Jiritsu Network aims to revolutionize the tokenization of real-world assets (RWA) by streamlining off-chain asset registration, verification, and tokenization. To encourage broader adoption of blockchain technology, Jiritsu focuses on reducing transaction costs, improving economic efficiency, increasing transparency, and offering world-class security by utilizing bleeding-edge cryptographic technologies. At its core, Jiritsu focuses on mirroring and verifying assets to enhance visibility, transparency, and verification. The platform ensures real-time automation and refresh capabilities, enabling robust DeFi and tokenization processes.
The heart of Jiritsu Network's innovation lies in its ZK MPC Cloud, a revolutionary technology that has processed over 6 million proofs in its short history. This robust platform offers Proof of Workflow (PoWF), powered by advanced computational engines and a sophisticated workflow manager, which together ensure secure and efficient orchestration and verification of computational processes. The technology provides optimal security, supported by proprietary and patent-pending innovations that safeguard user data and transactions.
The ZK MPC Cloud's offerings include Jiritsu RWA, Jiritsu ZKMPC, Jiritsu AI, and Jiritsu Proof, catering to a wide range of needs within the blockchain and financial technology landscapes. Jiritsu Network's ZK MPC Cloud technology has been applied in several practical and impactful ways across various industries. One notable use case is providing proof of inventory for a leading Amazon supply chain company, which manages over 100,000 SKUs and $20 million in products daily. This application showcases the technology's capability to handle large-scale operations efficiently and securely. The partnership with Brinks to verify gold reserves and other RWA in custody further underscores Jiritsu's commitment to asset integrity and security.
Additionally, Jiritsu's ZKMPC oracle offers advanced functionalities such as calculating weighted averages, performing functional computations, and maintaining confidentiality with ZK capabilities. These features are consumed by DeFi protocols to ensure precise and secure transactions, making reading and writing on the blockchain highly cost-effective. This allows decentralized applications (dApps) to act as gatekeepers to data and content, driving value into the utility token that supports verification and truth.
The Jiritsu platform's flexibility allows for the creation of provers for any business logic, data readers, and smart contract integration. This adaptability ensures that Jiritsu can provide robust and tailored solutions for a wide range of business needs, including the recent BTC and ETH spot ETFs. By verifying Total Assets Verified (TAV) and the value locked by real-world assets (TVL), Jiritsu provides comprehensive solutions for asset verification and brings verified BTC amounts in ETFs on-chain, enabling innovative financial solutions that offer unparalleled transparency and reliability.
BTC ETFs and Jiritsu’s New Role
Exchange-traded funds, or ETFs, have become one of the most prominent vehicles for investors to allocate to public markets over the last few decades. ETFs have become increasingly popular due to their low cost, liquidity, and passive access to investing in various investment subsectors throughout markets. Last year, $975 billion of assets were poured into ETFs as equity markets surged, reaching a total of more than $8 trillion AUM in 2023.
The market has recently been granted several Bitcoin ETFs after a long stand-off between filers/prospective issuers and the SEC. Since launching in March 2024, these ETFs have become some of the most successful launches of financial products of all time. Before diving into the Bitcoin ETFs and how Jiritsu fits in, let’s briefly overview the general history of ETFs as we know them today.
The origin of ETFs can be traced back to the rise of passive investing and indexation over decades. The original index dates back to the late 1800s, with the Dow Jones becoming popular, originally called the Dow Jones Railroad Average, before eventually expanding to cover other market subsectors. This index served as a way to measure the overall stock market, which in effect served as a reflection of the US economy’s performance. Fast forward to 1924, markets were given the first mutual fund with the Massachusetts Investors Trust. These investment vehicles served as a way for investors to get exposure to an actively managed pool of capital in a public market wrapper, including assets that mostly contained lower-risk profiles such as large-cap stocks or fixed-income instruments.
Today, mutual funds are among the most popular investments worldwide, especially among Americans. As of 2023, assets under management by mutual funds were $63.1 trillion, with the United States accounting for almost 40% of that.
The first US ETF, as we know it today, was launched in 1993 by State Street and was called the SPY, which tracked the S&P 500 stock index. At the time, ETFs made up just 1% of global stock trading volumes, a minuscule number compared to the 25-30% of trading volumes that they’ve traded in recent years. This drastic growth was partially led by the launch of new ETFs being launched for various subsectors.
The early 2000s sparked an influx of innovation in the ETF space, including ETFs that offered exposure to various assets such as commodities like gold (GLD) which launched in 2004, real estate, volatility, currencies, and even inverse products to bet against asset prices. Below we can see a brief history of exchange-traded funds and product launches, once again from Investopedia:
Fast forward to Q1 2024, ETFs are significantly expanding Bitcoin's accessibility to a wider audience, including individual investors, financial advisors, and institutional capital allocators. This increased access is anticipated to drive broader acceptance of Bitcoin over time. Recent data from River Financial reveals that Bitcoin ETF providers and funds now hold around 4% of Bitcoin's circulating supply, surpassing the holdings of publicly traded miners (3.4%) and businesses (3.6%). However, given the unique custodial requirements of a decentralized digital asset like BTC, is a standard ETF “wrapper” sufficient? Or are there ways of leveraging the benefits of blockchain technology to improve the transparency, security, and provenance of such a product?
Tracking ETF Flows
Research highlights that ETF flows can significantly impact the prices of underlying assets and overall market stability. This makes the accurate tracking of ETF flows essential for understanding overall market dynamics and investor sentiment. For example, ETF flows have been linked to shifts in asset valuations and investor behavior, emphasizing their importance in financial analysis.
Additionally, reports indicate that ETF flows can impact underlying constituent share prices and that equity ETFs have seen continuous weekly inflows, further underscoring their influence on the market.
Traditional institutional Bitcoin ETFs do not report on-chain, creating a transparency gap. Jiritsu pioneers on-chain ETF reporting, offering real-time data and greater transparency, which are crucial for both investors and market regulators. This innovation ensures accurate and timely information, reducing misinformation risk and enhancing trust in the financial system.
Jiritsu’s Layer 1
The Jiritsu blockchain introduces a transformative approach to tokenizing RWAs by integrating Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC). This L1 solution ensures secure and private verification of asset details while embedding regulatory compliance and asset integrity into digital tokens. Its innovative use of cryptographic methods and user-friendly transaction processes look to set a new standard in asset tokenization and improve upon the traditional ETF approach when it comes to BTC and ETH.
BTC and ETH ETFs bring significant liquidity to the market by making these digital assets available to traditional markets and investors. They provide a gateway for institutional and retail investors to participate in the cryptocurrency market without directly holding the underlying assets. However, these ETFs lack the transparency of on-chain data, which can provide more detailed insights into asset movements and ownership. Jiritsu addresses this gap by enabling on-chain reporting and verification, which supports DeFi applications and enhances overall market transparency.
Jiritsu's ZK proofs provide strong assurances to third parties, including ETF brokers and custodians, while maintaining the privacy of client balance distribution. Jiritsu further enhances this model by introducing a second layer of delegation to a "ZK Robot," automating the decision-making process without human intervention while maintaining ZK cryptography security.
