Requested DOT: 1,000,000 DOT
Short description: Project Category/Type: Chainalysis provides data, analytics, and compliance solutions to Polkadot, driving insights that may be helpful for institutional market entry.
Context of the proposal Proposal executive summary: Chainalysis is pleased to collaborate with Polkadot. As the leader in blockchain intelligence, Chainalysis data and software can help Polkadot grow their business compliantly within the institutional market.
Institutional clients fall under the oversight of various global and national regulatory bodies such as the Financial Action Task Force (FATF), the European Securities and Markets Authority (ESMA), and the United States Securities and Exchange Commission (SEC). As guidelines and rules for digital assets evolve and become more definitive, exemplified by frameworks like Markets in Crypto-Assets Regulation (MiCA), entities such as Polkadot need tools and training to ensure regulatory compliance.
For institutional clients, one major requirement before listing a token or building an app is the ability to understand the risk of working with that particular blockchain and be able to monitor and trace its tokens. This includes understanding the level of risk of that ecosystem, determining what controls can help mitigate those risks, and equipping them to fulfill regulatory reporting requirements about investments in its tokens.
Chainalysis is well positioned to provide tooling to Polkadot that helps them enter the institutional market by:
Providing visibility to regulators and authorized institutional prospects of any risky on-chain activity related to the DOT token on the Relay Chain
A key driver to unlock institutional interest is to ensure good standing with regulatory bodies. This involves taking a risk-based approach and receiving alerts on any risky activity that may be present related to the DOT token on the Relay Chain
Chainalysis provides the best-in-class data platform when it comes to identifying illicit activity and empowering users to take a risk-based approach
This is not just about avoiding negative consequences but also about building a reputation as a responsible and law-abiding actor in the digital assets space
Offering on-chain intelligence to authorized institutional clients to meet their requirements related to the listing of the DOT token, which may be related to Investigations, Compliance or Growth use-cases
Collaborating with Polkadot on events, announcements, case studies,, etc that would help spread the word that Chainalysis collaborates with Polkadot and provides compliance software
The Polkadot community intends to leverage Chainalysis software to support the following business goals:
Increase in market capitalization of the network through institutional adoption, specifically by including DOT tokens in the portfolios of these large institutions
Capture a larger market share of institutional market growth in the crypto assets space – as projected by analysts – either via tokenisation or through the development of applications that uses DOT tokens
Grow adoption on crypto markets across the world. As cryptocurrency adoption grows (see our annual Geographies report), Polkadot would like to win a larger stake in the market by positioning its ecosystem one of the safest
Avoid fines and reputational losses by providing a safe and transparent ecosystem where institutions and regulators can monitor risks
Grow in popularity among institutional clients that are building applications in this ecosystem and driving growth of the developer’s community
In order to achieve these goals, Polkadot needs a blockchain analysis solution to help build trust among regulators, institutional customers and prospects, and developers.
For complete proposal, please refer to the following link.
⚠️⚠️This presentation is a continuation of the Chainalysis session that regrettably couldn't be presented in its entirety at the AAG event due to time constraints, resulting in an interruption by the host.
⚠️⚠️ The Chainalysis team has improved some points in the proposal. The changes are:
⚠️⚠️ We've released the AMA video from Chainalysis held on May 13th.
Threshold
The Acala Parachain suffered two substantial events that resulted in exploited funds:
Will this tooling eventually allow us to identify where all the exploited funds ended up?
Will the tooling be able to investigate crimes that occurred in the past on kusama, polkadot and their respective parachains?
Edited
Hello from Polkadotters!
Can you provide us with the proper budget layout? We want to be sure that the amount of 10 mil. USD is justified.
We understand, that the Chainalysis integration might lead to a higher level of adoption of Polkadot in TradFi, which can be beneficial for tokenholders and for those institutions as well. But in the other hand, funding Chainalysis and its solution goes against the decentralized ethos. We will consider our vote within the next few days.
Can you please also elaborate on answers for previous questions by other teams/entities/individuals such as Velocity Labs, or OnlyDeFiGuy?