What is AllianceBlock and what real-world problems are they solving?
AllianceBlock is establishing the Investment Bank of the Future. By leveraging cutting-edge technology, we collapse all departments of an investment bank into one flat platform, and provide SMEs with cheap, quick, and smart access to regulated tokenized equity and/or debt financing.
There are many problems we aim to solve. From a corporate perspective:
Traditional finance –
- Investment bank operations are inefficient, costly, and constricted by legacy technology, operating systems, and business models.
- The financing and settlement process (bond and share issuance) is long, expensive, and complex, involving more than 10 departments in a bank and around 50 people.
- SMEs are considered high risk, low return clients and it is more difficult and more expensive to access capital (fees up to 11% for an IPO).
- Investor access to the best deals are not objective and highly dependent on their network.
Alternative finance –
- Crowdfunding and crowdlending offer SMEs an alternative to traditional banks, however there is no advisory, no secondary liquidity, no rating, and the failure rate stands at 75%.
- ICOs were the most recent form of alternative funding, focusing on startups. They have high barrier to entry, lack safety and transparency (10% of ICO funds were stolen in 2017, some $600m), and have a 66% failure rate.
From an investor’s perspective:
- Banks rate investors on the total revenues they generate. During an IPO or a bond issuance, the banker is at the center of the equation and will show the deals to the clients who pay them the most, annually, making it hard for Tier 2 and Tier 3 institutions to participate early (and at the best price) in the best deals.
AllianceBlock integrates all the parts of the current financing model that investment banks use (Syndicate, Advisory, Research, Trading, Sales, Rating etc…) into ONE unique platform.
It leverages blockchain technology to provide a safe, transparent, and cheap platform to issue regulated shares and bonds.
The platform is AI-powered. This enables a fair, robust, and unbiased rating of investment opportunities and investors, with fast, seamless, and constant communication between them. With no intermediary, companies and investor interests are aligned. Active Investors are constantly incentivized and they can gain influence, followers, and rewards.
Please introduce the team members. How did you all meet? Which companies have you worked with in the past?
Rachid started investing in ICOs in 2017. A lover of logic, he was surprised at how tedious, cloudy, and unsafe ICOs were. He began thinking of a way to make it simple, secure, and transparent. As his reputation grew in the crypto community, he was admitted to private groups on Telegram where savvy investors discussed the viability and feasibility of ICOs before making investments. This is where he met Matthijs in March 2018, and they started discussing the idea of an all-in-one secure platform that would leverage the knowledge of the crypto community and AI to make better and safer ICO investment decisions.
Rachid and Amber have been friends for more than 4 years. When Amber was a bonds trader, she couldn’t help but realize the complexity and cost of the issuance process, even more so for SMEs. She saw a tremendous opportunity in streamlining an otherwise tedious, long, and expensive process, and she started thinking about a solution to disrupt the traditional financing model. It was around this time that Rachid and Matthijs contacted her to discuss their project.
The more they discussed the idea, the more it became clear that by merging their vision and experience they could build a unique platform to truly disrupt financing. By August, 2018, they all quit their jobs, and AllianceBlock was born.
Rachid started his career as a quant in charge of building default probability and credit risk models for private and public companies, first at BNP Paribas Paris and later at Barclays London. He then switched to be part of the exotic commodities quantitative team at Barclays London.
In 2017, he completed the building and deployment of a highly scalable deep-learning model in artificial intelligence applied to computer vision. His impressive work received accolades from VINCI which commissioned him to help orchestrate the ambitious “smart highways and smart cities” project that combined AI and Blockchain.
Rachid is a venture partner at Alpha Omega Capital focusing on AI startups. He is also part of the Elastos Orchard; its ambition is to become The European Business Development hub for Elastos.
He holds an engineering degree in Computer Science and Signal Processing, and a Masters degree in Probability Theory, Stochastic Process and Quantitative Finance.
Dr Amber Ghaddar:
Previous to AllianceBlock, Amber was a bonds trader at JP Morgan London where she held various leadership positions.