ZK-MPCs
Before understanding Jiritsu’s role in tokenization, it’s critical to understand the role of ZK-MPC in the process. ZK-MPC oracles aggregate data from multiple sources and verify the computations involved. This ensures the data's security and accuracy and the processes used to compute values. The reliability of data verification enhances the overall trust in the system.
Jiritsu ZK-MPC oracles employ versatile data retrieval mechanisms, enhancing integration depth and security. The "push" mechanism involves data providers directly sending information to the oracle, which can pose risks if the provider's integrity or security is compromised. Conversely, the "pull" system allows the oracle to fetch data directly from integrated systems via APIs, such as supply chain software or banking information systems. This method offers deeper integration and reduces risks since compromising the data requires breaching these robust systems.
In scenarios involving IoT devices, such as cameras monitoring inventory, ZK-MPC oracles can securely aggregate and verify data from these devices. This reduces the likelihood of data tampering and enhances the trustworthiness of the reported data. The integration with IoT devices ensures real-time, accurate data collection and processing.
ZK-MPC not only secures data but also provides transparency in the data handling process. The chain of custody for data can be audited, allowing end-users to assess the level of trust provided by the system. This transparency doesn't necessarily increase trust beyond existing systems but offers a clear audit trail for verifying data integrity.
Tokenization with Jiritsu Proof
Tokenization has emerged as a pivotal mechanism within the cryptocurrency sphere, offering a bridge between traditional assets and digital markets. At a high level, the Jiritsu proof for tokenization method involves the following steps:
- User register on the Jiritsu blockchain platform
- Choose an asset for tokenization
- Submits asset details for verification
- ZK-MPC verifiers analyze and extract asset value
- Cryptographic proof generated and stored on the blockchain
- Tokenizer claims a proof, embedding it into a smart contract
- The token represents asset ready for transactions
- The user conducts transactions or exchanges tokens
The entire Jiritsu process begins with users registering on the Jiritsu platform and selecting the asset they wish to tokenize. Once the asset details are submitted, ZK-MPC verifiers analyze and extract the asset's value and compliance status. Each node in Jiritsu’s network runs an operating system powered by computational engines and a workflow manager that delivers Proof of Workflow (PoWF).
This analysis involves two types of verifiers: one that scrutinizes business policies and regulatory compliance, and another that handles financial data, performing tasks such as spot price retrieval and complex mark-to-market evaluations. This dual verification approach not only facilitates tokenization but also enables real-time valuation adjustments, which is crucial for maintaining transactional relevance and integrity.
After verification, cryptographic proofs are generated and stored on the blockchain. These proofs encapsulate all verified information, ensuring confidentiality and security. The blockchain acts as an immutable repository, recording these proofs permanently, thereby enabling public verification of an asset’s value and policy adherence without exposing sensitive details. Tokenizers then claim these proofs, embedding them into smart contracts to create tokens ready for transactions. These tokens carry cryptographically secure proofs of the asset's value and compliance, making them suitable for use in transactions on other blockchains or exchanges.
Tokenization Example
To better understand the process, let’s walk through an example. okenizing gold. Gold (PAXG) tokens are the leading example of tokenized gold, such as Paxos, which resulted in Paxos. Let’s look in detail at how an entity like Paxos “brings gold onchain” and what benefits Jiritsu can offer to the process.
To start, Paxos initiates the tokenization process by acquiring gold from a reputable gold exchange. This initial step ensures the asset backing the digital token is tangible and of verified quality. Once purchased, Paxos deposits the gold with a custodial service, such as Brinks. This custody arrangement guarantees the physical gold is securely stored and managed by a trusted third party.
Next, users of the Jiritsu platform can create a Verifier using the Jiritsu dApp available on supported blockchain networks. This step is crucial as it initiates the process of linking physical assets with their digital counterparts. The Verifier operates on Zero-Knowledge Multi-Party Compute (ZK-MPC) nodes. This technology ensures that sensitive information remains confidential while computations are performed. Verifiers may also include an automation feature to update information at preset times daily or on-demand, enhancing the efficiency and reliability of data updates. ZK-MPC nodes then retrieve detailed information about the gold stored by Brinks. This step is essential for maintaining transparency and trust in the tokenization process.
The verification process involves ZK-MPC nodes, which are responsible for off-chain verified computations. These nodes utilize zero-knowledge capabilities, allowing for different tiers of access and secrecy, thereby maintaining flexibility and security. For instance, an auditor might have full access to all information, while an asset manager might only see specific details relevant to their role. Automation is a key feature of this process, enabling verifications to occur regularly, such as once a day, every 15 minutes, or on-demand as required. This represents a significant improvement over Paxos's current practice of manually verifying inventory once a quarter.
Once the verification proof is written to the Jiritsu Layer 1 blockchain, Paxos proceeds with the tokenization process. Paxos mints a PAXG token on a blockchain of their choice, such as Solana, Avalanche, or Binance Smart Chain (BNB). The minting process converts the physical asset into a digital token that can be traded and managed within the cryptocurrency ecosystem.
Paxos acquires the proof from the Jiritsu Layer 1 ledger by compensating the user who created it, facilitated through the Jiritsu dApp. The dApp interface facilitates the acquisition of exclusive rights to the proof, with the entity that created the proof receiving compensation. A portion of this revenue is allocated to the network, while the remainder goes to the service provider responsible for creating the proof.
The entity that created the proof shares the revenue received from Paxos back into the network. This revenue-sharing model promotes active participation and supports the ecosystem's growth.
Consumers purchasing a PAXG token receive a token containing the proof of the underlying gold. They can use this proof to access detailed information and verify the gold's custody status on the ledger, potentially paying a fee for this service.
Jiritsu vs. the Competition
Jiritsu ZKMPC Cloud excels in supporting RWAs through its programmable nodes that facilitate data retrieval, automation, and complex computations. Jiritsu's technology integrates multiple functions into a single, cryptographically proven process. This includes detailed proofs of value such as policy, ownership, payment history, and complex pricing. By writing directly to its own Layer 1 on the Avalanche subnet, Jiritsu eliminates the need for bridges, offering a cost-effective and secure solution. This setup is particularly beneficial for institutions and asset managers seeking flexibility and scalability. The end result is a flexible and scalable solution, allowing direct tokenization on the Avalanche subnet and significantly reducing risk and cost.
Comparing Pyth Network and Chainlink
Both Pyth Network and Chainlink also support RWAs but with different strengths and limitations. Pyth focuses on providing high-frequency financial data by aggregating information from various financial institutions, resulting in robust price feeds. However, Pyth's reliance on bridges for cross-chain data transfers introduces additional complexity and costs.
Chainlink, known for its broad integration capabilities, supports RWAs through its extensive network of node operators across multiple blockchains; however, adding anything beyond a simple data feed is fraught with friction and complexity. Despite its flexible data sourcing, Chainlink is the most expensive option due to the overhead of compensating node operators in a competitive market. Furthermore, Chainlink lacks its own chain, which means it depends on bridges for data transfer.
