Crypto foundations continue to thrive in Switzerland
Updated: Mar 18, 2021
Yet more overseas blockchain firms are coming to Switzerland to set up foundations. British company Atlas City will establish a non-profit entity for its Catalyst project. But what’s in it for commercial enterprises that develop cutting-edge technologies?
The Swiss foundation model looked to be faltering with disputes at Tezos and Cardano last year. But 18 crypto foundations were set up in 2018, bringing the total number to 58. The Geneva-based Libra Association is also expected to establish its own foundation to manage Facebook’s cryptocurrency project.
Part of the reason for setting up a foundation lies in the ethos of blockchain and other distributed ledger technology (DLT) systems: to offer decentralised platforms that anyone can use to store and transmit their data – a so-called “open source” model.
“The most popular and widely used computer platforms and operating systems today are all open source. Think the Web, Linux - even Microsoft is moving to open source much of their technology. In the blockchain and DLT arena, Ethereum, r3 Corda, Hyperledger, and others are all open source,” Atlas City president Chris Justice told swissinfo.ch.
Having secured $4 million (CHF5 million) in late-stage funding, Catalyst intends to offer itself for public consumption when it launches next year. Anyone can provide data storage and computing power for Catalyst and contribute to its future development, receiving rewards in the process.
People and entities that run projects on the Catalyst system will provide those rewards with pay-as-you-go contributions. In this way the DLT system will run itself without the need for gatekeepers or intermediaries.
Foundations still represent a central authority of sorts, governed by statutes that set out their purpose and goals. The problems at Tezos and Cardano show that such entities can still be disrupted by disputes, but blockchain firms still appear to believe in the model.
British-based Atlas City will continue to run as a separate commercial venture, designing business applications to run on Catalyst, issuing licenses for companies that use these products and offering support services. But it does not mind competitors doing the same.
To be clear, Atlas and many other developers of blockchain operating systems want to make money from their endeavours. But opening the underlying platform up to the public is a departure from the winner-takes-all drive to market dominance. In return, Atlas hands over the responsibility and cost of maintaining and upgrading the platform to the foundation and entire community of users.
One project running on Catalyst is the CryptoCycle Reward4Waste scheme that records deposits that consumers pay on plastic bottle drinks and their refunds when bottles are recycled. The advantage of DLT is that it records data chronologically in a tamper-proof ledger whilst allowing participants to both view and validate data relevant to them.
Part of the Reward4waste DLT system (tracing deposits and refunds) will be open for public scrutiny while commercially sensitive data of bottle manufacturers can be cordoned off into private areas.
“Many businesses, government bodies and other organisations will want to run their applications on a public, openly accessible platform. So, anyone will be able to build any application for any use on the public Catalyst Network without restriction,” says Justice. “In other situations, a private network will be more appropriate.”
Many companies and organisations are looking to DLT to bring efficiencies. Some prefer to build private, proprietary systems while others are looking to take advantage of a growing number of public, open source DLT models.