Amber started her career in Global Investment Research at Goldman Sachs, London, and moved from there to the Cross Asset Solution team at JP Morgan, London, in 2012, where she worked on structured and exotic products across Equities, FX, Rates, Credit, and Commodities. She then spearheaded the Macro Systematic Strategies effort at JP Morgan London, focusing on dynamic risk premia trading strategies.
Amber is the mastermind behind participative capitalism and has been invited to world class events to give speeches on the subject. She sits on the advisory board of ODEM, a top 5 blockchain project of 2018 focusing on decentralized education.
Amber holds a B.Sc in Science & Technology, Three Masters (Neurosciences, Microelectronics & Nanotechnologies, and International Business) and a PhD in Molecular Medicine. She is a graduate of McGill Canada and HEC Paris.
Matthijs De Vries:
Matthijs has managed the product development of one of the largest Dutch companies: PostNL. There, he headed several departments, lead an entire software development chain, and built a payment infrastructure before switching companies to lead the development of several unique AI products amongst which was a groundbreaking chatbot.
He has an extensive background as a software developer and has developed a full blown workflow management suite and analytical algorithm in the field of veterinary diagnostics, among various other projects, before growing into a managerial role.
Besides hands-on software development experience and management, Matthijs has founded and managed three other companies, thereby gaining plenty of entrepreneurial experience in the process.
How does AllianceBlock separate itself from other Blockchain-based Investment Banking projects in the space and why should people use this platform rather than the traditional systems in place?
There are not many blockchain based banks, and most are focused on retail banking versus investment banking. Additionally, very few projects have the experience in Tier 1 investment banks that AllianceBlock’s management team has. In most cases, other projects don’t have enough experience across the board to fully understand how financial markets work and what the current users (investors and corporates) need from an investment bank. There are two systems in place that can compete with what AllianceBlock is offering:
First, compared to traditional Tier 2 and Tier 3 investment banks, we offer lower fees, faster processes, and milestone-based financing. Access to deals is transparent and mathematical rather than relationship-based (investment banks show the best deals to clients who pay them the most in fees).
Second, when compared to crowdfunding and crowdlending, AllianceBlock offers end-to-end issuance for both shares and bonds, regulated equity and bond offerings, secondary trading and advisory through a collective intelligence framework.
AllianceBlock has been giving updates on a serverless architecture called Lamda. First of all can you please explain to the community what a serverless architecture is and can you elaborate on why this is best for the platform?
A serverless architecture allows the execution of focused tasks (micro services) without allocating resources (servers) beforehand. This enables an extremely scalable architecture where resources are provided when needed. Ultimately, this means that when tens of thousands of users on the platform perform the same request, simultaneously, the tasks that are executed will be automatically run on as many servers as is needed until all tasks are completed in about the same time it would take if only a single user triggered the task’s execution.
In November of last year, AllianceBlock came out with its MVP, showcasing features such as: investing in listed project, swapping tokens, and interacting with other members, amongst other features. What else will be implemented on the platform in future updates?
Integration of a community module, platform wide, that focuses on working together in sub-communities (ie Telegram or Discord groups). Existing communities can migrate easily to AllianceBlock so they can keep working together with the people they know while having the correct and secure tools at their disposal, making collaboration on projects and due diligence easier, more accessible, and more enjoyable.
Milestone-based financing allows for a live fundraiser for a company to be given funds in a smart contract that is locked in tranches based on pre-agreed milestones. The company initially receives the first tranche, but to receive the second tranche it will need to show a pre-agreed upon deliverable in which the investors would vote. If the investors agree that the company delivered what it was supposed to, the second tranche is released. This allows for continuous monitoring, decreasing the rate of failure and increasing investor returns. If the milestone is not achieved, a second chance is given to the project, however another failure to deliver will imply that the investors will receive back the rest of their investments, therefore minimizing total losses.
Issuance of both tokenized equity and tokenized bonds. AllianceBlock will provide secondary liquidity not only through its local exchange, but also through listings on various crypto and non-crypto exchanges.