Platforms Benefiting from Jiritsu
Leading platforms in the tokenization and digital securities marketplace, such as Securitize, Republic, Oasis Pro, and Maple, prioritize regulatory compliance. Securitize and Oasis Pro offer comprehensive solutions for issuing, managing, and trading tokenized securities, ensuring adherence to securities regulations. Republic democratizes private investment opportunities, enabling retail investors to participate in funding rounds traditionally reserved for institutions. Maple focuses on decentralized finance, particularly institutional lending and on-chain credit assessment.
These platforms benefit from Jiritsu's advanced verification and transparency capabilities, which add proof of RWA value and assets to these platform’s tokenization, regulatory compliance, and operational efficiency. Jiritsu's programmable and cryptographically proven processes for data retrieval, automation, and complex computation make it an ideal partner for these tokenization and digital securities marketplaces. The integration of Jiritsu's technology enables these platforms to offer secure and transparent asset verification, aligning with their compliance needs.
Enhancing Asset Management with Jiritsu
Ondo and other asset managers can significantly benefit from Jiritsu's advanced verification and transparency capabilities. Ondo's system involves acquiring assets like BUIDL and fiat currency to create ETF-like products, which are held in custody by Coinbase and a fiat bank. OUSG is a tokenized security backed by the SHV ETF, providing users with exposure to short-duration US Treasuries. A notable attribute of OUSG is that it is a permissioned token, meaning only addresses whitelisted by Ondo can mint, transfer, or receive it. Since its launch in January 2023, Ondo Finance has become the second-largest RWA issuer in the tokenized treasuries and securities market, trailing only Franklin Templeton.
Ondo markets itself as a general partnership selling limited partnership interests via tokens, which lowers entry barriers for investors. The entry barrier for investors is significantly lowered compared to traditional methods on platforms like Securitize, which typically require a minimum investment of $5 to $10 million.
However, Ondo's reliance on self-reports and annual audits for verification is relatively inadequate. Jiritsu enhances this process through its ZKMPC Layer 1 technology, providing advanced verification and transparency. Jiritsu's verification process is automated and can be scheduled for intervals ranging from daily down to minute-by-minute. This contrasts sharply with Ondo's manual verification processes, providing a more robust and reliable system. In this setup, the asset manager using Jiritsu’s solution handles marketing, customer service, compliance, and tokenization, with all necessary infrastructure provided by Republic.
By integrating with digital funds like BUIDL and platforms such as Republic and Oasis, Jiritsu enables asset managers to offer more secure and transparent products. This integration makes it straightforward for asset managers to implement similar solutions, providing robust and efficient tokenized asset products while improving compliance and operational efficiency.
Conclusion
The Jiritsu Network stands at the forefront of blockchain innovation, effectively bridging the gap between traditional assets and the crypto world. By leveraging advanced technologies like Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC), Jiritsu ensures robust security, transparency, and efficiency in tokenizing real-world assets (RWA). The ZK MPC Cloud, a cornerstone of Jiritsu's platform, has demonstrated its capacity to handle large-scale, secure computations, making it a reliable solution for businesses and financial institutions alike.
Moreover, Jiritsu's innovative approach to tokenization, utilizing cryptographic methods to ensure the privacy and integrity of asset details, sets a new standard in the blockchain space. The platform's adaptability allows for the creation of custom provers, smart contract integration, and seamless transaction processes, making it a robust solution for diverse business needs. This is particularly relevant in the context of the burgeoning ETF market, where Jiritsu's technology can enhance the transparency and security of Bitcoin ETFs, which have recently gained significant traction.
The Jiritsu blockchain's ability to integrate regulatory compliance and asset integrity into digital tokens is a game-changer, ensuring that tokenized assets meet the highest standards of verification and security. The platform's use of ZK proofs to provide strong assurances to third parties, including ETF brokers and custodians, while maintaining client privacy exemplifies its commitment to security and trust. Additionally, the introduction of MPC wallets and ZK Robots further automates and secures the decision-making process, eliminating human error and enhancing overall system reliability.
Jiritsu's comprehensive tokenization process, from user registration and asset verification to the creation of cryptographically secure tokens, ensures that assets are accurately represented and easily transactable on the blockchain. The revenue-sharing model and cost-effective infrastructure, supported by the JIRI utility token, incentivize participation and ensure the platform's sustainability. This economic efficiency broadens the platform's appeal and utility across various applications and user groups.
As the market for digital assets and tokenization continues to grow, Jiritsu Network is well-positioned to seize the opportunity presented by asset tokenization. By setting new standards in security and operational efficiency, Jiritsu is not only revolutionizing the tokenization of real-world assets but also paving the way for the next generation of digital finance.
Disclaimer: This report was commissioned by Jiritsu. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
Jiritsu Network aims to revolutionize the tokenization of real-world assets (RWA) by streamlining off-chain asset registration, verification, and tokenization. To encourage broader adoption of blockchain technology, Jiritsu focuses on reducing transaction costs, improving economic efficiency, increasing transparency, and offering world-class security by utilizing bleeding-edge cryptographic technologies. At its core, Jiritsu focuses on mirroring and verifying assets to enhance visibility, transparency, and verification. The platform ensures real-time automation and refresh capabilities, enabling robust DeFi and tokenization processes.
The heart of Jiritsu Network's innovation lies in its ZK MPC Cloud, a revolutionary technology that has processed over 6 million proofs in its short history. This robust platform offers Proof of Workflow (PoWF), powered by advanced computational engines and a sophisticated workflow manager, which together ensure secure and efficient orchestration and verification of computational processes. The technology provides optimal security, supported by proprietary and patent-pending innovations that safeguard user data and transactions.
The ZK MPC Cloud's offerings include Jiritsu RWA, Jiritsu ZKMPC, Jiritsu AI, and Jiritsu Proof, catering to a wide range of needs within the blockchain and financial technology landscapes. Jiritsu Network's ZK MPC Cloud technology has been applied in several practical and impactful ways across various industries. One notable use case is providing proof of inventory for a leading Amazon supply chain company, which manages over 100,000 SKUs and $20 million in products daily. This application showcases the technology's capability to handle large-scale operations efficiently and securely. The partnership with Brinks to verify gold reserves and other RWA in custody further underscores Jiritsu's commitment to asset integrity and security.
Additionally, Jiritsu's ZKMPC oracle offers advanced functionalities such as calculating weighted averages, performing functional computations, and maintaining confidentiality with ZK capabilities. These features are consumed by DeFi protocols to ensure precise and secure transactions, making reading and writing on the blockchain highly cost-effective. This allows decentralized applications (dApps) to act as gatekeepers to data and content, driving value into the utility token that supports verification and truth.
The Jiritsu platform's flexibility allows for the creation of provers for any business logic, data readers, and smart contract integration. This adaptability ensures that Jiritsu can provide robust and tailored solutions for a wide range of business needs, including the recent BTC and ETH spot ETFs. By verifying Total Assets Verified (TAV) and the value locked by real-world assets (TVL), Jiritsu provides comprehensive solutions for asset verification and brings verified BTC amounts in ETFs on-chain, enabling innovative financial solutions that offer unparalleled transparency and reliability.
