Investment Operations

LiquidShare, Consensys Collaborate on Post-Trade Blockchain Venture

Digital Asset Custody and Servicing

LiquidShare has confirmed that its European post-trade settlement infrastructure for shares in small and medium sized enterprises (SMEs) has entered into a partnership with ConsenSys’ PegaSys team. 

PegaSys said it is developing, from the ground up, a Java-based enterprise version of the Ethereum client, Pantheon, with greater transaction throughput, privacy, and specialized validation features beyond what the Ethereum 1.0 base layer can presently offer. 

Over the past year, LiquidShare has worked to produce a private and permissioned platform built on Ethereum with the business logic coded in smart contracts to model their cash, security, and delivery versus payment mechanisms. Analysts say the usage of the blockchain allows a peer-to-peer to settlement between custodian nodes for listed and non-listed shares, removing friction costs and providing transparency to SMEs. 

With the help of ConsenSys, multiple blockchain clients were tested. LiquidShare successfully executed pilots with 15 financial institutions, including BNP Paribas and Société Générale as custodians, at the end of 2018.

By selecting and partnering with PegaSys, LiquidShare intends to take advantage of Pantheon’s advanced enterprise features and enter its production phase at the end of 2019. “We have very stringent requirements in terms of performance, privacy and security as we are building a regulated entity operating a private blockchain to register and settle in the private and public markets,” said Thibaud de Maintenant, CEO of LiquidShare. “PegaSys’ blockchain offering will help us achieve scalability and finality in this stringent regulatory environment,” he added.

De Maintenant said all LiquidShare services will be fully compatible with Ethereum, a central point in the open source blockchain community, which is pioneering the asset tokenization and digitization space.

“We are building the gold-standard for enterprise blockchain that can support multiple use cases in a private blockchain, and also have the possibility of leveraging the advantages of the public Ethereum blockchain,” said Daniel Heyman, PegaSys Program Director. “LiquidShare is one of the most advanced use cases in the financial industry, and we are excited to work with them on bringing production systems to market.” 

Industry response to the collaboration was positive. “LiquidShare is an industry-changing technology for equities markets and a powerful example of Ethereum’s enterprise-readiness,” commented Joe Lubin, founder at ConsenSys, on the announcement. “The collaboration with PegaSys shows the power of Pantheon, its enterprise features, and the growing interest in using an Enterprise Ethereum built for mainnet compatibility,” added Lubin.