved in your business with Wanchain?
Julien: Yes, we work lawyer firms to ensure our platform’s processes are compliant and also to give advice to company wanting to issue tokens.
We are about to release an audit publicly also.
How do you plan to gain adoption fast enough that the market will not be saturated with other similar project by the time you launch or what advantage could you offer?
Julien: Great question. We think we have a competitive advantage with our compliance modules, which is quite unique. We think most platform could have a hard time staying compliant with only smart contracts to model compliance rules. We have mainly a tech provider position, which mean we are not affected. We mainly provide the platform for financial firms who have necessary agreements
Bonjour François, ça va? interesting background. How come you made a move from aeronautics and astronautics to blockchain?
@ethjb and François, have any of your corporate partners shown interest in developing more solutions using blockchain technology or raising money through this new STO mechanism ?
François: aero/astro is awesome yet tackles one area. IT engineering tackles all. I got involved in state-of-the-art IT projects and R&D, then blockchain popped up, along with applied cryptography. Totally loved it as it enables huge added value (when relevant of course).
Hey @ethjb what has been the biggest challenge when launching the STO platform? Has it been a lengthy process to get everything compliant in France?
Julien: Good question also. Many big challenges, but on top, i would say : the ability to build a multi-jurisdictional and multi-assets platform and stay compliant. One exemple : issuing equity tokens is not hard. What is hard is to ensure any transaction keeps compliant even on the secondary market. You have to satisfy regulatory constraints, company constraints, shareholder constraints, and those rules can change.
François: Another challenge has been that a ‘new’ financial assets handling system only has a meaning if beyond bringing blockchain-enabled capabilities it changes the game regarding costs. Considering we have customers doing STOs of all sizes, we needed to make the platform as self-serviceable as possible to reduce costs while providing high-quality. In the end, we’ve managed to literally slash these costs.
How does Talium clear STOs for The Howey Test and would Wanchain investors be beneficiaries of . equity, dividends, profit share rights, voting rights, buy-back rights, etc. Since the tokens are deemed to be a security, they are subjected to various SEC regulations and federal securities. It can be said that tokenized securities are a digital form of traditional stocks running on the blockchain with compliance rules integrated into the token itself. ?
Julien: Well, that the role of the issuer to clear the howey test. We provide a rule engine to clear those tests !
General question to both What advantages would replacing the traditional stocks with the digital blockchain system give us?
Julien: Easy transferability, low infrastructure cost, easy access to STOs (easier than IPO) and regulated environnement in many countries now (ownership of a token recognized as ownership of the underlying Securities). Transparent and easy way to calculate dividends/coupons and faster to handle corporate actions (voting, and so on).
François: Also: solves delay issues (sometimes huge), and adds liquidity. Much easier and cheaper for issuers, and makes investments more promising to investors.
Part 2: Where traditional share markets are off on weekends and close at 5 pm, the security token space remains active as long as the blockchain is active, i.e. 24/7. This huge digital advantage opens up an array of opportunities for investors and businesses alike how do you see this opportunity play out with your partnership
Julien: Right, and this is where full automation of compliance has a role to play. If you’ve not fully automated compliance rules, then there should be a manual (human) clearing process. For this purpose, we’ve implemented a Domain Specific Language to express compliance rules in an easy way, and a way to upgrade them without having to ask an engineer to deploy a new version of the smart contracts.
How would Talium envision leveraging Wanchains crosschain technology such as the the two way bridge can you see STOs being issued on various tokens via Wanchains platform and how would you see that play out over time
As already mentioned, security tokens are truly securities and are subject to various regulations and federal restrictions. To code all of these regulations in a smart contract can sometimes become strenuous given the complex intertwined set of regulations. How does Wanchain seek to overcome this ?
Julien: Yes, cross-chain tokens is a very interesting feature. That requires a bridge able to handle that on both sides. We could do that if there’s a need to. It means having escrow contracts on both sides (eg. ERC-1400 <=> WRC-1400 escrows).
What is going to be THE standard that will be adopted for issuance and management of security tokens? How do we list these tokens in exchanges or the secondary market?
