13 ms·

ASX drops plan to replace CHESS with blockchain, writes off AUD $250M

225 points by raasdnil 4y ago

sva_ 4y ago
> The report estimated the application software for the new system is still only 63 per cent complete I wonder how they came up with this oddly specific number.
- origin_path 4y ago
  It says in the report. It comes from JIRA.
aryehof 4y ago
I see this as another example of a failed migration project that focuses on non-functional requirements of the system, at the expense of functional requirements. Time and time again we see the same result in projects costing taxpayers or shareholders millions. There seems to be no shortage of those (at every level) ready to believe that one can just apply some “technologies” to very complex legacy systems that will result in something new and effective.
raasdnil 4y ago
ASX is the Australian Stock Exchange.
- blowski 4y ago
  And Chess is the "clearing and settlement system".
  - lynx23 4y ago
    Where does the "H" in CHESS come from, then?
    - haunter 4y ago
      Clearing House Electronic Sub-register System https://www2.asx.com.au/about/regulation/clearing-and-settlement-of-cash-equities-in-australia/settlement https://www2.asx.com.au/about/regulation/clearing-and-settle...
      - rsynnott 4y ago
        This definitely feels like a backronym.
    - deleted 4y ago
      [deleted]
  - rsj_hn 4y ago
    Clearing House Electronic Subregister System https://www.commsec.com.au/support/help-centre/About-the-sharemarket/What-is-CHESS.html https://www.commsec.com.au/support/help-centre/About-the-sha...
easytiger 4y ago
Blockchain coolaid and little more. Bought by non tech people who have no understanding of the technology whatsoever
danuker 4y ago
Blockchain is not needed where one server suffices.
- unsupp0rted 4y ago
  But then it’s not decentralized, which is bad, because decentralized is good, even if all the decentralized infrastructure is entirely owned, controlled and modified by a central entity unilaterally on a whim.
  - Zoadian 4y ago
    you don't need a blockchain to decentralise anything. blockchain only makes sense in a case where there is no central authority.
    - deleted 4y ago
      [deleted]
  - Gigachad 4y ago
    The ASX is already centralised.
  - helsinkiandrew 4y ago
    A Stock Exchange is the antithesis of a distributed system. The reason they exist is so it's a central place where everyone goes to buy and sell and the prices are public and fair. And a clearing house is by its nature a centralised system (A owes B $100, B owes C $100, so A gives C $100) That's why the majority of crypto is bought and sold at crypto exchanges rather than on the blockchain.
  - blitzar 4y ago
    Mirror the DB across two servers, boom decentralized achievement unlocked
- stevage 4y ago
  It's not needed for any legal business.
XorNot 4y ago
A couple of years back I remember receiving a recruitment offer to come build this. I both declined and laughed about it.
- gramie 4y ago
  Yes, but you missed a chance to get paid a lot of money and not have to produce anything in the end except buzzwords and TPS reports. Like everyone else involved. That $250M didn't just evaporate, you know.
nly 4y ago
The age of companies with terrible ideas wiping their arses with money like it's toilet paper has come to the end... for now. How the smeg does an MVP or PoC for something like this even cost $250M?
- nikanj 4y ago
  $250k for the implementation, $2.25M siphoned off to the founders’ personal accounts. It’s grift all the way down
  - cormacrelf 4y ago
    You're off by two orders of magnitude
    - deleted 4y ago
      [deleted]
    - pyb 4y ago
      But the ratio is correct.
  - lwansbrough 4y ago
    Okay and the other $245,000,000? Lol.
BFLpL0QNek 4y ago
I wonder what this means for Digital Asset https://www.digitalasset.com/ https://www.digitalasset.com/. The ASX brought 5.4% of digital asset and from what I heard, they were a core part of building the system. https://www.ledgerinsights.com/asx-150-million-in-blockchain-stock-settlement/ https://www.ledgerinsights.com/asx-150-million-in-blockchain...
- tdullien 4y ago
  I'd presume that DA's anchor project is dead then...
- mkj 4y ago
  There's no Australia on the Digital Asset homepage world map, I guess it's not happening any more.
