Round 7 - Seed Fund
304,740

XLM, worth $

131,973.75

*

Blocknify - legally binding e-signature to any Stellar transaction

Our solution allows you to legally sign documents that can be independently verified at any time (without Blocknify) and can be tied to any asset transfer on the Stellar network. We have already processed over 650 signatures on the Stellar network.

Stellar has allowed us to be the first court-admissible e-signature SaaS solution with entirely transparent signatures through client-side operations and decentralization in every step. We use the Stellar Network as our immutable public notary for each signature. Instead of Blocknify being the black box of truth, Stellar allows us to give each signer all the tools and data to verify their signatures against Stellar and independently from us or anyone else. Our signature audit trail (attached to every signed document) contains everything you need and directions on reconstructing the signature hash posted to the Stellar Network.

We believe in the power of lowering the barrier to operate in a fair system. Legal contracts are vital to setting the context and terms of a business transaction so that all parties can be treated fairly. Many payments are made according to a contract, such as loan agreements, payments around a service or product, tokenization agreement, equity agreement, and many others. However, payments are often detached from their context. Our solution allows you to tie a legally binding e-signature and PDF to your payment. This process ensures that if there is a dispute, signers can easily provide the needed information and validation against the Stellar transaction.

Currently, our product allows you to:

  • Sign or send a document (PDF) to be signed within two clicks using our chrome extension or initiated via our API.
  • Signers receive an email with a unique link to sign the document via our web application (no installation needed).
  • Signers verify themselves via SMS (ID/KYC verification pending for large transfers), create a signing PIN, and then view their document and sign.
  • The signature is packaged with the information we have collected from the signer, hashed, signed (with the signer's private key), hashed again, and submitted to the Stellar Network as a Memo.
  • Once all signers have signed the document, everyone receives the final document with an attached audit trail. This audit trail contains all the needed information to verify any signature at any time without requiring any input from Blocknify and the linked transaction on https://stellar.expert.
  • The audit trail contains the document fingerprint (hashing of the document's visual content) and the signer's public key, name, phone number, and raw signed data. At any time, a signer can use the audit trail and instruction to reconstruct any one of the attached signatures and going from their identity, document, time information to our signature hashed posted to the Stellar Network with standard tools.

What this means for the Stellar ecosystem

  • It lowers the barrier to creating fairer and legally enforceable asset transfers within the Stellar ecosystem.
  • An additional tool for transacting assets on the Stellar network.
  • Our APIs can easily be added to any existing platform or solution using the Stellar network by using an iframe.
  • We provide white labeling of our web application and chrome extension.
  • We support templating to allow for easy PDF generation.
  • Ability to get documents signed in complete privacy.

We know creating a legal document itself can be unfair. Therefore we would love to work with our legal network and other for-profit and non-profit groups to make it easier to generate contracts. Our template solution allows us to sign the template, allowing signers to feel safe that this "standard" contract is a word for word copy of the known standard agreement.

Case study

One of our existing customers is an international venture capital firm that uses Blocknify to sign all its investments. We are now working with them to lower the cost of foreign investments by transacting the investment via Stellar using Blocknify to sign and transfer their investments.

The investor will send over their convertible note via Blocknify (as they already do) to the company they want to invest in and the financial partner at the firm. Blocknify will create a holding account with the investor and investee as signers and create a collection of signed transactions pre-signed by the investor and investee.

Once the investment company has signed the document, the last partner will sign the document and transfer from their bank account to an anchor. When the signer's signed the document, they will also sign a collection of Stellar transactions. The anchor will make the Stellar transfer to the holding account. Blocknify will submit the pre-signed transactions to transfer the tokens from the holding account to the investee. Allowing the investee to transfer the investment to their local anchor easily.

International investments can now be made via local transfers, and investment documents are signed and tied directly to the investment payment. At this moment, we are aligning the right anchors to enable this investment group with their target investees.

Another use case

Token transfers:

  • A buyer wants to buy a token.
  • The seller calls Blocknify API, the token contract is created, and the signing session opens within an Iframe.
  • The signer verifies themselves, signs the document, and payment URI is created.
  • The signer sends their payment with the tied signature hash.
  • The final signed document and audit trail are sent to the buyer and seller with the signed token agreement, stellar transactions, identity information, and all the information needed to validate their signature against the signature hash.  
  • The seller is then able to make the transfer of the purchased token.

How are we different from other e-signature solutions:

We have focused on creating a solution where technology creates trust rather than marketing.

While there are many other e-signature solutions, however, almost all of them are centralized black boxes requiring you to trust them / rely on them. Keep in mind most of these solutions are quite old (in technology years) and have the benefit of the doubt from their users that "they have this figured out." For example, many cloud e-signature solutions keep a copy of your document as the source of truth, control the identity, and key management. This is the easiest way to do this process. One issue is that you must rely on them to verify the signed document and provide all the identity records and internal system time stamps. They only provide some basic information. These programs are also expensive. Other non-SaaS methods are privacy-focused but are painful.

While I don't believe they have any malicious intent, we see this centralized black box as an unnecessary risk, especially with new technology (e.g., Stellar).