Julien: Great question. A standard is a standard if it is used by the majority. We’ve found it interesting to use the ERC-1400 because there was a community around it and a lot of work has been achieved around it on many real use cases. The standard included : partial fungibility (partitionning), custodial ownership, operator/controller transfert, documents attachments.
Great Q&A! I am wondering how does the platform select project to launch STO and how to avoid investors being scammed? After the STO, where can the tokens be exchanged? Thanks.
Julien: Thanks for your question. As a tech provider, we do not provide due diligence services but we work with companies doing it and we provide investors with ‘marks’ and the name of the company having audited the issuer + operation.
If i did understand correctly wanchain will be the second blockchain after ethereum, to integrate your platform with.
Can you tell us about your sto experience on eth up till now, and will you continue to use eth (if you did already) and expand to other blockchains as well?
François: Thanks for your question. First you should understand the platform enables to adresses intermediaries (private banks, accelerators, etc.), who themselves can adress financial asset issuers… or other intermediaries. We can do that because our implementation segregates each ‘tenant’. This results in absolute scalability. So today, our STO customers are either intermediaries or direct issuers. We have intermediary partners over Africa for 30ish countries, others active worldwide, some focusing with Switzerland, and obviously in France. We also have issuers as customers in France and Switzerland. More to come. STOs are a new market, but things are moving very fast. Also… the platform is blockchain-agnostic by design, compatible by default with all EVM-compatible blockchains. So that’s more like 15+ compatibilities.
Now that Polymath is moving to another blockchain, will another project lead the ERC1400 initiative? Or is Polymath still leading?
Julien: Adam Dossa (Polymath) told that ERC-1400 will still be the standard for Eth and they develop Polymesh in parallel for specific purposes. It’s community driven, Polymath is very involved and Consensys is using it too , among many others.
What is difference between WanChain DeFi to other DeFi Plattforms?
Jack: Wanchain is one of the first decentralized cross-chain DeFi platforms in the space. Tokens on other chains can be moved to Wanchain to buy assets such as STOs. On the other hand, assets can be moved to other chains to participate in other markets…
François: Thanks The Rock for the question. The WanChain DeFi platform notably benefits from Real compliance capabilities. Compliance is handled offchain with certificates provided through a compliance engine; the possibilities are limitless in terms of rules to be used: onchain, offchain, coming from an API, live (versioned), handling actual complex associates’ pact rules, etc.
Hi Jack. Arent you afraid that working actively towards fundraising on your blockchain, this might hurt one day relationships with china officials?
Jack: There shouldn’t be any problem if the funds are raised from investors from outside of China. And China is going to be more friendly toward the blockchain space. As long as we comply with the policies, we should be fine.
Part 2: Thank you Jack. So fundraising for chinese companies also shouldnt be a problem, as long as the funds come from outside?
Jack: Through certain structure such as VIE. Also qualified Chinese investors are allowed to invest in foreign companies.
What are the main obstacles that could face the STO industry going forward? can we expect more and more strict regulations all around the world?
Julien: Well, STOs are regulated as standard instruments by financial markets authorities. The only thing we hope is that there will be improvements or simplifications related to secondary markets. I mean, right now if you want to provide a trading venue you have to be an ATS or MTF. Also, laws have to be adapted regarding settlement activities wrt responsibilities in a decentralized environment
Hi Jack, will wanchain consider also some form of crosschain that directly transfer between two non-wan chains, for example, BTC to ETH? I think there are considerable number of people who may not want to move assets to wanchain, but are very much interested in crosschain transaction.
Jack: Yes, that’s exactly what we are working on.
Thank you to the guests of the AMA — François de Chezelles, Julien Brodier and Jack Lu.
Also thank you to everyone who participated and/or is reading right now. Until next time!
Wanchain is the infrastructure connecting the decentralized financial world. Wanchain’s live cross-blockchain solution is EVM-based, includes optional private transactions, and provides a decentralized, permissionless, and secure approach for interoperability. Wanchain has employees globally with teams in Beijing (China), Austin (USA), Kuala Lumpur (Malaysia), and Madrid (Spain).
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