Mastercard Moves at 'Amazing Pace' as Polytrade Tests RWA Token Integration
Date: 2023-08-28 Author: Karina Ziganova Categories: BLOCKCHAIN, CRYPTO PAYMENTS
Mastercard has launched its first ever blockchain innovation run to develop its Multi-Token Network (MTN). It happened last week, London.
Among others was fintech startup Polytrade, which demonstrated the integration of its trade finance blockchain platform with MTN.
This network is designed to enable secure and seamless transactions using blockchain-based digital assets. A technical design for a network that is a kind of "multi-chain layer 2" but that does not have a consensus mechanism has been published by Mastercard. The description uses the term "multi-strand level 2". This operation aims to streamline blockchain transactions into legacy financial systems.
We need MTN to include a group of verified counterparties. They would form a secure network overlay on top of existing blockchains.”
Mastercard saw MTN as a way to mitigate the risks and challenges that had previously limited blockchain adoption. This is written in the official document of the company. The network will establish rules for the compliance, governance and stability of payment tokens. The MTN whitepaper is defined as:
The Mastercard Multi-Token Network™ (MTM), which would be a new system that combines trusted partners and secures a secure network on top of the network. Split into multiple public or private blockchains.”
Mastercard considers MTN to be an integral part of the holistic system of digital networks, as it is the critical layer. The diagram below shows how MTN will integrate with web3 as a transactional layer between service providers and the bank.
Polytrade showed the power of MTN.
A decentralized protocol enabling small and medium-sized businesses to access cross-border trade finance is being developed by Polytrade. This will enable lending and investment from a global pool of capital providers, as well as the use of tokenized invoices or other assets in trading. This move, in fact, decentralizes the financing of invoices. As a result, companies are able to access funds at a time when they would otherwise be illiquid.
The startup, according to Piyush Guptu (PG), co-founder of Polytrade, sees great potential for synergy with the vision of Mastercard MTN. PG decided:
We are quite optimistic, despite the incredible pace of operation of the Mastercard Multi-Token Network and the masters card team.
We were given the opportunity to work with the option of using the Mastercard multi-token network. Many thanks to the company for this help.
Showcasing the collaboration between traditional financial institutions and crypto-native companies, Mastercard aims to create a network to unlock the potential of blockchain/digital assets during basic payments or trading.
Farmsent founder YOG was delighted with the achievement: "So glad to see a project like #RWA Polytrade gaining the popularity and success it deserves." RWA stands for Real Asset and is a growing web3 sector developing strategies to bring tokenization from the physical world to the chain.
According to the white paper, the MTN pilot solves the control and interoperability issues that have limited adoption over the past years.
How MTN maps to blockchain networks.
Essentially, MTN is an overlay network with a surface on top of existing public and private blockchains in order to provide interoperability. It also provides an additional layer of security by ensuring consistency between the two as a whole.
The features that distinguish autonomous blockchain from MTN are not enough. It does not have a mechanism for reaching consensus or verifying transactions. Instead, settlements are carried out on underlying blockchains that are connected via MTN.
MTN, in turn, is described as a network overlay spanning multiple chains rather than its own blockchain. It is the initial goal for establishing common rules, compliance standards and management procedures.
By maintaining the security and immutability of connected blockchains, while increasing compliance/interoperability, MTN aims to provide a framework that improves the reliability and grundfos of transactions across all systems.
It follows that even though MTN connects various blockchains together, it does not appear to function as a full block mining after itself based on the details presented in the white paper. When looking for the ideal option, the value proposition focuses on network effects in the bundle of chains. rather than a new consensus mechanism and is looking for the best option.
