In a significant move for the blockchain industry, Digital Asset recently announced the successful closure of a $35 million Series C funding round. This investment brings the company’s total funding to $150 million since its establishment in 2014. The startup is widely recognized for its collaboration with the Australian Securities Exchange (ASX) on a groundbreaking settlement project and boasts an impressive roster of existing investors, including major financial and technology institutions.
While the company did not disclose the specific valuation or identities of the new investors, it confirmed that the majority of participants from its earlier Series A and B rounds also contributed to this latest funding. In a related announcement, the ASX revealed it committed $10 million to this round, increasing its total investment in Digital Asset to $30.9 million.
Strategic Shift Towards Smart Contract Innovation
Following the departure of former CEO Blythe Masters nearly a year ago and the appointment of Yuval Rooz as the new CEO eight months ago, Digital Asset has undergone a strategic pivot. The company has shifted its primary focus to the development and promotion of DAML, its smart contract language, which was recently open-sourced. This change marks a significant evolution in the company’s business model.
DAML is designed to be versatile and blockchain-agnostic, capable of running on various distributed ledger platforms such as Hyperledger Fabric, Corda, VMWare Blockchain, Hyperledger Sawtooth, and Amazon’s QLDB. Since being open-sourced, monthly downloads of the DAML Software Development Kit (SDK) have more than doubled, indicating growing developer interest and adoption.
New Business Model and OEM Strategy
Digital Asset’s revised business strategy centers on an Original Equipment Manufacturer (OEM) approach. Instead of relying solely on its proprietary ledger, the company now generates licensing revenue when DAML is integrated into enterprise solutions developed by third parties. Additionally, it offers consulting services to facilitate the seamless incorporation of DAML into various ledger technologies.
This strategic realignment does not mean the abandonment of Digital Asset’s own ledger. However, the primary revenue focus has shifted towards the smart contract language and its ecosystem. This approach allows the company to leverage the broader adoption of DAML across multiple platforms, reducing dependency on any single blockchain technology.
Expanding Ecosystem and Practical Applications
The growing DAML ecosystem includes a marketplace featuring pre-built “recipes” or code templates developed by partners such as Accenture, intellectEU, Nomura Research, and Wipro. These templates cover a wide range of applications, from Know Your Customer (KYC) processes to the repackaging of mortgage-backed securities.
One of the most notable implementations of DAML is in derivatives trading, where it is used to ensure compliance with the new ISDA standard. Another significant application is Broadridge’s solution for mitigating credit risk in repo markets. The flexibility and interoperability of DAML make it an attractive choice for enterprises seeking to streamline complex workflows across different systems.
Advantages of a Blockchain-Agnostic Approach
A key strength of DAML is its ability to operate across diverse environments, including both blockchain and non-blockchain systems. For instance, it can run on Amazon Aurora, a database compatible with MySQL and Postgres. This versatility allows organizations to begin their digital transformation journey using centralized systems before fully transitioning to decentralized ledgers.
This interoperability also simplifies the process of switching underlying blockchains without necessitating changes to the smart contract code. A practical example of this capability was demonstrated when Digital Asset and its partners migrated the ASX’s CHESS settlement system from the Digital Asset ledger to VMWare Blockchain with minimal effort, thanks to the abstraction provided by the DAML smart contract layer.
Introducing DABL for Streamlined Development
In conjunction with the funding announcement, Digital Asset unveiled DABL, a new hosting platform designed to help developers deploy DAML applications quickly and efficiently. Unlike traditional desktop-based development tools, DABL provides a hosted environment on a real ledger, emphasizing ease of use and rapid deployment.
DABL abstracts away the complexities of deploying, managing, and scaling distributed applications. It serves as a production-ready environment for Software-as-a-Service (SaaS) applications that involve multi-party workflows, making it easier for developers to focus on creating value-added features rather than managing infrastructure.
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Leadership’s Vision for the Future
Yuval Rooz, Co-Founder and CEO of Digital Asset, emphasized the company’s mission to reduce the time developers spend on undifferentiated work. “DAML allows you to focus only on what you need to do to differentiate your product and eliminate the complexity that doesn’t provide value to your organization,” he stated. “With this new funding, we will further our mission to focus on the ten percent value-add by providing a world-class smart contract experience regardless of where your application runs.”
Eric Saraniecki, Head of Product at Digital Asset, elaborated on the motivation behind DABL in a recent blog post: “DAML abstracts away the complexities of all code that isn’t the logic of what your application does. Developers only write business flows and application behavior. DABL completes this vision by abstracting away deployment, management, and scaling of distributed applications.”
Frequently Asked Questions
What is DAML?
DAML is an open-source smart contract language developed by Digital Asset. It is designed to be blockchain-agnostic, meaning it can run on various distributed ledger platforms and even traditional databases. Its primary focus is on streamlining business workflows and reducing development complexity.
How does Digital Asset generate revenue with DAML?
The company employs an OEM strategy, earning licensing fees when DAML is integrated into third-party enterprise solutions. It also offers consulting services to assist with the implementation and customization of DAML for specific use cases, such as derivatives trading or risk management.
What is the significance of DABL?
DABL is a hosted platform that simplifies the deployment and management of DAML applications. It allows developers to quickly test and deploy their smart contracts without setting up and maintaining their own infrastructure, accelerating the development cycle and reducing operational overhead.
Can DAML be used without blockchain technology?
Yes, DAML is versatile and can run on non-blockchain systems like Amazon Aurora, which is compatible with conventional databases. This allows organizations to adopt DAML for workflow automation without immediately committing to a full blockchain implementation.
Who are the major partners using DAML?
Prominent partners and investors include Accenture, ASX, Broadridge, Citi, Deutsche Börse, DTCC, JP Morgan, Goldman Sachs, and IBM. These organizations are involved in developing and deploying DAML-based solutions for various financial and operational applications.
What are some practical applications of DAML?
DAML is used in a wide range of applications, from regulatory compliance in derivatives trading to reducing credit risk in repo markets. It also supports know-your-customer processes and the repackaging of complex financial instruments like mortgage-backed securities.