In previous posts we have made the case for managing your Ecosystem’s Digital Twin using RegDefy and the reasons behind it. How does this work in a real example? To demonstrate this, we can consider one of the core topics in any DeFi platform: Participant onboarding.
In this example, an organisation or individual applies to join a potentially systemic Financial Market Infrastructure (FMI). This often consists of technical, legal and financial onboarding workstreams.
Technical
The participant has to demonstrate that they can interact with the platform from a functional and non-functional point of view, without impacting other existing participants. This involves the installation of software; creation and communication of addresses; and individual and ecosystem testing.
Legal
There are obligations in both directions that exist between a Participant and the platform. These need to be agreed in a compliant way. This involves due diligence; evaluation against the participation criteria; and signing the contracts defining those obligations.
Financial
Participation in any DeFi platform requires the smooth transfer of financial resources. As part of the onboarding process, information such as Account structures, SSIs and BICs need to be communicated and configured.
Each of these workstreams contributes a different set of dimension items for both the Participant and FMI to the model. Some examples of them are shown below.
| Dimension | FMI & Participant |
| Stakeholder Groups | The Operations, IT, Security, of both organisations and the Vendor Management team of the Participant. |
| Processes and Capabilities | Validating due diligence information; Participant Testing; |
| Commitments | The Participation criteria and contracts; KYC regulations |
| Applications & Data | FMI KYC Systems; Participant Participant Due Diligence Data |
| Risks | Allowing invalid participants onto the platform |
Capturing this information not only demonstrates that you understand how the ecosystem works, but each dimension also holds additional value:
- Stakeholder Groups – These are used in the Accountability Model
- Processes – Used to evidence activities done correctly
- Commitments – Forms the basis of the compliance model
- Applications – What systems should be included on the architecture
- Data – Forms the basis of the data architecture
- Risks – The risk register allows you to mitigate those risks and demonstrate the organisation is operating within the appetite set by the board.
The contents of each dimension and the relationships between them allow you to not only describe the ecosystem but also run the business in a sound manner.
