Navigating the Digital Asset Landscape-From Blockchain Foundations to Future Tokenization
- 1. NAVIGATING THE DIGITAL ASSET LANDSCAPE AiDAC From Blockchain Foundations to Future Tokenization
- 2. o Distributed Ledger Technology (DLT) and Blockchain o Digital Assets: Classes, Use Cases, and Applications o Tokenized Economy: Size and Growth Estimates by 2030 o Traditional vs Digital Asset Custody Models o Exploring Cryptographic Principles: PKC, Keys, and Wallets o About Advanced Institutional Digital Asset Custody LLC o Risks, Challenges, and Mitigation Strategies for Digital Asset Adoption o Q&A SESSION OVERVIEW 2 AiDAC
- 3. 3 BOBAN PESAKOVIC, M.Eng, CISSP o Mr. Pesakovic is an engineer and founder of consulting firms Advanced E&D and AiDAC. In his present role, he oversees the operational aspects of his consultancies and serves as a principal advisor to private entities and U.S. Federal Government agencies. Over 25 years serving the Engineering sector o Directed A&E for large-scale projects throughout the US, Canada, and Europe. o Extensive experience in Design, Project Management, and R&D o Certified Information Systems Security Professional (CISSP) o Certified Professional Services Engineer (PCNSE, PSE-P) o Certified Network Security Instructor (CNSI, PCSPI) o Professional Master of Engineering, University of Maryland, 2012 o Combined B.Sc/M.Sc in Structural Engineering, University of Niš, Serbia, 2000 AiDAC ABOUT THE PRESENTER
- 4. DISTRIBUTED LEDGER TECHNOLOGY (DLT) AND BLOCKCHAIN 4 o Distributed ledger technology (DLT) is a digital database maintained and updated independently by participants across a distributed network, without reliance on a central authority. o Blockchain is a type of distributed ledger technology where data is recorded in a series of blocks that are securely linked together in chronological order using cryptographic methods. KEY CHARACTERISTICS OF DLT AND BLOCKCHAIN o Decentralization, Immutability, Security, Transparency, Auditability, Consensus ALL BLOCKCHAINS ARE DISTRIBUTED LEDGERS, BUT NOT ALL DISTRIBUTED LEDGERS ARE BLOCKCHAINS. AiDAC
- 5. Permissioned vs Permissionless Blockchains 5 AiDAC DISTRIBUTED LEDGER TECHNOLOGY (DLT) AND BLOCKCHAIN o A permissioned blockchain is a distributed ledger with restricted access, available only to authorized participants. o Permissionless blockchains, also known as public blockchains, are open, decentralized networks that allow anyone to participate in the consensus process for validating transactions and data. SOURCE: MEDIUM.COM SOURCE: RESEARCHGATE.NET
- 6. 6 AiDAC DIGITAL ASSETS: CLASSES, USE CASES, AND APPLICATIONS Category Class Type Examples Primary Use Case Currency Native cryptocurrencies Bitcoin (BTC), Litecoin (LTC), Monero (XMR) Peer‐to‐peer payments, store of value Platform/Utility Smart contract platforms Ethereum (ETH), Solana (SOL), Avalanche (AVAX) DApps, DeFi, smart contract execution Central Bank Issued Assets Currency Central Bank Digital Currencies (CBDCs) e‐CNY (China), Digital Euro, mBridge pilot Official digital state currencies, monetary control Currency Fiat‐backed USDC, USDT, FDUSD Stable payment and settlement Currency Crypto‐collateralized DAI (MakerDAO) Decentralized stable value store Currency Algorithmic (historical) TerraUSD (UST), Frax (FRAX) Algorithmic monetary