BTC ETFs and Jiritsu’s New Role
Exchange-traded funds, or ETFs, have become one of the most prominent vehicles for investors to allocate to public markets over the last few decades. ETFs have become increasingly popular due to their low cost, liquidity, and passive access to investing in various investment subsectors throughout markets. Last year, $975 billion of assets were poured into ETFs as equity markets surged, reaching a total of more than $8 trillion AUM in 2023.
The market has recently been granted several Bitcoin ETFs after a long stand-off between filers/prospective issuers and the SEC. Since launching in March 2024, these ETFs have become some of the most successful launches of financial products of all time. Before diving into the Bitcoin ETFs and how Jiritsu fits in, let’s briefly overview the general history of ETFs as we know them today.
The origin of ETFs can be traced back to the rise of passive investing and indexation over decades. The original index dates back to the late 1800s, with the Dow Jones becoming popular, originally called the Dow Jones Railroad Average, before eventually expanding to cover other market subsectors. This index served as a way to measure the overall stock market, which in effect served as a reflection of the US economy’s performance. Fast forward to 1924, markets were given the first mutual fund with the Massachusetts Investors Trust. These investment vehicles served as a way for investors to get exposure to an actively managed pool of capital in a public market wrapper, including assets that mostly contained lower-risk profiles such as large-cap stocks or fixed-income instruments.
Today, mutual funds are among the most popular investments worldwide, especially among Americans. As of 2023, assets under management by mutual funds were $63.1 trillion, with the United States accounting for almost 40% of that.
The first US ETF, as we know it today, was launched in 1993 by State Street and was called the SPY, which tracked the S&P 500 stock index. At the time, ETFs made up just 1% of global stock trading volumes, a minuscule number compared to the 25-30% of trading volumes that they’ve traded in recent years. This drastic growth was partially led by the launch of new ETFs being launched for various subsectors.
The early 2000s sparked an influx of innovation in the ETF space, including ETFs that offered exposure to various assets such as commodities like gold (GLD) which launched in 2004, real estate, volatility, currencies, and even inverse products to bet against asset prices. Below we can see a brief history of exchange-traded funds and product launches, once again from Investopedia:
Fast forward to Q1 2024, ETFs are significantly expanding Bitcoin's accessibility to a wider audience, including individual investors, financial advisors, and institutional capital allocators. This increased access is anticipated to drive broader acceptance of Bitcoin over time. Recent data from River Financial reveals that Bitcoin ETF providers and funds now hold around 4% of Bitcoin's circulating supply, surpassing the holdings of publicly traded miners (3.4%) and businesses (3.6%). However, given the unique custodial requirements of a decentralized digital asset like BTC, is a standard ETF “wrapper” sufficient? Or are there ways of leveraging the benefits of blockchain technology to improve the transparency, security, and provenance of such a product?
Tracking ETF Flows
Research highlights that ETF flows can significantly impact the prices of underlying assets and overall market stability. This makes the accurate tracking of ETF flows essential for understanding overall market dynamics and investor sentiment. For example, ETF flows have been linked to shifts in asset valuations and investor behavior, emphasizing their importance in financial analysis.
Additionally, reports indicate that ETF flows can impact underlying constituent share prices and that equity ETFs have seen continuous weekly inflows, further underscoring their influence on the market.
Traditional institutional Bitcoin ETFs do not report on-chain, creating a transparency gap. Jiritsu pioneers on-chain ETF reporting, offering real-time data and greater transparency, which are crucial for both investors and market regulators. This innovation ensures accurate and timely information, reducing misinformation risk and enhancing trust in the financial system.
Jiritsu’s Layer 1
The Jiritsu blockchain introduces a transformative approach to tokenizing RWAs by integrating Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC). This L1 solution ensures secure and private verification of asset details while embedding regulatory compliance and asset integrity into digital tokens. Its innovative use of cryptographic methods and user-friendly transaction processes look to set a new standard in asset tokenization and improve upon the traditional ETF approach when it comes to BTC and ETH.
BTC and ETH ETFs bring significant liquidity to the market by making these digital assets available to traditional markets and investors. They provide a gateway for institutional and retail investors to participate in the cryptocurrency market without directly holding the underlying assets. However, these ETFs lack the transparency of on-chain data, which can provide more detailed insights into asset movements and ownership. Jiritsu addresses this gap by enabling on-chain reporting and verification, which supports DeFi applications and enhances overall market transparency.
Jiritsu's ZK proofs provide strong assurances to third parties, including ETF brokers and custodians, while maintaining the privacy of client balance distribution. Jiritsu further enhances this model by introducing a second layer of delegation to a "ZK Robot," automating the decision-making process without human intervention while maintaining ZK cryptography security.
ZK-MPCs
Before understanding Jiritsu’s role in tokenization, it’s critical to understand the role of ZK-MPC in the process. ZK-MPC oracles aggregate data from multiple sources and verify the computations involved. This ensures the data's security and accuracy and the processes used to compute values. The reliability of data verification enhances the overall trust in the system.
Jiritsu ZK-MPC oracles employ versatile data retrieval mechanisms, enhancing integration depth and security. The "push" mechanism involves data providers directly sending information to the oracle, which can pose risks if the provider's integrity or security is compromised. Conversely, the "pull" system allows the oracle to fetch data directly from integrated systems via APIs, such as supply chain software or banking information systems. This method offers deeper integration and reduces risks since compromising the data requires breaching these robust systems.
In scenarios involving IoT devices, such as cameras monitoring inventory, ZK-MPC oracles can securely aggregate and verify data from these devices. This reduces the likelihood of data tampering and enhances the trustworthiness of the reported data. The integration with IoT devices ensures real-time, accurate data collection and processing.
ZK-MPC not only secures data but also provides transparency in the data handling process. The chain of custody for data can be audited, allowing end-users to assess the level of trust provided by the system. This transparency doesn't necessarily increase trust beyond existing systems but offers a clear audit trail for verifying data integrity.
Tokenization with Jiritsu Proof
Tokenization has emerged as a pivotal mechanism within the cryptocurrency sphere, offering a bridge between traditional assets and digital markets. At a high level, the Jiritsu proof for tokenization method involves the following steps:
- User register on the Jiritsu blockchain platform
- Choose an asset for tokenization
- Submits asset details for verification
- ZK-MPC verifiers analyze and extract asset value
- Cryptographic proof generated and stored on the blockchain
- Tokenizer claims a proof, embedding it into a smart contract
- The token represents asset ready for transactions
- The user conducts transactions or exchanges tokens
The entire Jiritsu process begins with users registering on the Jiritsu platform and selecting the asset they wish to tokenize. Once the asset details are submitted, ZK-MPC verifiers analyze and extract the asset's value and compliance status. Each node in Jiritsu’s network runs an operating system powered by computational engines and a workflow manager that delivers Proof of Workflow (PoWF).
