ETT digital asset management system (dams) & blockchain gateway
Introduction
ETT’s primary task in the design of this optional module was to mitigate risk for the client of ETT. Risks such as currency volatility, asset security and compliance, are not new but are greatly heightened in the case of digital currencies because the ETT system manages custody of those assets independently and is connected directly to the international settlement network rather than through a third party such as a bank.
Standard ETT software is a sophisticated system for treasury management and transaction processing, facilitating foreign exchange of fiat currencies at the market-making level. It connects through its back-office, whether manually, via batch processing or through APIs with multiple payment processors, foreign exchange dealers and banks simultaneously. It provides independence, continuity of activity and freedom of choice to non-bank financial institutions whereby the client of ETT can manage liquidity pools and foreign exchange, on-board customers, process payments and deposits, optimise currency conversions, and generate sophisticated reports.
DAMS and the Blockchain Gateway extend the functionality of this system to support digital currencies. This extension allows ETT clients to easily maintain managed wallets on behalf of their customers, process payments and deposits in digital currencies and make conversions between digital and fiat currencies and between digital currencies.
Digital asset exchanges and wallet management systems
The standard ETT system has integrated with Digital Asset Exchanges via API, but this offers only part of the solutions our ETT clients need. Wallet Management Systems can extend this functionality but again, this only provides functionality to manage wallets on a remote system, with the risk of loss lying with the remote party.
Digital Asset Exchanges and Wallet Management Systems provide at least 2 services: firstly, they abstract the complex details of transactions by reading the blockchain and submitting transaction requests to the peer-to-peer network of miners; secondly, they manage the digital assets on behalf of their customers. Over and above that base service, they typically offer services for exchange or margin trading with the digital assets.
Blockchain gateway
The Blockchain Gateway provides a service that covers the first part of the functions offered by Digital Asset Exchanges and Wallet Management Systems: reading the blockchain and submitting transaction requests. Additionally, monitors the blockchain through its peer-to-peer network for new transactions, building a local copy of the public ledger that records transactions of the managed digital funds.
Digital asset management system
The second part of the service that Digital Asset Exchanges and Wallet Management Systems offer is the management of the private keys that are essentially the title to the digital assets. ETT has built a unique system that enables its clients to do this within DAMS. It manages the private key in a wallet, handling the generation of blockchain addresses and private keys and providing a way for users to safekeep those private keys and to synchronize them between devices.
The purpose is to let ETT clients manage digital assets on behalf of their customers, in a similar way that they do for fiat currencies, and to facilitate payment processing for those customers. This unique software system can be extended with value added services that ETT clients want to offer.
This blockchain-enabled treasury management system has integrated several components:
- virtual account management
- treasury (liquidity) management
- fiat currency transfer & conversion processing
- deposit address management
- transaction aggregation management
- Cold/hot wallet management
- blockchain transfer processing
- allocation of digital asset deposits
- digital asset exchange integration
DAMS allows ETT clients to safely receive funds on behalf of customers, safeguard those assets and allow customers to request transfer or conversion of those funds. Such a system must have at least the following features:
- generate new blockchain addresses and assign them to customers
- allocate deposits to customers
- manage the collection of blockchain addresses
- aggregate digital assets in a hot wallet
- provide a safe workflow for staff to move funds from hot to cold wallet and vice versa and to cycle cold wallet addresses/keys