policies (experimental) Commodity Precious metals Paxos Gold (PAXG), Tether Gold (XAUT) Gold ownership Commodity Other commodities Oil tokens, wheat tokens Trade of tokenized resources Real Estate Property tokens RealT, Propy, SolidBlock Real estate fractional ownership Fixed Income Bonds Societe Generale bonds, European Investment Bank tokenized notes Digital debt issuance and trading Equities Tokenized stocks Historical FTX tokenized Tesla/Apple shares Stock investment via blockchain Environmental Assets Carbon credits KlimaDAO, Toucan Protocol Offset carbon emissions Collectibles Luxury goods (tokenized) Tokenized wine, watches, cars Trade, investment in luxury items Collectible Digital art Bored Ape Yacht Club, CryptoPunks Ownership and trade of digital art Gaming Asset In‐game items and lands Axie Infinity assets, Decentraland, Sandbox Virtual economies, gaming ecosystems IP Rights Music and media NFTs Royal.io (music royalties), Audius NFTs Rights management, creator royalties Certificate Academic, professional credentials Blockchain diplomas, MIT Media Lab certs Secure, verifiable records Derivatives Futures, options dYdX perpetuals, Synthetix derivatives Decentralized derivatives trading Insurance Protection pools Nexus Mutual, Etherisc Decentralized insurance claims Lending & Savings Borrow/lend platforms Aave, Compound, Maple Finance Peer‐to‐peer lending and liquidity protocols Yield Instruments Interest‐bearing tokens stETH (Lido), aUSDC (Aave) Yield farming, staking derivatives Governance DAO governance tokens UNI (Uniswap DAO), COMP (Compound DAO) Voting on decentralized projects and protocols Governance Proposal/voting systems Snapshot (off‐chain voting), Aragon Voting and governance infrastructure Identity Decentralized IDs (DIDs) Sovrin, Microsoft ION, Civic Self‐sovereign digital identities Verifiable Claims Credentials/certificates Learning Machine diplomas, KILT Protocol Trustless verifications Supply Chain and Provenance Supply Chain Tracking assets IBM Food Trust, VeChain, Everledger Traceability, anti‐counterfeiting Machine‐to‐Machine Economy IoT Economy Automated transactions IOTA, Helium Device‐to‐device payments Utility Streaming/payment platforms Audius, Livepeer Decentralized media distribution, creator payments Utility NFT‐driven social media Lens Protocol, Farcaster User‐owned content platforms Philanthropy and Impact Charity Transparent donations The Giving Block, Endaoment DAO Blockchain‐based philanthropy Virtual Real Estate Land NFTs, buildings Decentraland parcels, Sandbox lands Virtual ownership, investment Avatars/Items Wearables, avatars Ready Player Me, RTFKT skins Personalization of digital presence Security Tokens Security Regulated digital securities tZERO platform tokens, INX securities Compliance‐first security token offerings (STOs) Energy and Resource Tokens Commodity Tokenized energy credits PowerLedger, Energy Web Token Energy trading, renewable resource certification DeFi (Decentralized Finance) Infrastructure DeFi platforms and protocols MakerDAO, Curve, Uniswap Open financial services Privacy Assets Currency/Privacy Private coins Monero (XMR), Zcash (ZEC), Haven Protocol Privacy‐preserving transactions Cross‐Chain Assets Infrastructure Bridges and wrapped tokens Wrapped Bitcoin (WBTC), Multichain bridges Interoperability between blockchains Data Marketplaces Data Exchange Tokenized data markets Ocean Protocol, Fetch.ai Monetization and secure sharing of data Identity and Credentials Content and Media Metaverse Assets Cryptocurrencies Stablecoins Tokenized Real‐World Assets Non‐Fungible Tokens (NFTs) Financial Instruments Governance