Furthermore, investors will have a digital identity (KYC/AML) where we leverage blockchain technology to create an encrypted identity which can only be decrypted by its owner. The investor will then share his unique digital identity with the various corporates looking to raise funds, significantly decreasing costs of due diligence.
The track & trace feature allows investors to study and replicate investments of the highest rated investors. Investments for now are only in cryptocurrency, but soon, investments will be accepted in EUR/GBP/USD and CHF.
AllianceBlock’s Investor onboarding strategy is set to attract over $500mn of SME-ready capital by H2 2021 from crowdfunding alone, and over $2bn including institutional clients. This makes it one of the largest smart crowdfunding communities in the world. How does the platform plan on attracting all this capital in 2 years? What steps are AllianceBlock taking in order for this strategy to be properly executed?
AllianceBlock’s management and advisory team has spent most of their careers in Tier 1 banks as asset managers. The team’s network of clients runs true and deep. Once the platform is in place, many of their previous clients will join, attracted by lower fees, transparency, and access to a unique investment offering.
Additionally, the team will be hiring some of their ex-colleagues specializing in investor relationships and SME coverage.
Can you explain your partnership with Quant Network and how this relates to building on top of Elastos?
The new partnership, announced on December 20th, allows AllianceBlock to offer Quant Network’s Overledger solution to blockchain and non-blockchain companies. Overledger is the world’s first blockchain operating system (OS) that not only connects blockchains to one another but also connects existing networks to blockchain and facilitates the creation of internet scale multi-chain applications, otherwise known as mApps.
Gilbert Verdian, Co-founder and CEO of Quant Network, said: “We are excited to partner with AllianceBlock and have Overledger become a key tool to assist not only Blockchain projects but also SMEs?—?listed on the AllianceBlock platform?—?in advancing their vision.This will allow Overledger to become a mainstream tool, offering an easy access to blockchain, and hence, the democratization of blockchain technology.”
AllianceBlock strongly believes that in the near future, Overledger can support Elastos as a sidechain, but also, Overledger can be used on Elastos Carrier in order to make interoperability easier. One of the applications is multi-chain DEX.
How did you first learn about Cyber Republic and Elastos? What attracted you the ecosystem and technology? What services does AllianceBlock plan to adopt with Elastos?
Rachid has been following Elastos since its public sale. He strongly believes in the smart web and in a true decentralised internet which Elastos will bring to the world. Elastos can and must be part of the new economy. Taking this into account, AllianceBlock can use Elastos to build all of its KYC/AML and digital identity features. Most assets can and will be digitalized, and if AllianceBlock can create a security token standard that will then be validated by the Elastos community and approved by the various financial regulators, AllianceBlock will then be able to process end-to-end issuance of equity shares and bonds using Elastos main chain and sidechains. Additionally, secondary market and multi-chain token swaps can be built on Elastos, as well as the milestone-based financing. AllianceBlock wants to integrate Elastos into its platforms as a cornerstone of its ecosystem.
How does AllianceBlock plan on incorporating with the Cyber Republic? Are there any community-focused projects? Do you plan on creating a suggestion on the Cyber Republic website in order to further fund the project in the ecosystem?
AllianceBlock wants to bring awareness about Elastos and be a business development arm by developing some features on Elastos, but AllianceBlock also wants to help projects implement their ideas/strategies on Elastos, thereby increasing Elastos and Cyber Republic’s overall visibility and global reach.
AllianceBlock banking ecosystem is community-driven. All the projects that are listed on the platform need to be vetted by the community. The community would share its feedback and insight about the project (startup or/and SMEs), and then, by leveraging AI and Collective Intelligence, the project could receive a rating that would highlight its feasibility, viability, and profitability of the project. The higher the rating is, the higher the probability of success. AllianceBlock is not planning to create a suggestion on the Cyber Republic, yet.
To learn more about AllianceBlock, join them at:
MVP: https://portal.allianceblock.io (bug bounty program is still live)
AllianceBlock as explained by Dr. Amber Ghaddar: https://www.youtube.com/watch?v=r-GfFxZhw9Y&t=1s