  - badcppdev 4y ago
    ASX is still on their 'Our Partners' page ... for the moment
  - twp 4y ago
    It's here: https://www.digitalasset.com/use-cases/clearing-settlement https://www.digitalasset.com/use-cases/clearing-settlement
tiku 4y ago
At my bank, if I buy stock, it takes 5 days to clear/settle. Guess they do it by hand haha.
- dorkwood 4y ago
  In my experience, CHESS takes 2-3 business days.
  - blitzar 4y ago
    The settlement cycle for cash equities in Australia is trade date plus two business days (T+2) from trade. The settlement cycle for the NYSE is two business days after the day the order executes, or T+2 NADAQ T+2 settlement cycle, etc. etc. etc. Thats how it is meant to be.
vermilingua 4y ago
I can’t remember what thread it was, but someone here commented recently that when these consultancies produce this vapourware, it’s effectively just an expensive study to determine the viability of a product. In this case, $250m seems to me a reasonable sum to ensure that the ASX will never again get tangled up in crypto pipedreams.
- mjburgess 4y ago
  Yes, that was my initial conclusion after reading the report. Some company was parasitically using them to drum-up interest in this useless product area.
- tiku 4y ago
  Well blockchain is a very valid case for tracking assets like stocks. I guess the implementation and backwards compatibility is a big issue, also other banks don't want to hop on the hype train etc.
  - esja 4y ago
    Why does blockchain have a valid case for "tracking stocks"? We've been doing that for decades. Blockchain is a step backwards in many areas. So what positive benefits does it offer to compensate for its weaknesses?
    - csomar 4y ago
      Tracking stock ownership (at least in the US) is both messy and slow. And companies do either make mistake or do not honor their engagements (a la FTX, for example, by not actually having the stock and trying to procure it later when needed). A blockchain solution can make settlements faster, final and prevent the current issues. It also means you no longer need a broker to hold your stocks/assets. More sophisticated users can run their own "wallet".
      - newswasboring 4y ago
        This is a bizzare comment. To show how Blockchain can help you use the most recent example of Blockchain ecosystem failing?
gjvc 4y ago
excellent news.
- __d 4y ago
  Ultimately, yes. It was a stupid idea from the start. With any luck, the replacement program for the replacement program is a little more focused on reality, but ... I wouldn't hold my breath.
badcppdev 4y ago
Where did the money go?? Seems like the delivery partners were: * Digital Asset’s Daml smart contract development capability * VMware’s DLT (blockchain) platform Does anyone have any information about those?
- OmegaEnzoRed 4y ago
  https://blog.digitalasset.com/news/afr-asx-blockchain-to-go-live-at-end-of-2020 https://blog.digitalasset.com/news/afr-asx-blockchain-to-go-... https://blog.digitalasset.com/press-release/asx-digital-asset-and-vmware-join-forces-on-dlt https://blog.digitalasset.com/press-release/asx-digital-asse... I wonder if ASX was project managing this internally or just throwing poorly thought out requirements over the fence.
rado 4y ago
Accenture being useful
- __d 4y ago
  Accenture was brought in to justify the decision that was already made to kill the project, because the internal management didn't have the confidence to make and sell their own decisions. And this isn't the first time. A few years ago, ASX ran a massive project to replace the matching engines for all their exchanges. After burning a large pile of money, it too blew up, and they abandoned the whole idea. But everyone involved fails up and out with their careers and bonuses intact, so ... she'll be right, mate. No worries.
- zhte415 4y ago
  Of course Accenture didn't like it. It was internally managed with no involvement of them or a peer consultancy and thus must be condemned with fire, unsuccessful or not. Expect Accenture and those peers to be first in line for slices of future ASX pies.
deleted 4y ago
[deleted]
esja 4y ago
From the Australian Financial Review two weeks ago: "Unfortunately, ASX management and its board of directors have proven over the past seven years they do not have the technical skills to manage a large-scale technology project or the self-awareness to know that what they are doing is investing in a technology dead end." https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fchanticleer%2Fasx-s-drawn-out-chess-replacement-is-killing-innovation-20221102-p5bv0s https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fchanticl...
