The Shyft DAO Business Development Committee submitted a proposal to the Shyft community on August 3, 2022, to grant an aggregate of 10,000 SHFT tokens to crypto exchanges and custodians who integrate to the Veriscope mainnet by September 30, 2022, in order to facilitate a period of free transaction processing to meet Financial Action Task Force (FATF) Travel Rule requirements.
The voting process began on August 4, 2022, and ended on August 9, 2022. A total of almost 2.2 million votes were cast by SHFT token holders on the matter; and 100% of the votes cast were in favor of the proposal. The offer will remain valid until 31 December 2022 or until the VASPs exhaust their SHFT token grant.
The grant will enable exchanges and custodians (more formally known as Virtual Asset Service Providers, or VASPs) to pay the Shyft Network gas fees while using Veriscope, a Travel Rule Solution that focuses on a frictionless implementation with minimum impact to users, whilst ensuring user data privacy and security is maintained.
VASPs use Veriscope by posting requests for information, known as attestations, to the Shyft Network in order to automatically discover counterparty VASPs to a crypto transaction. This enables them to comply with the Travel Rule, which mandates that both the originator and beneficiary VASPs must share personally identifiable information (PII) of their users involved in the respective crypto transactions. When posting a request, VASPs pay the Shyft Network a small fee using Shyft’s native token, SHFT.
The grant will act as a catalyst to accelerate the adoption of the Travel Rule among VASPs on a global basis. This is a significant factor as both the FATF and regulators have raised concern on the slow adoption of the Travel Rule among VASPs.
The automatic discovery process is an underlying Travel Rule infrastructure to solve the current interoperability issues between various Travel Rule Solution Providers. By providing a universal and global way of locating and communicating with VASP counterparties, it is then possible for a VASP to select the appropriate Travel Rule protocol to conduct the PII transfer.
Shyft Network exists to provide an infrastructure that promotes trust on the blockchain. This grant will expedite the resolution of a significant industry issue where non-compliance remains of significant concern and accelerate the ability for VASPs to comply whilst ensuring the data privacy and security of users are not compromised. The network effects should naturally benefit Shyft Network as it proves its usage as a secure and trusted compliance and security infrastructure.
Veriscope is a community-led FATF Travel Rule infrastructure and protocol built on top of the Shyft Network. The solution comprises DISCOVER and SHARE.
DISCOVER allows for secure, frictionless, automated discovery of verified counterparty VASPs with address control proofs. The infrastructure is available to all VASPs and all travel rule solution providers.
SHARE allows for secure, peer-to-peer sharing of originator and beneficiary information between VASPs. No transfer or storage outside the VASPs. It is optimized for data security, privacy, and operational efficiency.
Veriscope was built with input from over 30 VASPs, including Binance, Bitmex, Bitfinex, Coinhako, Deribit, Huobi, and Tether, with advisory and governance leadership from Rick McDonell (Former Executive Director of the FATF).
Shyft Network is a public blockchain protocol designed to aggregate, embed, and leverage trust, validation, and discoverability to facilitate public and private data transfer between permissioned and permissionless networks. By encouraging individuals and enterprises to collaborate, Shyft Network successfully adds a layer of context on top of data, ultimately turning raw data into meaningful information.
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