- 7. 7 AiDAC TOKENIZED ECONOMY: SIZE AND GROWTH ESTIMATES BY 2030 GLOBAL MARKET OPPORTUNITY o BY 2030, THE GROWTH OF BLOCKCHAIN WILL BE MEASURED IN BILLIONS OF USERS AND TRILLIONS OF DOLLARS (1) o TOKENIZATION OF FINANCIAL AND REAL-WORLD ASSETS CAN REACH UP TO $5 TRILLION BY 2030 (1) o BLOCKCHAIN WILL HAVE A SIGNIFICANT IMPACT ON DIGITAL MONEY, FOLLOWED BY GAMING AS WELL AS ART AND COLLECTIBLES (1) o MCKINSEY ESTIMATES FULL DIGITAL IDENTITY COVERAGE IN JUST THE SEVEN FOCUS COUNTRIES THEY ANALYZED COULD ADD 3%-13% TO GDP IN 2030 (1)
- 8. 8 AiDAC TOKENIZED ECONOMY: SIZE AND GROWTH ESTIMATES BY 2030 SOURCE: BCG (2) SOURCE:CITI (1)
- 9. 9 AiDAC o TRADITIONAL CUSTODIANS ARE SPECIALIZED FINANCIAL INSTITUTIONS THAT SECURELY HOLD, SAFEGUARD, AND MANAGE CLIENTS’ FINANCIAL ASSETS WHILE FACILITATING SETTLEMENT, REPORTING, AND REGULATORY COMPLIANCE o UNLIKE TRADITIONAL ASSETS, THE DIGITAL ASSET CLASS DIFFERS IN THAT OWNERSHIP OF A DIGITAL ASSET RELIES ON CRYPTOGRAPHIC TECHNIQUES AND DEPENDS ON UNDERLYING DISTRIBUTED LEDGER TECHNOLOGY (DLT) (3) o WHEN WE REFER TO DIGITAL ASSETS, WE ARE ESSENTIALLY REFERRING TO INTANGIBLE DATA THAT ARE REFLECTED ON A DLT SYSTEM (3) TRADITIONAL VS DIGITAL ASSET CUSTODY MODELS
- 10. 10 AiDAC EXPLORING CRYPTOGRAPHIC PRINCIPLES: PKC, KEYS, AND WALLETS PUBLIC-KEY CRYPTOGRAPHY o PUBLIC-KEY CRYPTOGRAPHY (PKC) IS A SECURE FRAMEWORK THAT USES A PAIR OF MATHEMATICALLY LINKED KEYS TO SECURE COMMUNICATION o PUBLIC KEY: A CRYPTOGRAPHIC KEY ASSOCIATED WITH A BLOCKCHAIN ADDRESS THAT CAN BE SHARED PUBLICLY, USED TO RECEIVE FUNDS OR VALIDATE TRANSACTIONS o PRIVATE KEYS ARE SECRET KEYS USED BY OWNERS OF DIGITAL ASSETS TO “SIGN” TRANSACTIONS (3) DIGITAL WALLET o A CRYPTOGRAPHIC SYSTEM THAT SECURELY STORES PRIVATE KEYS AND INTERACTS WITH BLOCKCHAIN TO FACILITATE THE SIGNING AND VALIDATION OF DIGITAL ASSET TRANSACTIONS o WALLET TYPES: HOT, COLD, WARM, CUSTODIAL, HARDWARE, MULTISIGNATURE, etc.
- 11. 11 AiDAC EXPLORING CRYPTOGRAPHIC PRINCIPLES: PKC, KEYS, AND WALLETS SOURCE: BIGRENTZ.COM (4)
- 12. ADVANCED INSTITUTIONAL DIGITAL ASSET CUSTODY LLC (“AiDAC”) IS A PROVIDER OF ENTERPRISE-CLASS DIGITAL ASSET CUSTODY TECHNOLOGY SOLUTIONS AND SERVICES o Novel system security architecture o Dedicated security hardware o Zero-Trust security model o Warm & Cold multi-signature digital wallet design approach o 24/7/365 threat detection & response o Security as a process o Multiple redundant data centers o Digital asset insurance protection o NIST, ISO, FISMA, and CIS compliance 12 AiDAC ABOUT ADVANCED INSTITUTIONAL DIGITAL ASSET CUSTODY LLC
- 14. RISKS, CHALLENGES, AND MITIGATION STRATEGIES FOR DIGITAL ASSET ADOPTION 14 RISKS & CHALLENGES (1) o FRAGMENTED REGULATORY LANDSCAPE o ELEVATED CYBER RISK o INTEROPERABILITY ISSUES o REAL-WORLD LIQUIDITY RISKS o FRAUD & FINANCIAL CRIME o LACK OF EXPERIENCED CUSTODIANS MITIGATION o PROACTIVE REGULATORY ENGAGEMENT o COMPREHENSIVE RISK, SECURITY AND TECHNICAL CONTROLS o DIVERSIFICATION o EDUCATION & ONBOARDING AiDAC