Shyft Network was designed as an interoperable standard for use cases that require multiparty trust and validation. In order to enable more use cases across public and permissioned protocols, standards are required to extend the tools and options available for new user groups, institutional use cases, and traditional systems.
The use cases Shyft Network focuses on are ones where you don’t necessarily have 3rd party obligations or require counterparties to create trust across each other in order to be successful. Traditionally, solutions to this are done through legally binding agreements or established regulatory and legal requirements. In the context of decentralized systems, adding in legal processes and cross entity rules are both challenging and in many cases destructive to the openness of the system itself.
The role of Shyft Network’s infrastructure is to maintain openness and decentralization across any protocol, while enabling standard processes that allow for counterparty rule creation and consent to be combined in order to solve trust and counterparty obligation issues that are required in the real world.
To put it simply, the transactions and interactions we engage in every day are largely based on trust and associations or validation of information and assets by other parties. The role of Shyft Network is to act as this trust layer, to bridge the gap between the traditional world and decentralized, in order to unify these ecosystems and further enable mass adoption and real-world interoperability.
The following explainer is meant to describe the use of SHFT, the native currency of the Shyft Network, and to outline only some of the major use cases of the currency and protocol standard.
Shyft Network Blockchain
In order to pay for services across intermediaries, DApps and participants, SHFT is used to both pay for the cost of security and operations, as well as a payment mechanism for the transmission of data and assets. This is similar to how existing blockchains function as Layer 1’s.
Shyft Network Smart Contract suite
The goal in Shyft Network’s design is to act as a multi-layer protocol depending on the needs and requirements of its users. Rather than competing with other layer 1’s like Bitcoin, Ethereum, Polkadot, Algorand, and more, Shyft Network was designed primarily as a very large smart contract infrastructure set. By taking this approach, the protocol can focus on cross-chain use cases and ways of unifying layer 1’s in order to build out a cross-protocol trust and compliant data layer.
Shyft Network runs three different core infrastructure stacks:
- A federated layer 1 (The blockchain): A public system for use cases that have a particular set of needs and requirements. This is primarily for enterprises and institutions (ie. Governments) who would rather focus on data origination and require a different trust model at the base protocol level.
- Shyft Network Smart contract suite: The primary standards logic to enable all use cases, intermediary interactions, and tools for developers to build applications against Shyft Network.
- Byfrost Bridge: An asset-staked bridging infrastructure for cross-protocol data and asset transmission. Byfrost was designed with the smart contract suite. The goal of Byfrost is to bridge the Shyft network smart contract suites together across protocols. Through this process, all of the history, use cases, and users that sit on Shyft Network can be utilized across other protocols, thereby unifying everything into a cross-chain data and asset availability layer.
The rest of this post will focus on the use cases of Shyft Network and the SHFT currency within them rather than a technical deep dive into the primary infrastructures.
SHFT is a means of payment, a mechanism for bonding value, and an instrument for governance value capture. SHFT, depending on the use case, can be utilized in a multitude of ways which includes a monetary instrument and value capture system, as well as an authorization system for long-term validation.
SHFT is a currency for identity and data transmission, as well as a governance mechanism for coordination across ecosystems that enables entity-to-entity governance, compliant asset creation, and a system for compliant defi and other applications. Enabling a new side of the existing ecosystem will drastically expand the size of market participants and increase the size of asset participation across all decentralized projects, protocols, and marketplaces.
Identity, Counterparty Discovery & User coordination
We believe that the next phase of progress for decentralized systems is in the creation of identity, reputation, and enhanced methods of entity creation and coordination. Users, entities (Dapps, Defi, institutions, enterprises, etc.), assets and data are primary interactions in everyday life. Shyft Network enables complex creation of these verticals to build a base standard for cooperation and transaction coordination.
Identity is very broad and extends to nearly every facet of life, which means defining initial use cases must be derived from critical issues and problems that we face and feel everyday. In creating Shyft Network, the contributing early participants and teams brought in problems and pains they had felt from the early days of the crypto ecosystem and worked towards solving them.
The SHFT token is used to pay for security and operations on the Shyft Network, as well as to enable data market payments across intermediaries involved in identity systems. The simplest example of this is the current project being developed on Shyft Network in collaboration with the Government of Bermuda. The Perseid project is the first national identity project aimed at leveraging a public blockchain protocol to create a national data market place and identity ecosystem. SHFT is the currency used to enable identities across the country, and pay for data services across institutions engaging in user-consent based identity.
Compliant DeFi & Global Regulations: A global opt-in compliance and trust Layer
In order to ensure that the ecosystem continues to grow in cooperation with new regulations, we need systems that can bridge the gap and enable opt-in infrastructure to allow for regulated intermediaries and rules to be built across permissionless networks. This does not mean forcing people into compliant systems, but rather providing more options to allow for new user groups to be able to participate in the ecosystem. The future of institutional adoption requires compliance requirements and primitives to be a part of market infrastructure in order to actually utilize these systems.
This not only protects the ecosystems growth but allows us to tailor to the liquidity that exists outside of the ecosystem today. Compliant participants and liquidity in the traditional financial system is many orders of magnitude larger than the crypto economy, and being able to provide open infrastructure to these parties enables onboarding and regulatory clarity. Shyft Network was designed to enable these use cases, creating a cross-protocol environment for compliant liquidity, identity passporting and data transmission.
The FATF travel rule was the first global regulatory requirement placed on the ecosystem in June of 2019. Some of the largest crypto platforms, DeFi projects, and stablecoins including Binance, Bitfinex, Huobi, Aave, Tether, joined together to create Veriscope atop of the Shyft Network. These exchanges today are utilizing Veriscope to ensure user consent, data security, exchange to exchange verification and counterparty discovery. Regulations are inherently designed to centralize functions of systems, but through the design of our system, Shyft Network is the only solution that globally allows Bitcoin and other crypto ecosystems to maintain openness and decentralization while allowing users to comply with cross-jurisdictional requirements like the travel rule.
The SHFT currency is used to ensure spam prevention, prevent data attacks against exchanges and global users of the system, create payment and bonded asset channels for untrusted counterparties (a form of data market transaction) and over the long term helps maintain the governance system currently being directed and developed by the global coalition of digital asset companies.
The SHFT token is used to pay for the security of validation for crypto transactions that occur across participants in Veriscope. When a digital asset is withdrawn and sent from one platform to another, SHFT is used to request information from other platforms and to complete data transactions. With this, Shyft Network through Veriscope becomes a data side chain to public networks, currencies and tokens globally, and acts to ensure security and privacy are maintained across our open ecosystem.