The 3 Main Components of Katal Chain

On Substrate, The Relay Chain, and The ACTUS Standard

Financial contracts have played a pivotal role in history since the time of the ancient Near East and Chinese feudal kingdoms. Early iterations of debt instruments, insurance contracts, and commercial enterprise endeavors have relied on the intertemporal elements of financial contracting, which have evolved into the modern financial landscape today over thousands of years.

There are three primary components to Katal Chain that we rely on to actualize our vision of a financial ecosystem, unencumbered by conventional points of friction:

A brief overview of each follows.

The technology is built from WebAssembly, Libp2p, and GRANDPA consensus, which power three characteristic features of Substrate chains:

The goal is to render the standard resources for rapid deployment of highly useful blockchains with fast finality, dynamic usage, and of course, interoperability.

The interoperability aspect is also the most compelling reason for Katal Chain’s selection of Substrate. For example, creating a taxonomy of standardized financial contracts requires interoperability between different types of networks. If Polkadot’s parachains are all different strongholds of value with application-specific cases like gaming assets or crypto lending products, Katal Chain needs to be able to interact with them without going through expensive gateways.

Substrate enables the rapid creation of a parachain in Polkadot, which connects various blockchains using its relay chain.

Polkadot’s relay chain is also built with Substrate. The relay chain plays the pivotal role of managing the connections, interoperability, and transfer of value and arbitrary messages between the parachains (i.e. blockchains) in the Polkadot network.

“The relay chain uses a sophisticated governance mechanism that is designed to establish a transparent, accountable and binding process for resolving disputes and upgrading the network.”

Notably, parachains can retain their own, independent governance processes while still participating in the broader network.

ACTUS contract types define classes of financial products and how to express them. The ACTUS framework also provides real-world examples of conventional financial contracts ranging from annuities to perpetual bonds and vanilla swaps.

The comprehensive classification and enumeration of each financial asset type set the stage for incorporating those assets into a public blockchain framework like Polkadot — which can subsequently extend its network effects to other networks. Importantly, ACTUS will operate as an unparalleled repository for crypto-assets and other digital assets running on blockchains that are entirely out of the scope of many DeFi applications and ecosystems today.

We have only begun to scrape the surface of crypto products with basic lending and a few cases of tokenized equities emerging.

By combining ACTUS with Katal Chain, we broach the topic of expressing virtually every type of financial contract available today in a digital ecosystem of seamless value transfer.

The long-term potential is compelling, and Katal Chain can serve as the underlying foundation from which the Web 3.0 extracts practical frameworks for constructing, adjudicating, and expressing financial contracts without intermediaries and across abstract silos of value.

Eventually, we expect businesses, developers, and networks to codify and leverage Katal Chain’s ability to standardize the settlement of contracts ranging from complex derivatives to credit default swaps in blockchain-based economies.

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