Voting | Palmyra: RWA Lending on Nervos

The following proposal comes from the CKB Community Fund DAO and is currently in the voting (VOT) stage. According to the rules of the DAO, this proposed amendment to the meta-rules needs to receive at least 17,900,829 votes by June 18th and have a favorable vote ratio of over 51% to pass.

Therefore, whether you are in favor or against, you are welcome to visit the Metaforo platform and cast your valuable vote 👇

https://dao.ckb.community/thread/vot-palmyra-rwa-lending-on-nervos-53119

Here are the main contents of the proposal:

Summary#

This is a proposal submitted by ZenGate to the CKB Community Fund DAO, aiming to introduce Palmyra RWA and its lending products to Nervos CKB. This proposal has received recommendations from Nervos Nation.

Funding activities include:

Establishing a reputation system and a producer/consumer client approval system based on DID (.bit).
Building an RWA lending platform on Nervos CKB, allowing users to participate in lending with real-world commodity producers.

Expected completion time: Q4 2024

Funding amount: $100,000 (CKB price: 0.016759, requested CKB amount: 5,966,943.14)

Introduction#

The tokenization of real-world assets (RWA) is expected to become the cornerstone of the future blockchain industry, providing unprecedented opportunities for growth and innovation. ZenGate is developing Palmyra, a recently launched RWA commodity trading platform on Cardano and Ergo, both of which are members of the UTXO Alliance along with Nervos. This proposal aims to promote a strategic partnership between ZenGate and Nervos Nation to introduce Palmyra to Nervos CKB and jointly carry out marketing activities.

Palmyra is a product that uses blockchain technology to address many of the current challenges in the global supply chain.

Inefficient supply chain: The proliferation of intermediaries increases costs for producers and buyers, reducing profits. Palmyra simplifies the supply chain by enabling direct sales and on-chain payments, eliminating intermediaries and significantly improving efficiency and profitability.
Logistics challenges: Complex and inefficient logistics hinder the transportation process of products from producers to distributors. Palmyra uses batch shipping to streamline logistics and reduce costs, while leveraging on-chain tracking to enhance traceability.
Lack of traceability: The lack of traceability of origin can lead to product fraud and concealment of production sources. Palmyra ensures full traceability from production to sale by providing immutable on-chain records for each step of fulfillment and manufacturing processes, ensuring the authenticity of products.
Exploitative lending: Due to the lack of proper financing options in third-world countries, producers are forced to borrow from high-interest lenders at rates of 30%-50% per year. Palmyra sources resources from global DeFi pools to provide borrowers with more competitive loan options and offer excellent returns to lenders.
Identity and reputation: Underdeveloped regions often lack verifiable identity and reputation systems, hindering their access to financial services. Palmyra is building an on-chain identity and reputation system that allows producers to establish verifiable financial histories, enabling them to access better global financial services.

Current Status#

Palmyra is already operational, offering spot trading that allows early adopters to complete orders directly without additional intermediaries. Other forms of trading, such as trade financing, are under development with the goal of releasing a test version in Q4. Logistics is also progressing with the on-chain traceability being implemented using the Winter Protocol (click here to read the open-source documentation) and plans to release additional data visualization tools by the end of 2024. Identity and reputation are currently in the research and development phase, with the goal of being released in Q4.

For more information about Palmyra, please visit their website.

ZenGate Leadership Team#

The ZenGate leadership team consists of experienced professionals, including:

Dan Friedman (CEO): Dan is an experienced technology expert and a founding team member of the Cardano blockchain. He also serves as a strategic advisor for the Ergo Foundation and several other blockchain projects.
Sam Lambert (COO): Sam is an economist who studied under former board member Bob Gregory of the Reserve Bank of Australia. He has worked as a management consultant at Oliver Wyman, focusing on topics in the financial services, insurance, and telecommunications sectors. His last position at Oliver Wyman was as the Head of the Global Blockchain Practice, where he helped incubate and establish multiple markets.
Nicholas Despopoulos (CBO): With over 20 years of experience in cross-jurisdictional trade, asset management, and tax strategy, Niko is a serial entrepreneur in the coffee, tea, wine retail, and distribution space. He currently leads sales and business development functions for the Palmyra platform.
Lamon Rutten (Advisor): With over forty years of experience in the commodities sector, Lamon has held important positions such as former Director of the United Nations' Division of Commodities, CEO of the Indian Commodity Exchange, and CEO of the Indonesian Commodity and Derivatives Exchange.

For more information about the ZenGate team, please visit their website.

ZenGate Technical Leadership Team#

The ZenGate technical team consists of experienced professionals, including:

Luca D'Angelo (Chief Blockchain Engineer): One of the lead developers of the Winter Protocol. He has deep expertise in smart contract development and has served as the founder/lead developer of GuapSwap, Lilium, ErgoPad (a leading launchpad), Phoenix Finance, Blitz TCG, and EXLE. He has a background in computer science and physics from McGill University.
Shishir Pai (Blockchain Developer): One of the lead developers of the Winter Protocol and an early builder on Cardano. He also has experience building the Alephium blockchain. He is an experienced backend and smart contract developer, having served as the founder of Lilium and ErgoSapiens, and providing development support for Phoenix Finance and ErgoNames (a decentralized DNS platform).
Jonathan Wynne (Senior Full Stack Developer): Jonathan has over 20 years of technical work experience, having worked with leading financial institutions, fintech companies, and Web3 companies. Some notable companies he has worked with include Nomad (YC S21), Credit Suisse, and Barclays Bank.
Alexander Chepurnoy (Technical Advisor): Co-founder of the Ergo blockchain and smartcontract.com (now Chainlink). As a researcher and manager of the Scorex project, he was one of the first employees of IOHK. He has been active in the blockchain field since 2011 and has written over 20 academic papers for the industry.

