Deutsche Bank Layer 2 Built on ZKsync Technology

Key Points:

• Deutsche Bank is testing Project Dama 2, a blockchain platform built on ZKsync technology.
• The Deutsche Bank Layer 2 introduces a “trusted verifier” system, allowing regulators to oversee transactions.

According to Bloomberg, the Deutsche Bank of Germany, the largest financial institution in the country, is furthering blockchain innovation by developing an Ethereum-based Layer 2 platform, also known as Project Dama 2.

Read more: Crypto Firm Keyrock to Promote Services by Partnering With Deutsche Bank

Deutsche Bank Layer 2 Blockchain Launched

Deutsche Bank Layer 2 has been designed to overcome some regulatory challenges that one might have faced while using public blockchains, such as the possibility of a transaction involving sanctioned entities or criminals.

The Layer 2 solution is built on ZKsync technology, designed to achieve further efficiency and reduction of transaction costs while integrating mechanisms necessary to satisfy regulatory scrutiny.

Public blockchains like Ethereum, according to Boon-Hiong Chan, Deutsche Bank’s Asia-Pacific industry innovation lead, come with risks for regulated institutions that include the uncertainty of the validators of transactions and inadvertently transferring funds to a sanctioned entity.

Project Dama 2 Joins Singapore’s Blockchain Asset Tokenization Initiative

Deutsche Bank Layer 2 has a “trusted verifier” system that gives regulators supervisory powers to curb these risks. Regulators will have “super admin rights” to oversee transactions and monitor fund movements where necessary. The platform allows banks to create a curated list of trusted validators, ensuring interactions with digital assets are safer.

Currently in its testing phase, Project Dama 2 is part of Singapore’s Monetary Authority initiative, Project Guardian, which brings together 24 major financial institutions to explore asset tokenization via blockchain technology. The initiative is supposed to respond to growing financial pressures, such as margin compression, by leveraging the power of blockchain.

Deutsche Bank has been working with Memento Blockchain and Interop Labs to build the platform. While still pending regulatory approval, the bank hopes to launch a minimum viable product next year.