This analysis involves two types of verifiers: one that scrutinizes business policies and regulatory compliance, and another that handles financial data, performing tasks such as spot price retrieval and complex mark-to-market evaluations. This dual verification approach not only facilitates tokenization but also enables real-time valuation adjustments, which is crucial for maintaining transactional relevance and integrity.
After verification, cryptographic proofs are generated and stored on the blockchain. These proofs encapsulate all verified information, ensuring confidentiality and security. The blockchain acts as an immutable repository, recording these proofs permanently, thereby enabling public verification of an asset’s value and policy adherence without exposing sensitive details. Tokenizers then claim these proofs, embedding them into smart contracts to create tokens ready for transactions. These tokens carry cryptographically secure proofs of the asset's value and compliance, making them suitable for use in transactions on other blockchains or exchanges.
Tokenization Example
To better understand the process, let’s walk through an example. okenizing gold. Gold (PAXG) tokens are the leading example of tokenized gold, such as Paxos, which resulted in Paxos. Let’s look in detail at how an entity like Paxos “brings gold onchain” and what benefits Jiritsu can offer to the process.
To start, Paxos initiates the tokenization process by acquiring gold from a reputable gold exchange. This initial step ensures the asset backing the digital token is tangible and of verified quality. Once purchased, Paxos deposits the gold with a custodial service, such as Brinks. This custody arrangement guarantees the physical gold is securely stored and managed by a trusted third party.
Next, users of the Jiritsu platform can create a Verifier using the Jiritsu dApp available on supported blockchain networks. This step is crucial as it initiates the process of linking physical assets with their digital counterparts. The Verifier operates on Zero-Knowledge Multi-Party Compute (ZK-MPC) nodes. This technology ensures that sensitive information remains confidential while computations are performed. Verifiers may also include an automation feature to update information at preset times daily or on-demand, enhancing the efficiency and reliability of data updates. ZK-MPC nodes then retrieve detailed information about the gold stored by Brinks. This step is essential for maintaining transparency and trust in the tokenization process.
The verification process involves ZK-MPC nodes, which are responsible for off-chain verified computations. These nodes utilize zero-knowledge capabilities, allowing for different tiers of access and secrecy, thereby maintaining flexibility and security. For instance, an auditor might have full access to all information, while an asset manager might only see specific details relevant to their role. Automation is a key feature of this process, enabling verifications to occur regularly, such as once a day, every 15 minutes, or on-demand as required. This represents a significant improvement over Paxos's current practice of manually verifying inventory once a quarter.
Once the verification proof is written to the Jiritsu Layer 1 blockchain, Paxos proceeds with the tokenization process. Paxos mints a PAXG token on a blockchain of their choice, such as Solana, Avalanche, or Binance Smart Chain (BNB). The minting process converts the physical asset into a digital token that can be traded and managed within the cryptocurrency ecosystem.
Paxos acquires the proof from the Jiritsu Layer 1 ledger by compensating the user who created it, facilitated through the Jiritsu dApp. The dApp interface facilitates the acquisition of exclusive rights to the proof, with the entity that created the proof receiving compensation. A portion of this revenue is allocated to the network, while the remainder goes to the service provider responsible for creating the proof.
The entity that created the proof shares the revenue received from Paxos back into the network. This revenue-sharing model promotes active participation and supports the ecosystem's growth.
Consumers purchasing a PAXG token receive a token containing the proof of the underlying gold. They can use this proof to access detailed information and verify the gold's custody status on the ledger, potentially paying a fee for this service.
Jiritsu vs. the Competition
Jiritsu ZKMPC Cloud excels in supporting RWAs through its programmable nodes that facilitate data retrieval, automation, and complex computations. Jiritsu's technology integrates multiple functions into a single, cryptographically proven process. This includes detailed proofs of value such as policy, ownership, payment history, and complex pricing. By writing directly to its own Layer 1 on the Avalanche subnet, Jiritsu eliminates the need for bridges, offering a cost-effective and secure solution. This setup is particularly beneficial for institutions and asset managers seeking flexibility and scalability. The end result is a flexible and scalable solution, allowing direct tokenization on the Avalanche subnet and significantly reducing risk and cost.
Comparing Pyth Network and Chainlink
Both Pyth Network and Chainlink also support RWAs but with different strengths and limitations. Pyth focuses on providing high-frequency financial data by aggregating information from various financial institutions, resulting in robust price feeds. However, Pyth's reliance on bridges for cross-chain data transfers introduces additional complexity and costs.
Chainlink, known for its broad integration capabilities, supports RWAs through its extensive network of node operators across multiple blockchains; however, adding anything beyond a simple data feed is fraught with friction and complexity. Despite its flexible data sourcing, Chainlink is the most expensive option due to the overhead of compensating node operators in a competitive market. Furthermore, Chainlink lacks its own chain, which means it depends on bridges for data transfer.
Platforms Benefiting from Jiritsu
Leading platforms in the tokenization and digital securities marketplace, such as Securitize, Republic, Oasis Pro, and Maple, prioritize regulatory compliance. Securitize and Oasis Pro offer comprehensive solutions for issuing, managing, and trading tokenized securities, ensuring adherence to securities regulations. Republic democratizes private investment opportunities, enabling retail investors to participate in funding rounds traditionally reserved for institutions. Maple focuses on decentralized finance, particularly institutional lending and on-chain credit assessment.
These platforms benefit from Jiritsu's advanced verification and transparency capabilities, which add proof of RWA value and assets to these platform’s tokenization, regulatory compliance, and operational efficiency. Jiritsu's programmable and cryptographically proven processes for data retrieval, automation, and complex computation make it an ideal partner for these tokenization and digital securities marketplaces. The integration of Jiritsu's technology enables these platforms to offer secure and transparent asset verification, aligning with their compliance needs.
Enhancing Asset Management with Jiritsu
Ondo and other asset managers can significantly benefit from Jiritsu's advanced verification and transparency capabilities. Ondo's system involves acquiring assets like BUIDL and fiat currency to create ETF-like products, which are held in custody by Coinbase and a fiat bank. OUSG is a tokenized security backed by the SHV ETF, providing users with exposure to short-duration US Treasuries. A notable attribute of OUSG is that it is a permissioned token, meaning only addresses whitelisted by Ondo can mint, transfer, or receive it. Since its launch in January 2023, Ondo Finance has become the second-largest RWA issuer in the tokenized treasuries and securities market, trailing only Franklin Templeton.
Ondo markets itself as a general partnership selling limited partnership interests via tokens, which lowers entry barriers for investors. The entry barrier for investors is significantly lowered compared to traditional methods on platforms like Securitize, which typically require a minimum investment of $5 to $10 million.
However, Ondo's reliance on self-reports and annual audits for verification is relatively inadequate. Jiritsu enhances this process through its ZKMPC Layer 1 technology, providing advanced verification and transparency. Jiritsu's verification process is automated and can be scheduled for intervals ranging from daily down to minute-by-minute. This contrasts sharply with Ondo's manual verification processes, providing a more robust and reliable system. In this setup, the asset manager using Jiritsu’s solution handles marketing, customer service, compliance, and tokenization, with all necessary infrastructure provided by Republic.
