Parfin’s Ethereum Layer-2 Rayls recently featured in JP Morgan’s blockchain-focused business unit’s EPIC project, highlighting the network’s secure and compliant identity solutions to address privacy needs in regulated financial markets.
Ethereum L2 blockchain privacy solutions from Parfin
JP Morgan’s Kinexys Digital Assets (KDA), the company’s blockchain business unit, Shown United Finance (UniFi) Rayls’ blockchain ecosystem in his EPIC project report. The report explores privacy and identity solutions in the enterprise landscape, with the aim of “illustrating the challenges and opportunities in this area and stimulating industry-wide dialogue and action.”
To achieve this, the KDA team conducted a proof-of-concept (POC) initiative, focusing on four goals: validate enterprise needs around privacy and identity, define the standards required for a scalable identity solution, explore the feasibility of emerging privacy solutions in the market today, and bring together the enterprise and web3 natives to find a viable path forward.
The report indicated a consequence of this matter Parveen Ethereum L2 privacy solution. Rails aims to provide a comprehensive system that “empowers banks to transact privately and with confidence” by integrating privacy, security and governance.
KDA highlighted Rayl’s privacy ledgers, which protect “sensitive data within the organization, with end-to-end encryption and Merkle root certificates that enable confidential interactions.” The report explains that the privacy ledgers are linked through a decentralized blockchain called the “Commit Chain,” which is a shared blockchain for the privacy ledgers to deliver encrypted messages.
This allowed each entity to run its own privacy ledger locally and interact with others through the Atomic Transfer Protocol, which ensures that assets are transferred across the chain correctly “while privacy ledgers maintain independent and confidential records within the network.”
Rayl’s regulatory compliance has also been emphasized, as it has integrated anti-money laundering (AML), know your customer (KYC) and suitability frameworks through attestation services, “to ensure trust and meet institutional requirements”.
The need for identity and privacy solutions
According to the report, the billionaire asset tokenization market is poised for accelerated growth and is expected to reach a multi-trillion valuation in the future. However, it highlights the need to address privacy at an institutional level and develop composable, privacy-representative identity solutions to further develop the industry.
KDA argues that the absence of standardized methods and infrastructure among market intermediaries for identity verification and compliance creates “significant inefficiencies in asset interactions.”
Furthermore, a lack of standardization often leads to redundant processes that fail to deliver the operational benefits that coding promises:
Without these essential elements, the industry’s expansion will remain constrained, especially in attracting traditional investors who expect strong data protection similar to traditional markets.
The report brought some scalability considerations to the Ethereum L2 project, noting that a privacy pool approach of using ZKPs instead of Merkle root certificates would provide greater flexibility to Rayl’s privacy solution. The fundamental throughput of the commit chain was also emphasized, as it is “a critical factor for scaling our system.”
Rails seeks to “bridge the gap between decentralized finance (DeFi) and traditional finance (TradFi)” by supporting banks and other financial entities globally in navigating the complexities of digital asset management.
Ultimately, Parfin co-founder and CEO Marcos Viriato sees “Rayls represents a paradigm shift in the way banks can transact securely and efficiently,” adding that the fintech company “looks forward to continuing to develop solutions that contribute to the future.” “Banking.”
Ethereum (ETH) is trading at $2,920 in the weekly chart. Source: ETHUSDT on TradingView
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