- esja 4y ago
  Hot off the press: "They were building a Frankenstein’: how ASX’s blockchain unravelled" https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fcompanies%2Ffinancial-services%2Fthey-were-building-a-frankenstein-how-asx-s-blockchain-unravelled-20221117-p5bz24 https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fcompanie... Some people are blaming "tech nerds" for having too much influence over the project. Really the problem was charlatans. If they had hired good tech people the blockchain concept would have been binned years ago. Another win for the Australian tech scene. Optus, Medibank Private, ASX... just embarrassing.
  - gonzo41 4y ago
    You get what you pay for. Australian companies operate like they live on an island, which is not far from the facts. Except for those pesky fibre optic cables, So getting pwned by Russian hackers still seems otherworldly to them. Our markets are somewhat captive, and thus most companies can be kind of lazy in their approach to, well everything really. But IT's pretty bad. Hopefully it'll start getting better.
    - thrown_22 4y ago
      Tall poppy syndrome is terrible. I've seen places which will rather hire 10 developers getting paid $80k a year than two developers getting paid $400k a year. You get what you pay for. The number of managers who will not hire someone getting paid more than them is astonishing.
Safeerali 4y ago
Ya great
TheAlchemist 4y ago
What’s interesting is that the previous CEO of ASX left recently and said that the job is done, the tech is working and clients are testing - they just need to swap over in production - but he prefers the new CEO to be in drivers seat for that migration.
- shearichard 4y ago
  Even if their comments were sincere they wouldn't be the first suit to have a limited understanding of the Pareto principle. Also if there's a new CEO they are certainly going to want to clear out the cupboards, hence the call to Accenture (doubtless with some significant guidance on what the client expected in the report).
  - quickthrower2 4y ago
    I loled at the % done figure in the article. You eventually realize there are 2 dones: 0 and 100% :-) This is why continual delivery is preferable over a big bang. What could you blockchainify for a million. Then the lesson that blockchain is crap is cheaper.
    - urthor 4y ago
      You can't really do Orthodox ScrumMaster 2 week, incremental continual delivery for something like this. Where are your small incremental milestones? How do you deliver working software every two weeks? This was just a big, hard, database project. It's not a "textbook" easy to deliver project. You just need smart cookie project managers and Chief Engineers to manage whether you do 1 week milestones or 1 month milestones.
      - quickthrower2 4y ago
        I think 6 weeks is better than 2 maybe, but it should be possible. If what you are doing is very novel those deliveries may be proof or disproof of concepts. The customer being yourself in a way. In 6 weeks it should be possible to deliver “does blockchain make sense”. The question is if the answer is NO does the org have the guts to can it. Someones paycheck might depend on keeping it going.
shearichard 4y ago
If you're interested in some lower level details this article gets into what was seen as the limitations of the technology https://www.theregister.com/2022/11/17/asx_blockchain_reading_project_paused/ https://www.theregister.com/2022/11/17/asx_blockchain_readin... . It's not clear to me whether the $A250M was the direct costs to the Exchange (ie invoices + ASX staff time) or the value which the Exchange was carrying the software on their books at ?
- neffo 4y ago
  > It's not clear to me whether the $A250M was the direct costs to the Exchange (ie invoices + ASX staff time) or the value which the Exchange was carrying the software on their books at ? They are the same thing. The wage, service and material costs through development are capitalised as an intangible asset. (Essentially the attributable development costs become the value of the asset.) This intangible asset just got written down to zero as it was accessed as having zero future economic return.
  - shearichard 4y ago
    I'm not an accountant ... but is this always true ? Isn't the software that underlies a Stock Exchange looked upon in the same way that, say, the brand value is ? If the development that has now been abandoned had turned out to be raging success wouldn't this have increased the value of the ASX ? And, in that case, wouldn't that software be treated as something which partially constituted the value of the ASX in the same way that patents held by ASX would have a value ? As I say I'm not an accountant ;-)
AttakBanana 4y ago
> Accenture highlighted governance flaws on both the ASX and delivery partner sides, including “inefficiencies in the delivery lifecycle through to testing, with siloed execution and reporting resulting in misaligned views of status on delivery progress, risks and issues.” Sounds like the problem was mismanagement. Let's not blame crypto for everything. I'm not saying blockchain was the answer to their problems, but it could have been a sub $10M mistake if not for the terrible management.