By integrating with digital funds like BUIDL and platforms such as Republic and Oasis, Jiritsu enables asset managers to offer more secure and transparent products. This integration makes it straightforward for asset managers to implement similar solutions, providing robust and efficient tokenized asset products while improving compliance and operational efficiency.
Conclusion
The Jiritsu Network stands at the forefront of blockchain innovation, effectively bridging the gap between traditional assets and the crypto world. By leveraging advanced technologies like Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC), Jiritsu ensures robust security, transparency, and efficiency in tokenizing real-world assets (RWA). The ZK MPC Cloud, a cornerstone of Jiritsu's platform, has demonstrated its capacity to handle large-scale, secure computations, making it a reliable solution for businesses and financial institutions alike.
Moreover, Jiritsu's innovative approach to tokenization, utilizing cryptographic methods to ensure the privacy and integrity of asset details, sets a new standard in the blockchain space. The platform's adaptability allows for the creation of custom provers, smart contract integration, and seamless transaction processes, making it a robust solution for diverse business needs. This is particularly relevant in the context of the burgeoning ETF market, where Jiritsu's technology can enhance the transparency and security of Bitcoin ETFs, which have recently gained significant traction.
The Jiritsu blockchain's ability to integrate regulatory compliance and asset integrity into digital tokens is a game-changer, ensuring that tokenized assets meet the highest standards of verification and security. The platform's use of ZK proofs to provide strong assurances to third parties, including ETF brokers and custodians, while maintaining client privacy exemplifies its commitment to security and trust. Additionally, the introduction of MPC wallets and ZK Robots further automates and secures the decision-making process, eliminating human error and enhancing overall system reliability.
Jiritsu's comprehensive tokenization process, from user registration and asset verification to the creation of cryptographically secure tokens, ensures that assets are accurately represented and easily transactable on the blockchain. The revenue-sharing model and cost-effective infrastructure, supported by the JIRI utility token, incentivize participation and ensure the platform's sustainability. This economic efficiency broadens the platform's appeal and utility across various applications and user groups.
As the market for digital assets and tokenization continues to grow, Jiritsu Network is well-positioned to seize the opportunity presented by asset tokenization. By setting new standards in security and operational efficiency, Jiritsu is not only revolutionizing the tokenization of real-world assets but also paving the way for the next generation of digital finance.
Disclaimer: This report was commissioned by Jiritsu. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
Jiritsu Network aims to revolutionize the tokenization of real-world assets (RWA) by streamlining off-chain asset registration, verification, and tokenization. To encourage broader adoption of blockchain technology, Jiritsu focuses on reducing transaction costs, improving economic efficiency, increasing transparency, and offering world-class security by utilizing bleeding-edge cryptographic technologies. At its core, Jiritsu focuses on mirroring and verifying assets to enhance visibility, transparency, and verification. The platform ensures real-time automation and refresh capabilities, enabling robust DeFi and tokenization processes.
The heart of Jiritsu Network's innovation lies in its ZK MPC Cloud, a revolutionary technology that has processed over 6 million proofs in its short history. This robust platform offers Proof of Workflow (PoWF), powered by advanced computational engines and a sophisticated workflow manager, which together ensure secure and efficient orchestration and verification of computational processes. The technology provides optimal security, supported by proprietary and patent-pending innovations that safeguard user data and transactions.
The ZK MPC Cloud's offerings include Jiritsu RWA, Jiritsu ZKMPC, Jiritsu AI, and Jiritsu Proof, catering to a wide range of needs within the blockchain and financial technology landscapes. Jiritsu Network's ZK MPC Cloud technology has been applied in several practical and impactful ways across various industries. One notable use case is providing proof of inventory for a leading Amazon supply chain company, which manages over 100,000 SKUs and $20 million in products daily. This application showcases the technology's capability to handle large-scale operations efficiently and securely. The partnership with Brinks to verify gold reserves and other RWA in custody further underscores Jiritsu's commitment to asset integrity and security.
Additionally, Jiritsu's ZKMPC oracle offers advanced functionalities such as calculating weighted averages, performing functional computations, and maintaining confidentiality with ZK capabilities. These features are consumed by DeFi protocols to ensure precise and secure transactions, making reading and writing on the blockchain highly cost-effective. This allows decentralized applications (dApps) to act as gatekeepers to data and content, driving value into the utility token that supports verification and truth.
The Jiritsu platform's flexibility allows for the creation of provers for any business logic, data readers, and smart contract integration. This adaptability ensures that Jiritsu can provide robust and tailored solutions for a wide range of business needs, including the recent BTC and ETH spot ETFs. By verifying Total Assets Verified (TAV) and the value locked by real-world assets (TVL), Jiritsu provides comprehensive solutions for asset verification and brings verified BTC amounts in ETFs on-chain, enabling innovative financial solutions that offer unparalleled transparency and reliability.
BTC ETFs and Jiritsu’s New Role
Exchange-traded funds, or ETFs, have become one of the most prominent vehicles for investors to allocate to public markets over the last few decades. ETFs have become increasingly popular due to their low cost, liquidity, and passive access to investing in various investment subsectors throughout markets. Last year, $975 billion of assets were poured into ETFs as equity markets surged, reaching a total of more than $8 trillion AUM in 2023.
The market has recently been granted several Bitcoin ETFs after a long stand-off between filers/prospective issuers and the SEC. Since launching in March 2024, these ETFs have become some of the most successful launches of financial products of all time. Before diving into the Bitcoin ETFs and how Jiritsu fits in, let’s briefly overview the general history of ETFs as we know them today.
The origin of ETFs can be traced back to the rise of passive investing and indexation over decades. The original index dates back to the late 1800s, with the Dow Jones becoming popular, originally called the Dow Jones Railroad Average, before eventually expanding to cover other market subsectors. This index served as a way to measure the overall stock market, which in effect served as a reflection of the US economy’s performance. Fast forward to 1924, markets were given the first mutual fund with the Massachusetts Investors Trust. These investment vehicles served as a way for investors to get exposure to an actively managed pool of capital in a public market wrapper, including assets that mostly contained lower-risk profiles such as large-cap stocks or fixed-income instruments.
Today, mutual funds are among the most popular investments worldwide, especially among Americans. As of 2023, assets under management by mutual funds were $63.1 trillion, with the United States accounting for almost 40% of that.
The first US ETF, as we know it today, was launched in 1993 by State Street and was called the SPY, which tracked the S&P 500 stock index. At the time, ETFs made up just 1% of global stock trading volumes, a minuscule number compared to the 25-30% of trading volumes that they’ve traded in recent years. This drastic growth was partially led by the launch of new ETFs being launched for various subsectors.
