Ault Blockchain Reveals Debanking Risks Inspired Its New Layer-1 Initiative

Ault Blockchain has revealed the rationale behind the development of its upcoming L1 network. It noted that multiple banking problems have been significant influences on the project.

Why Is Ault Blockchain developing A Layer-1 Network?

Ault Capital Group, a subsidiary of Hyperscale Data, is developing the blockchain. This network eyes to facilitate digital settlement, tokenized assets, and decentralized trading.

The project coincides with ongoing discussion in the United States on how to provide banking services to businesses involved in cryptocurrencies. Moreover, the so-called “debanking” issue has been brought to light following the loss of banking services by businesses conducting lawful activities in areas like digital assets, even though they operate within regulatory bounds.

While the CLARITY Act also aims to resolve the debarking issue, crypto firms are also stepping up. For context, Ault Blockchain says its blockchain was designed to cut down on the need for traditional financial institutions in settlement processes.

The network is not just about reducing costs or improving speed. Rather, it’s more about offering a platform that will continue to serve regardless of banking partnerships.

Todd Ault, founder of Ault Blockchain, has previously spoke about a few banking disruptions in companies under his leadership. According to him, one business was unable to access the money it had in its account during the COVID-19 period and was asked to transfer it to another account within a certain time frame.

These experiences are what affected the design of the project. Hence, Ault Blockchain will be developed as a Layer-1 network with an Ethereum Virtual Machine (EVM) compatible design. The platform will be used for tokenized real-world assets and other financial applications on blockchain.

The company also pointed out that the network has been designed with compliance at its core. There will be a Wyoming DAO LLC structure for governance. The participants will have to be identified, and voting entitles will have restrictions that are designed to prevent an undue centralization of control.

A Look At Native Token Dynamics

However, Ault Blockchain network is not intending to conduct a public sale of its native token, unlike many blockchain projects. Instead, tokens are supposed to be distributed in the long-term in a timetable that is tied to participation of mining nodes on the network and measurable activity.

The background of the project is also unique compared to most of the L1s. It comes from a publicly listed corporate group that operates in three sectors: Bitcoin mining, AI hardware, data centers. This focus on creating blockchain infrastructure that could support compliant businesses without being dependent on traditional banking relationships, the company added.

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