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Sikoba and Horizen Partner to Bring Transparency to Decentralized Credit Market

Sikoba to Build a Customized Sidechain on Horizen to Safeguard Financial Data Transactions

Horizen, a technology platform enabling businesses and developers to create their own public or private blockchains, has announced a partnership with Sikoba, a decentralized blockchain-based system for peer-to-peer IOUs. By partnering with Horizen, Sikoba will further provide its users with the ability to obtain legal certainty, establish credit history, and verify financial transactions in a safer and more secure manner.

Sikoba aims to make informal credit – when IOUs are used instead of cash – much more efficient. Informal credit is widely used by small businesses in developing countries, but suffers from a lack of legal recognition, the inability to transact outside of one’s trusted network, and the absence of a verifiable audit trail. By registering debt on a public blockchain, Sikoba overcomes those roadblocks.

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Through Sikoba, users obtain legal certainty, have the ability to establish a credit history and can transact beyond their immediate circle of trust with identified trusted intermediaries. Finally, Sikoba also reduces the need for cash settlement by automatically clearing circular debt. As debts and credits registered on Sikoba’s federated blockchain fall into the category of financial data, this information must remain private, and within a trusted system. Sikoba users, however, should still have the ability to verify and generate proofs of their transactions, within a public ecosystem, as needed.

“To achieve this,” said Alex Kampa, Founder of Sikoba, “we will write these proofs onto a public Horizen sidechain, using Horizen’s zero knowledge toolkit and the Zendoo interoperability protocol. Horizen technology will therefore enable us to provide an essential service to Sikoba users. We very much look forward to working together with the Horizen team on this in the near future.”

Integrating Horizen’s sidechain technology, Zendoo, into Sikoba’s platform will allow for an added layer of security and transparency for its users. Sikoba will anchor its own blockchain to Horizen’s public blockchain by building on top of Horizen’s sidechain protocol, Zendoo. The Merkle root of every block of Sikoba’s federated blockchain will be registered on a Horizen sidechain. Sikoba will also generate a corresponding Merkle path for every transaction. Users can then verify their transactions using only the Merkle root on the public blockchain and the transaction’s Merkle path. Thus by layering the two chains, utilizing Zendoo, Sikoba can establish trust that its users’ debts and credits are properly registered.

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“Due to the nature of Sikoba’s financial data, its blockchain system needs to be completely reliable for data management – Horizen is thrilled to partner with Sikoba to provide this, and to help its users obtain transaction certainty and establish a credit history via the blockchain” said Rob Viglione, Co-Founder of Horizen. “Horizen’s partnership with Sikoba is a great early use case for Horizen’s sidechain technology, Zendoo, as it showcases one of the many mainstream adaptations for interoperable and transparent sidechain tech.”

While this is one of Zendoo’s early use cases, there are a wide range of future applications of scalable, interoperable sidechain technology within commercial, enterprise, banking, and public infrastructure industries.

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