The early 2000s sparked an influx of innovation in the ETF space, including ETFs that offered exposure to various assets such as commodities like gold (GLD) which launched in 2004, real estate, volatility, currencies, and even inverse products to bet against asset prices. Below we can see a brief history of exchange-traded funds and product launches, once again from Investopedia:
Fast forward to Q1 2024, ETFs are significantly expanding Bitcoin's accessibility to a wider audience, including individual investors, financial advisors, and institutional capital allocators. This increased access is anticipated to drive broader acceptance of Bitcoin over time. Recent data from River Financial reveals that Bitcoin ETF providers and funds now hold around 4% of Bitcoin's circulating supply, surpassing the holdings of publicly traded miners (3.4%) and businesses (3.6%). However, given the unique custodial requirements of a decentralized digital asset like BTC, is a standard ETF “wrapper” sufficient? Or are there ways of leveraging the benefits of blockchain technology to improve the transparency, security, and provenance of such a product?
Tracking ETF Flows
Research highlights that ETF flows can significantly impact the prices of underlying assets and overall market stability. This makes the accurate tracking of ETF flows essential for understanding overall market dynamics and investor sentiment. For example, ETF flows have been linked to shifts in asset valuations and investor behavior, emphasizing their importance in financial analysis.
Additionally, reports indicate that ETF flows can impact underlying constituent share prices and that equity ETFs have seen continuous weekly inflows, further underscoring their influence on the market.
Traditional institutional Bitcoin ETFs do not report on-chain, creating a transparency gap. Jiritsu pioneers on-chain ETF reporting, offering real-time data and greater transparency, which are crucial for both investors and market regulators. This innovation ensures accurate and timely information, reducing misinformation risk and enhancing trust in the financial system.
Jiritsu’s Layer 1
The Jiritsu blockchain introduces a transformative approach to tokenizing RWAs by integrating Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC). This L1 solution ensures secure and private verification of asset details while embedding regulatory compliance and asset integrity into digital tokens. Its innovative use of cryptographic methods and user-friendly transaction processes look to set a new standard in asset tokenization and improve upon the traditional ETF approach when it comes to BTC and ETH.
BTC and ETH ETFs bring significant liquidity to the market by making these digital assets available to traditional markets and investors. They provide a gateway for institutional and retail investors to participate in the cryptocurrency market without directly holding the underlying assets. However, these ETFs lack the transparency of on-chain data, which can provide more detailed insights into asset movements and ownership. Jiritsu addresses this gap by enabling on-chain reporting and verification, which supports DeFi applications and enhances overall market transparency.
Jiritsu's ZK proofs provide strong assurances to third parties, including ETF brokers and custodians, while maintaining the privacy of client balance distribution. Jiritsu further enhances this model by introducing a second layer of delegation to a "ZK Robot," automating the decision-making process without human intervention while maintaining ZK cryptography security.
ZK-MPCs
Before understanding Jiritsu’s role in tokenization, it’s critical to understand the role of ZK-MPC in the process. ZK-MPC oracles aggregate data from multiple sources and verify the computations involved. This ensures the data's security and accuracy and the processes used to compute values. The reliability of data verification enhances the overall trust in the system.
Jiritsu ZK-MPC oracles employ versatile data retrieval mechanisms, enhancing integration depth and security. The "push" mechanism involves data providers directly sending information to the oracle, which can pose risks if the provider's integrity or security is compromised. Conversely, the "pull" system allows the oracle to fetch data directly from integrated systems via APIs, such as supply chain software or banking information systems. This method offers deeper integration and reduces risks since compromising the data requires breaching these robust systems.
In scenarios involving IoT devices, such as cameras monitoring inventory, ZK-MPC oracles can securely aggregate and verify data from these devices. This reduces the likelihood of data tampering and enhances the trustworthiness of the reported data. The integration with IoT devices ensures real-time, accurate data collection and processing.
ZK-MPC not only secures data but also provides transparency in the data handling process. The chain of custody for data can be audited, allowing end-users to assess the level of trust provided by the system. This transparency doesn't necessarily increase trust beyond existing systems but offers a clear audit trail for verifying data integrity.
Tokenization with Jiritsu Proof
Tokenization has emerged as a pivotal mechanism within the cryptocurrency sphere, offering a bridge between traditional assets and digital markets. At a high level, the Jiritsu proof for tokenization method involves the following steps:
- User register on the Jiritsu blockchain platform
- Choose an asset for tokenization
- Submits asset details for verification
- ZK-MPC verifiers analyze and extract asset value
- Cryptographic proof generated and stored on the blockchain
- Tokenizer claims a proof, embedding it into a smart contract
- The token represents asset ready for transactions
- The user conducts transactions or exchanges tokens
The entire Jiritsu process begins with users registering on the Jiritsu platform and selecting the asset they wish to tokenize. Once the asset details are submitted, ZK-MPC verifiers analyze and extract the asset's value and compliance status. Each node in Jiritsu’s network runs an operating system powered by computational engines and a workflow manager that delivers Proof of Workflow (PoWF).
This analysis involves two types of verifiers: one that scrutinizes business policies and regulatory compliance, and another that handles financial data, performing tasks such as spot price retrieval and complex mark-to-market evaluations. This dual verification approach not only facilitates tokenization but also enables real-time valuation adjustments, which is crucial for maintaining transactional relevance and integrity.
After verification, cryptographic proofs are generated and stored on the blockchain. These proofs encapsulate all verified information, ensuring confidentiality and security. The blockchain acts as an immutable repository, recording these proofs permanently, thereby enabling public verification of an asset’s value and policy adherence without exposing sensitive details. Tokenizers then claim these proofs, embedding them into smart contracts to create tokens ready for transactions. These tokens carry cryptographically secure proofs of the asset's value and compliance, making them suitable for use in transactions on other blockchains or exchanges.
Tokenization Example
To better understand the process, let’s walk through an example. okenizing gold. Gold (PAXG) tokens are the leading example of tokenized gold, such as Paxos, which resulted in Paxos. Let’s look in detail at how an entity like Paxos “brings gold onchain” and what benefits Jiritsu can offer to the process.
To start, Paxos initiates the tokenization process by acquiring gold from a reputable gold exchange. This initial step ensures the asset backing the digital token is tangible and of verified quality. Once purchased, Paxos deposits the gold with a custodial service, such as Brinks. This custody arrangement guarantees the physical gold is securely stored and managed by a trusted third party.
Next, users of the Jiritsu platform can create a Verifier using the Jiritsu dApp available on supported blockchain networks. This step is crucial as it initiates the process of linking physical assets with their digital counterparts. The Verifier operates on Zero-Knowledge Multi-Party Compute (ZK-MPC) nodes. This technology ensures that sensitive information remains confidential while computations are performed. Verifiers may also include an automation feature to update information at preset times daily or on-demand, enhancing the efficiency and reliability of data updates. ZK-MPC nodes then retrieve detailed information about the gold stored by Brinks. This step is essential for maintaining transparency and trust in the tokenization process.
The verification process involves ZK-MPC nodes, which are responsible for off-chain verified computations. These nodes utilize zero-knowledge capabilities, allowing for different tiers of access and secrecy, thereby maintaining flexibility and security. For instance, an auditor might have full access to all information, while an asset manager might only see specific details relevant to their role. Automation is a key feature of this process, enabling verifications to occur regularly, such as once a day, every 15 minutes, or on-demand as required. This represents a significant improvement over Paxos's current practice of manually verifying inventory once a quarter.
