Provenance: Blockchain-Focused Financial Services
What Is Provenance?
Provenance is a public yet permissioned distributed stakeholder blockchain. The project was created in-house but it utilizes the consensus module from Hyperledger. The initial aim of Provenance was to focus on asset originators, buy-side, and sell-side together with their investors. However, the platform is currently accessible to anyone, both entities and individuals that are permissioned.
Provenance also embraces attributes of the blockchain technology—it’s decentralized, immutable, and trustless together with the features that help it impact financial services such as ledger, registry, and exchange. Interested parties are encouraged to join the mailing list to become members.
Provenance Global Ledger
Provenance targets the financial services industry. It acts as a global ledger, registry, and exchange across markets and assets. The Provenance platform provides a suitable avenue where loans are originated, financed, and soon will be securitized on a daily basis. Members of the platform include global financial institutions that also act as stakeholders, originators, lenders, soon will be traders on the blockchain. Although it started with loan origination and securitization, the platform has limitless use cases in the financial ecosystem.
Provenance Mission
The more than $300 trillion in global financial markets incur hundreds of millions of dollars in custody, audit, trustee, and administrative costs every year. Provenance seeks to dramatically minimize the costs associated with such services and open new markets.
Provenance Participants
Provenance has four main participants—administrator, member, omnibus banks, and stakeholders.
Administrator
The administrator is in charge of giving permissions (transactions) to members. There is only one administrator at a time that also approves stakeholders. The work also includes diligence for on-boarding. The administrator not only creates but also reviews smart contracts related to the permissions that each node holds to store and process transactions. Another duty of the administrator is to determine the cost of transactions on the protocol and the amount of stakes nodes must hold.
Members
Members can also be stakeholders (nodes). They pay transaction fees to use the Provenance platform and have private conversations between themselves, which are not part of the immutable record held by nodes. Therefore, members can be institutions or individuals those who hold Hash can continually set their reserve price to sell Hash to support transactions, and over time, any member will be able to buy or sell Hash directly by showing bids and/or offers in the Provenance marketplace.
Omnibus Banks
Omnibus banks are the gateway to Provenance platform. Any transaction that involves fiat originates through an omnibus bank. Members may have an account directly with the omnibus bank or send and receive fiat through another bank to the omnibus bank.
Omnibus banks are also responsible for the KYC/AML of members on Provenance. The administrator may perform additional KYC/AML checks if needed.
Nodes
Nodes are charged with the task of hosting, through a third party cloud service provider, smart contracts already reviewed by the administrator. The encrypted data is delivered to the node, processed by smart contracts, and added to the blockchain. Nodes get their payment in Hash for this service. They put up a stake of Hash to ensure good behavior. For example, they do not try to hack the smart contracts or alter the blockchain.
However, nodes do not validate transactions themselves and are not privy to the encrypted data being submitted to the smart contracts they host, or the encrypted data resulting from those smart contracts on the blockchain.