- shitcoder 4y ago
  I'm glad I found this on the thread at least. Here's the Accenture report in full published by ASX: https://www2.asx.com.au/content/dam/asx/markets/clearing-and-settlement-services/asx-chess-replacement-application-delivery-review-2022.pdf https://www2.asx.com.au/content/dam/asx/markets/clearing-and... They failed to architect the project properly by trying to run everything on the blockchain smart contracts instead of leveraging something off chain. Similarly there was mismanagement from DA (the developers) and ASX with no clear goal of what the end product looked like or how progress was being made. Accenture even call out that a blockchain solution might not have been the best one considering the ASX centrally settles trades anyway. The pdf is a good read into the technical and management failings of the project
- urthor 4y ago
  The issue is, this was one of the only major Blockchain projects in the world that wasn't... suspect. Much harder to convince anyone to do Blockchain work now. It's a blow to Blockchain's reputation.
habibur 4y ago
So we are basically back to SQL servers for data storage. All other hypes are dead. 20 years.
- bryanph_ 4y ago
  SQL servers with JSON support that is ;D
  - quickthrower2 4y ago
    SQL, JSON … as if the pragmatic standards that let people get shit done eventually and quietly eat the world.
- urthor 4y ago
  Monolithic Mainframes are definitely the hip and trendy thing. You can run a ridiculously large business off a monolithic RDBMS.
doctor_eval 4y ago
What drives me nuts is that, as far as I can tell, all the players get to keep their share of that $250 million. There’s no talk of sanctions, nobody seems to be losing their job, the board is still pulling down their fees. So many large Australian institutions have been captured by consultants, snake oil peddelers and grifters, all with their hands in the jar. It’s embarrassing.
- russelg 4y ago
  That's exactly what the last federal government wanted, after all that's how they operated as well.
- urthor 4y ago
  Technology as a cost centre mentality. Time and time again, Australian non-tech companies cut technology jobs to cost cut. Anyone competent looking to build a long term career working in the corporate sector either moves to sales/marketing. Or, these days, moves to Atlassian/Canva. Over a rolling 20 year period, the process self selects for the least able. The IQ at the "Head of Engineering" level in Australian non-tech is minuscule. Selection bias. Most of them don't have CTOs, they have CIOs who report to an accountant in the C-suite.
  - esja 4y ago
    Bingo. Adverse selection in action... they've created a "market for lemons". All the offshoring and outsourcing (and cultural disdain for technical people) means they can no longer tell the difference between charlatans and good tech leaders. But the good people know how to avoid them.
neffo 4y ago
It's hard to give non-Australian investors a sense of how bizarre this was. The ASX still provides CHESS holding statements (updates when you transact shares, when codes change or you are otherwise issued new shares)... by post. On paper. There is no other option. Before they fixed that they wanted to move CHESS to a blockchain. Wild.
- levymetal 4y ago
  ASX now offers electronic delivery of CHESS holding statements and notifications: https://www2.asx.com.au/investors/start-investing/electronic-delivery-of-chess-notifications https://www2.asx.com.au/investors/start-investing/electronic... However, holders can’t opt themselves in; inexplicably this needs to be supported at the broker level. I’ve spoken to one of the large brokers who advised me they have no plans to support this feature.
- stevage 4y ago
  Honestly I'm relieved to learn I'm not just an idiot who didn't know how not to get the letters.
- urthor 4y ago
  It's even crazier talking to the people involved. The project got the underlying Blockchain tech from VMware... AND had a requirement for a backup "traditional" RDBMS system. So, complete feature duplication of the core, mission critical application. Scope creep was crazy. Someone who doesn't understand the technology went "blockchain yeah sure mate let's go." Good project managers are so important.