Once the verification proof is written to the Jiritsu Layer 1 blockchain, Paxos proceeds with the tokenization process. Paxos mints a PAXG token on a blockchain of their choice, such as Solana, Avalanche, or Binance Smart Chain (BNB). The minting process converts the physical asset into a digital token that can be traded and managed within the cryptocurrency ecosystem.
Paxos acquires the proof from the Jiritsu Layer 1 ledger by compensating the user who created it, facilitated through the Jiritsu dApp. The dApp interface facilitates the acquisition of exclusive rights to the proof, with the entity that created the proof receiving compensation. A portion of this revenue is allocated to the network, while the remainder goes to the service provider responsible for creating the proof.
The entity that created the proof shares the revenue received from Paxos back into the network. This revenue-sharing model promotes active participation and supports the ecosystem's growth.
Consumers purchasing a PAXG token receive a token containing the proof of the underlying gold. They can use this proof to access detailed information and verify the gold's custody status on the ledger, potentially paying a fee for this service.
Jiritsu vs. the Competition
Jiritsu ZKMPC Cloud excels in supporting RWAs through its programmable nodes that facilitate data retrieval, automation, and complex computations. Jiritsu's technology integrates multiple functions into a single, cryptographically proven process. This includes detailed proofs of value such as policy, ownership, payment history, and complex pricing. By writing directly to its own Layer 1 on the Avalanche subnet, Jiritsu eliminates the need for bridges, offering a cost-effective and secure solution. This setup is particularly beneficial for institutions and asset managers seeking flexibility and scalability. The end result is a flexible and scalable solution, allowing direct tokenization on the Avalanche subnet and significantly reducing risk and cost.
Comparing Pyth Network and Chainlink
Both Pyth Network and Chainlink also support RWAs but with different strengths and limitations. Pyth focuses on providing high-frequency financial data by aggregating information from various financial institutions, resulting in robust price feeds. However, Pyth's reliance on bridges for cross-chain data transfers introduces additional complexity and costs.
Chainlink, known for its broad integration capabilities, supports RWAs through its extensive network of node operators across multiple blockchains; however, adding anything beyond a simple data feed is fraught with friction and complexity. Despite its flexible data sourcing, Chainlink is the most expensive option due to the overhead of compensating node operators in a competitive market. Furthermore, Chainlink lacks its own chain, which means it depends on bridges for data transfer.
Platforms Benefiting from Jiritsu
Leading platforms in the tokenization and digital securities marketplace, such as Securitize, Republic, Oasis Pro, and Maple, prioritize regulatory compliance. Securitize and Oasis Pro offer comprehensive solutions for issuing, managing, and trading tokenized securities, ensuring adherence to securities regulations. Republic democratizes private investment opportunities, enabling retail investors to participate in funding rounds traditionally reserved for institutions. Maple focuses on decentralized finance, particularly institutional lending and on-chain credit assessment.
These platforms benefit from Jiritsu's advanced verification and transparency capabilities, which add proof of RWA value and assets to these platform’s tokenization, regulatory compliance, and operational efficiency. Jiritsu's programmable and cryptographically proven processes for data retrieval, automation, and complex computation make it an ideal partner for these tokenization and digital securities marketplaces. The integration of Jiritsu's technology enables these platforms to offer secure and transparent asset verification, aligning with their compliance needs.
Enhancing Asset Management with Jiritsu
Ondo and other asset managers can significantly benefit from Jiritsu's advanced verification and transparency capabilities. Ondo's system involves acquiring assets like BUIDL and fiat currency to create ETF-like products, which are held in custody by Coinbase and a fiat bank. OUSG is a tokenized security backed by the SHV ETF, providing users with exposure to short-duration US Treasuries. A notable attribute of OUSG is that it is a permissioned token, meaning only addresses whitelisted by Ondo can mint, transfer, or receive it. Since its launch in January 2023, Ondo Finance has become the second-largest RWA issuer in the tokenized treasuries and securities market, trailing only Franklin Templeton.
Ondo markets itself as a general partnership selling limited partnership interests via tokens, which lowers entry barriers for investors. The entry barrier for investors is significantly lowered compared to traditional methods on platforms like Securitize, which typically require a minimum investment of $5 to $10 million.
However, Ondo's reliance on self-reports and annual audits for verification is relatively inadequate. Jiritsu enhances this process through its ZKMPC Layer 1 technology, providing advanced verification and transparency. Jiritsu's verification process is automated and can be scheduled for intervals ranging from daily down to minute-by-minute. This contrasts sharply with Ondo's manual verification processes, providing a more robust and reliable system. In this setup, the asset manager using Jiritsu’s solution handles marketing, customer service, compliance, and tokenization, with all necessary infrastructure provided by Republic.
By integrating with digital funds like BUIDL and platforms such as Republic and Oasis, Jiritsu enables asset managers to offer more secure and transparent products. This integration makes it straightforward for asset managers to implement similar solutions, providing robust and efficient tokenized asset products while improving compliance and operational efficiency.
Conclusion
The Jiritsu Network stands at the forefront of blockchain innovation, effectively bridging the gap between traditional assets and the crypto world. By leveraging advanced technologies like Zero-Knowledge (ZK) Proofs and Multi-Party Computation (MPC), Jiritsu ensures robust security, transparency, and efficiency in tokenizing real-world assets (RWA). The ZK MPC Cloud, a cornerstone of Jiritsu's platform, has demonstrated its capacity to handle large-scale, secure computations, making it a reliable solution for businesses and financial institutions alike.
Moreover, Jiritsu's innovative approach to tokenization, utilizing cryptographic methods to ensure the privacy and integrity of asset details, sets a new standard in the blockchain space. The platform's adaptability allows for the creation of custom provers, smart contract integration, and seamless transaction processes, making it a robust solution for diverse business needs. This is particularly relevant in the context of the burgeoning ETF market, where Jiritsu's technology can enhance the transparency and security of Bitcoin ETFs, which have recently gained significant traction.
The Jiritsu blockchain's ability to integrate regulatory compliance and asset integrity into digital tokens is a game-changer, ensuring that tokenized assets meet the highest standards of verification and security. The platform's use of ZK proofs to provide strong assurances to third parties, including ETF brokers and custodians, while maintaining client privacy exemplifies its commitment to security and trust. Additionally, the introduction of MPC wallets and ZK Robots further automates and secures the decision-making process, eliminating human error and enhancing overall system reliability.
Jiritsu's comprehensive tokenization process, from user registration and asset verification to the creation of cryptographically secure tokens, ensures that assets are accurately represented and easily transactable on the blockchain. The revenue-sharing model and cost-effective infrastructure, supported by the JIRI utility token, incentivize participation and ensure the platform's sustainability. This economic efficiency broadens the platform's appeal and utility across various applications and user groups.
As the market for digital assets and tokenization continues to grow, Jiritsu Network is well-positioned to seize the opportunity presented by asset tokenization. By setting new standards in security and operational efficiency, Jiritsu is not only revolutionizing the tokenization of real-world assets but also paving the way for the next generation of digital finance.
Disclaimer: This report was commissioned by Jiritsu. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.