Instead of holding the document forever, we came up with a way to clean the document and verify its visible elements on the client-side. Files can collect much noise as time goes on; however, a signature is only concerned about the visual elements. We use standard PDF parsing to breakdown the PDF to its visible elements and create hashes of hashes. This process ensures that even if one pixel is changed, then the document fingerprint is entirely different while ensuring the document's complete privacy. However, this also enables us not to require centralized control or require Blocknify to store a clean source of truth version and allows our signers to reverify their documents at any time client-side.

As other solutions create their black box immutable timestamps, we use Stellar as our immutable public witness. Instead of holding all the information in a black box and making you trust us, you can independently verify our signature with the attached audit trail sent out to all the signers after everyone has signed.

We support our goal of building trust and privacy in three ways.

First, our solution is built to specification one of the most strict e-signature laws, eIDAS (EU) advanced electronic signature. By following eIDAS, we also satisfied e-signature laws of over 60+ countries that follow eIDAS, such as Switzerland. Due to our signatures being transparent, signers can verify how we created their signature, ensuring we follow the rules. Our e-signature solution is currently being used by law firms (https://www.karanovicpartners.com/k-signing/), financial services, and other regulated industries.

Second, our signatures and document verification are constructed entirely client-side and allow for decentralized verification. Because you can't blindly trust the front-end, all signatures are validated. For our public solution, we validate signatures on our backend. However, we can delegate this verification to another backend. Our new library will provide an easy way to verify the document and signature info against the posted stellar transaction. This will allows us to still facilitate signatures without needing to view any sensitive information. In the future, we would like to use zero-knowledge-proofs for all identity info, which allows us to verify the identity information on our backend without knowing the real information (let us know if you have experience in this!).

Third, our audit trail contains everything you need to verify any signature, without any data from Blocknify independently. After every signer has signed the document, a final document is sent with an attached audit trail. This audit trail is just the collection of the signature documentation, and because of that, it can be constructed without Blocknify for high privacy uses. It has all the needed information to reconstruct signatures and independently verify each signature on the Stellar Network.

All audit trails contain all the needed information and detailed instructions on how to legally validate signatures. We also created an open-source code that will automatically validate the signature, document, and posting account within the browser (https://github.com/Blocknify/Signature-Validation). You can also add this to your website to make it easy to validate signatures.

Blocknify has been around since early 2018

We graduated from the F10 accelerator (managed by the Swiss Stock Exchange) and StartupYard (the oldest accelerator in CEE). We have clients and partners from financial service companies (Raiffeisen International Bank), law firms (https://www.karanovicpartners.com/k-signing/), and other regulated industries (https://big-swiss.com/about-us/#network).

Recent updates

With our Seed funds, we were able to bring our Stellar based e-signature to life. We also were able to create the groundwork for adding stellar payments. However, we ran into a couple of issues with existing anchors. As we would like this product to be focused on new users, we want to line up operating anchors within at least two currencies and then find beta users for those currencies. We have found beta users but not the corresponding anchors that these users need. This is important because the users need clear on-ramp and off-ramp.

We have been able to extend our functionality to expand our adoption. We are currently in the final phases of bringing our integrations to life. In the coming month, we will be launching on the AWS marketplace and Microsoft Power Apps. The goal is to leverage our low operating cost to enable high-volume workflows where these workflows already are happening. For example, users will be able to easily add e-signature to an existing onboarding workflow within Microsoft Power Apps for a fraction of DocuSign's cost.

Why the Stellar Network?

In the beginning, we used a private Ethereum network. We then tethered our private network to the main net for accountability and control of our cost. However, running our own private network created additional complexity and undermined our mission for trust to be built-in.

We choose Stellar because of the ease of use, excellent documentation and community tools, mission, cross-currency transactions, specialization around asset-backed tokens, and low cost.

We believe in Stellar's future and the ability to lower the barrier and cost of transferring assets anywhere in the world. We believe Stellar's mechanism of creating trust and legitimacy is a massive factor in reducing the barrier of using DLT. We hope we can play our part in lowering that barrier by making it easier to sign contracts and tying them to asset transfers to help encourage fair and safe transactions.

What will we do with the funds?

We will directly spend 70% of the funds around marketing and integrations with clear ROI. As we already processed over 650 signatures on the Stellar network, we are now looking to scale our user base. We will not compete with general signers, and there is little reason to fight for those users. Instead, many platforms want to offer e-signature directly, but due to the high cost of DocuSign and others, they require users to bring their license to their platform. Our goal is to make e-signature a commodity and enable high volume workloads. We solve this issue by enabling cost effective high-volume white label e-signatures that they can offer directly to their users.

The remaining 30% will be used for product and system improvement.

We estimate that these funds will enable us to become profitable and sustainable. We plan not to raise any additional funds but rather use our revenue to sustain ourselves. We believe this is very attainable as we have an in-market product.

Links


*The USD valuation of the award in XLM is calculated using the CF Stellar Lumens-Dollar Settlement Price on September 27, 2021 as administered, maintained, and reported by the cryptocurrency index provider CF Benchmarks Ltd. (using the ticker “XLMUSD_RR”) (available at https://www.cfbenchmarks.com/indices/XLMUSD_RR)