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HSBC Bangladesh uses blockchain to import 20,000 tons of fuel oil from Singapore

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The Bangladesh branch of global banking firm HSBC has conducted the country’s first blockchain-based letter of credit transaction on the Contour DLT platform.

The transaction was used to settle the importation of 20,000 tonnes of fuel oil from United Group’s Singapore subsidiary United Mymensingh Power.

HSBC Bangaladesh’s chief executive, Md Mahbub ur Rahman, described the transaction as showcasing the bank’s commitment “to supporting cross-border trade by Bangladeshi businesses using cutting-edge technology platforms.”

“I believe this will usher in a new era of routing international trade transactions as businesses and governments recognize transparency, security and swiftness in performing tasks using blockchain technology.”

Global payments service SWIFT estimated that Bangladeshi trades using letters of credit, or LCs, were worth more than $34 billion during the first half of 2020. 

By utilizing blockchain technology, the time taken to process the transaction was reduced from between five and 10 days to less than 24 hours. United Group’s managing director, Moinuddin Hasan Rashi, said:

“Fuel oil LCs are highly time-sensitive where every second counts and we believe this blockchain technology will help to manage time efficiently and also ensure increased efficiency and better cost management.”

Contour is a blockchain platform built using R3’s Corda that connects financial institutions and corporate entities in a “decentralized trade finance network.” 

Contour is owned by eight financial institutions including HSBC, ING, Citi, Bangkok Bank, BNP Paribas, Standard Chartered, SEB and CTBC. The platform’s development began in mid-2017, then dubbed “Voltron,” before launching in closed beta the following year.

Eighty different entities spanning 17 countries tested Contour leading up to its commercial beta launch at the beginning of 2020, with the platform exiting beta just one month ago.

Contour has also been used to settle a 176,000 iron ore trade between Malaysia and China, with the Philippine-based Asian Development Bank also using the platform to execute the first cross-border blockchain LC transaction between Vietnam and Thailand.



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Blockchain

A review of SushiSwap roll-outs

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Launched in August 2020 as a fork of the Uniswap decentralized exchange, SushiSwap briefly surpassed its competitor. Now ranking third behind Uniswap’s v3 and v2, the DEX rolls out numerous integrations with major networks beyond its native Ethereum blockchain to offer users a single entry point and lower fees. 

The SushiSwap protocol is one of the largest proponents of a multi-chain future in decentralized finance as the DEX is already live on Ethereum, Binance Smart Chain, Polygon, Avalanche and Fantom. Data by Covalent provides insight on SushiSwap across these five chains.

Data reveals the most popular chain by the number of swaps executed daily is Polygon, as the protocol usage skyrocketed in May. Polygon continues to set new records as it hosted 120,000 swaps on SushiSwap recently.

Left far behind, Ethereum ranked second as of June 2021 by daily swap count. Fantom and Avalanche tend to follow the same trend as Ethereum, although the gaps among the three have been widening since the active trading days in late May. Avalanche and Fantom even outstripped Ethereum by the number of transactions on May 19, when a market-wide liquidation frenzy occurred.

A closer look at daily swap volume shows a different story. The dominance of Ethereum in SushiSwap had been unshakable for a long time, with the peak of trading volume at almost $3 billion on May 21. However, Polygon overtook Ethereum by swap volume in June with a $420-million mark, which highlighted the rapid take-off of the layer-two scalability solutions. 

The reduction of transaction costs is the major driver behind the adoption of a multi-chain approach. SushiSwap has achieved this by offering options outside of Ethereum. Data on gas usage on Ethereum and other chains could not even be compared in one chart due to a dramatic difference in numbers.