Chainalysis analytics solutions on Polkadot Relay Network
Beneficiary:Treasury Proposal: Chainalysis x Polkadot
Requested DOT: 1,000,000 DOT
Short description: Project Category/Type: Chainalysis provides data, analytics, and compliance solutions to Polkadot, driving insights that may be helpful for institutional market entry.
Context of the proposal Proposal executive summary: Chainalysis is pleased to collaborate with Polkadot. As the leader in blockchain intelligence, Chainalysis data and software can help Polkadot grow their business compliantly within the institutional market.
Institutional clients fall under the oversight of various global and national regulatory bodies such as the Financial Action Task Force (FATF), the European Securities and Markets Authority (ESMA), and the United States Securities and Exchange Commission (SEC). As guidelines and rules for digital assets evolve and become more definitive, exemplified by frameworks like Markets in Crypto-Assets Regulation (MiCA), entities such as Polkadot need tools and training to ensure regulatory compliance.
For institutional clients, one major requirement before listing a token or building an app is the ability to understand the risk of working with that particular blockchain and be able to monitor and trace its tokens. This includes understanding the level of risk of that ecosystem, determining what controls can help mitigate those risks, and equipping them to fulfill regulatory reporting requirements about investments in its tokens.
Chainalysis is well positioned to provide tooling to Polkadot that helps them enter the institutional market by:
Providing visibility to regulators and authorized institutional prospects of any risky on-chain activity related to the DOT token on the Relay Chain
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A key driver to unlock institutional interest is to ensure good standing with regulatory bodies. This involves taking a risk-based approach and receiving alerts on any risky activity that may be present related to the DOT token on the Relay Chain
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Chainalysis provides the best-in-class data platform when it comes to identifying illicit activity and empowering users to take a risk-based approach
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This is not just about avoiding negative consequences but also about building a reputation as a responsible and law-abiding actor in the digital assets space
Offering on-chain intelligence to authorized institutional clients to meet their requirements related to the listing of the DOT token, which may be related to Investigations, Compliance or Growth use-cases
Collaborating with Polkadot on events, announcements, case studies,, etc that would help spread the word that Chainalysis collaborates with Polkadot and provides compliance software
The Polkadot community intends to leverage Chainalysis software to support the following business goals:
Increase in market capitalization of the network through institutional adoption, specifically by including DOT tokens in the portfolios of these large institutions
Capture a larger market share of institutional market growth in the crypto assets space – as projected by analysts – either via tokenisation or through the development of applications that uses DOT tokens
Grow adoption on crypto markets across the world. As cryptocurrency adoption grows (see our annual Geographies report), Polkadot would like to win a larger stake in the market by positioning its ecosystem one of the safest
Avoid fines and reputational losses by providing a safe and transparent ecosystem where institutions and regulators can monitor risks
Grow in popularity among institutional clients that are building applications in this ecosystem and driving growth of the developer’s community
In order to achieve these goals, Polkadot needs a blockchain analysis solution to help build trust among regulators, institutional customers and prospects, and developers.
For complete proposal, please refer to the following link.
⚠️⚠️This presentation is a continuation of the Chainalysis session that regrettably couldn't be presented in its entirety at the AAG event due to time constraints, resulting in an interruption by the host.
⚠️⚠️ The Chainalysis team has improved some points in the proposal. The changes are:
- 1M DOT instead of 10M USD
- API access. Data surfaced within the Ecosystem Intelligence solution will be made available via API.
- Onboarding from 10 months to 6 months.
- Inclusion of AssetHub in the Onboarding.
- And changes in the phases reducing the deadlines, please feel free to check the proposal
- All changes are highlighted
⚠️⚠️ We've released the AMA video from Chainalysis held on May 13th.
Comments (32)
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Well, Chainalysis' prior clients are mostly enforcement agencies. So, shouldn't these agencies pay for these costs as clients. We are really struggling to see why the Polkadot treasury should bear these costs when it's meant to fund native development, research and outreach. For 10 million (or more depending on future costs) we think we should rather fund development on our own projects. After all, Polkadot is still a blockchain in growth. And this is not counting the full amount required for full 4 phases or yearly maintenance. So. Can we have more details on them? Will phase 2 (MAINTENANCE) be the costs of a yearly maintenance of the infrastructure? How much will it be? What's the schedule of payments for this phase? Token holders should be aware of what the maintenance costs are. Phase 3, which according to the document will come three months after phase 1, doesn't have an amount either. How much will it cost this BI integration? Finally,, phase 4 seems really off-brand as Polkadot is not really an EVM focused chain and won't expand towards that direction, so this phase really seems off. What's the logic of phase 4? We'd also like to hear from the people in Polkadot DeFi as well as other parties whether or not they would like to see Chainalysis purposely and proactively integrated into Polkadot.
Nay, we plead the fifth here. The proposition to allocate 1 million DOT towards practices that inadvertently strengthen the mechanisms of surveillance contradicts the very essence of what we set out to build with Web 3.0. This stark reality serves as a vivid reminder that there are numerous entities willing to engage in surveillance, leveraging the openness intended to foster trust and accountability against the privacy and autonomy of individuals.