The National Settlement Depository (NSD), Russia’s fundamental securities depository, has developed in addition to successfully tested an e-proxy voting scheme running on a distributed ledger built alongside the NXT distributed cryptographic platform. The project's open-source code is available on GitHub.
The NSD, a fellow member of the Moscow Exchange, is a Russian nonbanking credit organization, Russia’s fundamental depository in addition to a professional person securities marketplace position player. The organisation provides depository, banking small town in addition to relevant services to marketplace position players.
“Over the yesteryear x years, the global fiscal infrastructure has faced the challenges that brand us review the approaches to reliability, safety in addition to performance of information systems,” said Eddie Astanin, chairman of the executive board at NSD. “It is obvious for us that ignoring the rapid evolution of fintech in addition to upgrading the outdated platforms could hinder the stable evolution of the Russian fiscal system. Fortunately, Russian specialists are amidst the most experienced inwards the global fintech industry, in addition to nosotros have got proven this fact yesteryear implementing a fully functional paradigm of e-proxy voting scheme based on blockchain. After testing blockchain for bondholder meetings, nosotros tin give the axe extend the utilisation of this engineering scientific discipline to other trouble concern areas of NSD."
E-proxy voting is an innovative engineering scientific discipline for corporate actions processing that provides for electronic interaction betwixt securities holders in addition to issuers for the purpose of exchanging information in addition to documents. E-proxy engineering scientific discipline was introduced at NSD inwards August 2014. In Apr 2015, NSD upgraded the technology, bringing it inwards draw alongside global ISO standards. In Apr 2016, a blockchain-based paradigm of e-proxy voting was successfully tested for bondholder meetings.
"After our piece of occupation grouping analyzed the utilisation of blockchain inwards several areas of NSD activities, nosotros opted for the automation of the voting procedure at the annual securities holders meetings,” said Sergey Putyatinskiy, information technology Director at NSD. “Over the catamenia of iv months, nosotros managed to develop a working paradigm of the blockchain-based e-proxy voting scheme that has no analogs inwards the world. During the testing process, nosotros reached a submission speed of fourscore voting instructions per second. We are currently aiming to increase the system's capacity in addition to to enable the back upward of novel voting types. Our side yesteryear side footstep would live on to dependent area our novel paradigm to legal in addition to cryptographic practiced evaluation, which volition give us a to a greater extent than definite thought whether the paradigm is suited for existent voting."
The NSD has developed the e-voting scheme inwards partnership alongside DSX Technologies, a distributed ledger engineering scientific discipline companionship based inwards the U.K., operating a engineering scientific discipline stack that enables clients to prototype, exam in addition to implement complex in addition to scalable blockchain solutions securely in addition to inwards the minimum timeframe. The company, which has developed in addition to operates an FCA-regulated environs to merchandise in addition to create create digital currencies, sees big opportunities inwards edifice customized distributed ledger solutions that constitute trust, accountability in addition to transparency piece streamlining trouble concern processes.
Bitcoin Magazine reached out to Alex Yakovlev, caput of decentralized solutions at NSD, in addition to Mike Rymanov, founder in addition to CEO of DSX Technologies, to honour out to a greater extent than almost their innovative e-voting system.
“The short-term destination is to execute a airplane pilot voting,” said Yakovlev. “That volition postulate us to perform safety assessment in addition to create integration alongside existing systems. As a upshot of this exercise nosotros volition sympathise the potential of blockchain adoption yesteryear marketplace position participants in addition to mensurate their trust inwards representative of using our solution. Use of the blockchain engineering scientific discipline inwards the e-proxy voting changes the trouble concern procedure of the voting itself. And similar a shot a grouping of experts including NSDs in addition to external experts are analyzing electrical flow legislation, [to determine] precisely what changes should live on done to create a legal footing for the novel solution. Although the terminal determination is upward to the regulator.”
Yakovlev added that the NSD received several expressions of involvement to exam the e-voting scheme from the fundamental securities depositories of other Commonwealth of Independent US (CIS) countries, also every bit from some major banks. “It is an open-sourced solution in addition to we're opened upward for discussions almost making cooperative projects based on our results,” said Yakovlev.
Rymanov explained the operations of the e-proxy voting scheme alongside the diagram below, where:
- Bondholder passes a vote to a nominal bondholder (NB)
- Nominal bondholder submits a vote to the blockchain
- Counting committee counts the votes in addition to submits the results to the blockchain
- Bondholder tin give the axe verify whether the votes have got been counted correctly.
Rymanov is persuaded that e-proxy voting could honour applications inwards wider contexts, potentially including political elections.
“The engineering scientific discipline nosotros have got developed tin give the axe potentially live on used for full general elections, providing transparency in addition to enabling pregnant savings,” he said. “However, the interrogation that remains to live on answered is how to negate the opportunity of votes beingness sold.”
Rymanov explained that the NSD’s e-proxy voting proof-of-concept (PoC) projection specifications required setting upward a mortal permissioned blockchain where every node participating inwards the network is known, in addition to included a number of specific challenges related to processing capacity in addition to permission-based access to the data. According to Rymanov, other blockchain technologies such every bit Bitcoin in addition to Ethereum couldn’t take in the project’s requirements alongside an out-of-the-box solution, which motivated the alternative of the NXT platform.
“Using the proof-of-work (PoW) Bitcoin blockchain would have got potentially created a province of affairs where a detail node alongside a superior computing might could gain an unfair wages over its peers, thence jeopardizing the safety of the network and, if beingness a malicious actor, could rig the results of the vote,” said Rymanov. “Furthermore, nosotros take in POW systems every bit an unnecessary drain on resources inwards mortal permissioned blockchains.”
“With regards to Ethereum, our squad has been inwards impact alongside the Ethereum gist developers in addition to has been informed that the electrical flow restrain on processing is unopen to sixty transactions per second,” added Rymanov. “However, fifty-fifty though Ethereum offered a huge improvement both inwards functionality in addition to processing speed over Bitcoin blockchain, it did non correspond the NSD requirements.”
“After a careful consideration nosotros have got selected NXT,” Rymanov said. “The proof-of-stake (PoS) blockchain has provided us alongside plenty flexibility to architect a solution that is scalable, stable in addition to alongside processing capabilities good inwards the attain of NSD expectations. In the lab environs nosotros have got pushed DSX fork of NXT to procedure upward to 800 transactions per second. With the custom developed e-proxy voting module running on peak of the NXT fork nosotros have got stabilized the scheme at fourscore votes per second, which is 160 transactions per minute reaching a notable upshot inwards draw alongside NSD expectations.”
Rymanov explained that DSX Technologies won the NSD contract inwards February.
“At that fourth dimension blockchains such every bit Hyperledger or Chain had non been released yet, in addition to because of the tight deadlines our squad had to brand a determination on the engineering scientific discipline nosotros could utilisation that was good relatively developed in addition to could accommodate complex trouble concern in addition to technical requirements also every bit live on scalable in addition to opened upward source,” he said. However, Rymanov explained, “the e-proxy voting engineering scientific discipline nosotros have got developed is blockchain agnostic in addition to tin give the axe live on easily adapted to other distributed ledger technologies that satisfy both safety in addition to processing standards.”
The postal service Russia’s National Settlement Depository Successfully Tests Blockchain-Based E-Voting System appeared outset on Bitcoin Magazine.
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