For more information about the ZenGate team, please visit their website.

Key Benefits to Nervos#

Collaborating with ZenGate to bring Palmyra to Nervos will bring several advantages to the Nervos ecosystem:

Integration of reputation system: Palmyra will build its reputation system on Nervos' DID (based on DID, .bit) to achieve digital identities with KYC verification. These identities will form the trust foundation for modern financial service products in these countries.
High-yield lending opportunities: Palmyra's on-chain RWA lending opportunities will attract capital and users to Nervos with highly competitive stablecoin interest rates, which are typically unavailable to retail investors.
DeFi alliance: Palmyra's lending opportunities will complement existing DeFi initiatives on Nervos, such as iCKB, RGB++, and Khalani, providing compelling use cases that will further benefit from Nervos' low transaction fees.
Utilization of Nervos DAO liquidity: This collaboration will create opportunities for the $200 million deposits in the Nervos DAO. These funds currently have low liquidity, but with the upcoming launch of iCKB in the coming months, liquidity will be improved.
Support for BTCKB narrative: The project aligns perfectly with the BTCKB narrative. In the future, Bitcoin users will be able to access valuable lending opportunities through DeFi markets built on protocols like RGB++. Palmyra's inclusion allows us to promote RGB++ as a solution to bring RWA lending opportunities to Bitcoin.

The opportunity to revolutionize supply chains with blockchain has been praised in every publication discussing the true potential of this cutting-edge technology. Fifteen years after Satoshi Nakamoto first introduced us to blockchain technology, it has finally matured enough to take on this challenge. This initiative aligns perfectly with the strengths and plans of Nervos CKB, helping it maintain its current momentum and trajectory while showcasing the value of the UTXO Alliance in supporting globally scalable products.

Technical Overview#

The Palmyra platform operates on multiple blockchains, utilizing both on-chain and off-chain components. The following section provides an overview of the DID+KYC system and the RWA lending platform to be built on Nervos.

Implementation of DID+KYC#

Palmyra will use the .bit implementation of DID to enable decentralized, KYC-verified digital identities (DID+KYC). Trusted partners will manage the KYC verification process off-chain, and Palmyra will issue on-chain verifiable DID+KYC credentials. Verified users will retain ownership of their DID+KYC, while Palmyra will retain administrative control through DID smart contracts to ensure the integrity of KYC data and the ability to revoke it in case of errors or fraud. This on-chain process provides a transparent, publicly accessible foundation of trust and financial inclusivity while preserving the KYC required for compliance.

Implementation of RWA Lending#

The RWA lending platform on Palmyra facilitates convenient loans backed by real-world assets. On-chain smart contracts handle the issuance, repayment, and tracking of loans using Palmyra's lending protocol. Off-chain trusted third parties manage the physical goods in transit and publish verifiable tracking data on-chain as the goods move through the supply chain. The Palmyra platform serves as an aggregation point for all parties involved in on-chain lending. The lending protocol on Palmyra incorporates verifiable on-chain DID+KYC identities and their sales and lending activity history for risk assessment by lenders. Initially, loans can only be filled through Palmyra, but the lending protocol is designed to be open in the future. This will allow any complementary dApp or intention protocol to directly interface with the CKB lending contracts. This means that Palmyra loans can be issued and filled through a permissionless global secondary market and attract liquidity sources from any blockchain connected through CKB.

Budget and Milestones#

ZenGate is requesting a total funding of $100,000. This funding will support the development of Palmyra's DID-based reputation system, the implementation of the on-chain lending module, support for its long-term development, and joint marketing efforts between ZenGate and Nervos Nation. Upon approval of the proposal, an initial payment of $10,000 will be made, followed by 30% of the funds after the completion of each milestone.

Milestone 1: Development and Deployment of DID-based Reputation System#

The first milestone involves the development and deployment of a decentralized identity (DID)-based reputation system on Nervos. This system will enable KYC-verified digital identities, fostering trust and transparency within the ecosystem. This milestone will be carried out in parallel with Milestone 2.

Milestone 2: Finalize Technical Integration Plan#

The second milestone focuses on finalizing the technical integration plan for Palmyra on Nervos. This will involve a comprehensive assessment of the platform to integrate the lending module, establish necessary payment channels for stablecoins and tokens, and incorporate CKB-based standards for future compatibility with protocols like RGB++.

Milestone 3: Implementation and Launch of On-Chain RWA Lending Platform#

The final milestone is the implementation and launch of the on-chain RWA lending platform on Nervos. This will include the development of the lending protocol, integration with Nervos' DeFi infrastructure, and the creation of user interfaces for borrowers and lenders on Palmyra.

Conclusion#

Palmyra is the opposite of a meme coin. It is a project with practicality that brings the benefits of blockchain to the real world in a meaningful way. By building on CKB, it will bring additional usage and demand to the Nervos blockchain. The launch of RWA lending will create new DeFi use cases and opportunities for users. It will introduce a mature team with a wealth of knowledge into the CKB developer community, driving CKB's development through new identity and lending protocols, and laying the foundation for more partnerships and collaborations.

The community has repeatedly called for highly innovative projects to be built on CKB, and Palmyra is a project that meets that standard. It is an important step for the UTXO Alliance and cross-community collaboration, paving the way for more projects and communities to come to CKB. Nervos Nation fully supports this proposal and is committed to the continued cooperation and development of the CKB ecosystem.