The founding member organizations are Brave, Blockchain at Berkeley, Uphold and Cred (formerly Libra Credit).
Eich says that the real usability problems faced by the next 100 million users of digital assets can be solved and that the new universal platform can drive mass user adoption of cryptocurrencies.
“The early days of the internet were very similar to the world of blockchain today, with many different technology platforms fragmented and incapable of communicating with one other,” says JP Thieriot, co-founder of Uphold. “We believe that the Universal Protocol Platform is a technology that has the potential to connect blockchain technologies, much like the breakthrough of the TCP and IP protocols that drove the internet towards mass adoption.”
A key issue in the crypto ecosystem involves the growing number of different blockchains. For mass adoption to soar, cryptocurrencies need to perform far better than the current system of multiple local fiat currencies that require constant intermediaries and fees to move money across borders. New users of cryptocurrency need to be able to bounce back and forth between different assets that live on different blockchains, like Bitcoin and Ethereum, without any friction.
The UP Platform works with ‘proxy’ tokens. A proxy token is a digital representation of a digital asset. It can represent Bitcoin, Litecoin, Ethereum and the many different digital assets that live on any number of different blockchains. The idea is to host a common universal token that allows distinct blockchains and token-based projects to interact freely and frictionlessly with each other. “Proxy Bitcoin”, for example, can exist on Ethereum.
The founding members of the protocol say that the platform “will publish the value of its assets in custody in real-time on a public blockchain. The reserve will also be subject to quarterly third-party audits that will be shared with the community to demonstrate the financial soundness of the Proxy Token ecosystem.”
In addition to proxy currencies such as Bitcoin, the platform will allow proxy securities and private equity. Users will be able to swap, exchange and transfer value in a seamless environment designed to flatten the many technological complexities of the current crypto ecosystem.
The platform aims to “make an unprecedented amount of liquidity available for the ecosystem” by addressing three of the biggest disadvantages of holding and using Bitcoin and other digital assets. To make cryptocurrencies far more practical, convenient and trusted by consumers and businesses, the protocol offers three critical safeguards: private key recovery, inheritability and loss assurance.
In addition, the UP Platform is designed to allow decentralized exchanges to list various tokens more easily and create new trading pairs. It will also feature private custody and wallet options.