  - manquer 4y ago
    Good PMs would be replaced when they say a firm no in such top down projects
    - dopidopHN 4y ago
      Yeah that my thougt as well. That type of things fall from the sky on PM and they have to deal with the new direction. Maybe product director / VP or whatever
taspeotis 4y ago
But how will this centralised and trusted authority maintain a list of who owns what now? A database??
shitcoder 4y ago
This is Accenture's report into the project as commissioned by the ASX. I encourage people to read it as it goes into the technical and management details as to why it failed: https://www2.asx.com.au/content/dam/asx/markets/clearing-and-settlement-services/asx-chess-replacement-application-delivery-review-2022.pdf https://www2.asx.com.au/content/dam/asx/markets/clearing-and...
- madeofpalk 4y ago
  Did Accenture tell them to build on blockchain in the first place?
  - blitzar 4y ago
    It reads like accenture might have reccomended the accenture blockchain a few years ago.
  - mrjin 4y ago
    Do you really think they care?
  - thedataangel 4y ago
    I don't _think_ Accenture were the original or primary contractor. I'm Australian and interviewed with Digital Asset for that project - as far as I'm aware, DA were the main company responsible, although from what I've heard from people working on it, a lot of the failure stems from mismanagement on the ASX side.
- chris_wot 4y ago
  lol “Greater consideration is required regarding the purpose of the consensus layer given ASX’s position as the central market operator for the CHESS use case.” And “ From a participant standpoint in the current design and architecture (not withstanding future use cases), there is little value to processing all the business logic on-ledger as ASX maintain data integrity as the market operator and participants receive a point-in-time view via API contracts.”
  - 4y ago
gregjw 4y ago
Someone has made a lot money without having to deliver anything. Maybe they should modernise, rather than chasing buzzwords.
ohmychain 4y ago
> Accenture highlighted governance flaws on both the ASX and delivery partner sides, including “inefficiencies in the delivery lifecycle through to testing, with siloed execution and reporting resulting in misaligned views of status on delivery progress, risks and issues.” They should have used blockchain - put your daily status and reporting on a blockchain and have it visible to everyone in a decentralized manner. No more silos or misaligned views. This is one of the many problems that blockchain solves.
excerionsforte 4y ago
Blockchain is a valid solution for fast settlement clearing between market participants. JPM and Visa have already proven it their private blockchains. NASDAQ among others are experimenting with their own private blockchains. JPM use of their own Onyx blockchain makes the repo market far more efficient: https://www.bloomberg.com/news/articles/2020-12-10/jpmorgan-using-blockchain-to-move-billions-in-repo-market-trades https://www.bloomberg.com/news/articles/2020-12-10/jpmorgan-... Visa B2B Connect for global payments: https://developer.visa.com/capabilities/vba https://developer.visa.com/capabilities/vba I get it, blockchain makes for a flashy clickbait headline. There are bigger problems in the project than the selection of blockchain as a solution. - Project was 63% with an uncertain timeline to completion. That alone is a red flag for any enterprise project. - The teams involved weren't communicating with each other resulting in confusion. aka "misaligned views". - When it comes to scalability, there is no way to rate limit participants, so they could screw the system given it couldn't process more than 100k transactions (not sure what rate since it is unspecified). There are multitude of issues that justify canning the project. For those unaware ASX used VMWare's DLT blockchain: https://www.vmware.com/welcome/asx.html https://www.vmware.com/welcome/asx.html. There's nothing "scammy" about it. I'm unsure of why people in the comments here are still confused between cryptocurrency and blockchain especially since they have distinct names. If you're gonna point out incompetence, you have to realize your own faults as well. Anyone who claims to have enough information to make a determination about blockchain tech being the cripple here doesn't have the information required to make it given the problems pointed out. There's plenty of financial industry users making use of it already. Lots of tunnel vision below, but that's unsurprising given the hate against crypto (which people below often confuse with blockchain). I remember the same bias against K/V dbs (NoSQL). People would blame the tech choice rather than the circumstances. It's easier for certain types to blame tech for everything then hail it when the project succeeds even though it was only one part of the equation.
- stephen_g 4y ago
  But the problem still remains that there are almost always ways of doing anything that these ‘private blockchains’ do without a blockchain, that often work better… This was one of those times.
stephen_g 4y ago
This project was stupid from the start, I could never see it working. It never made any sense using ‘distributed ledger technology’, the ASX are the central authority and they want to be in that position… Making anything distributed isn’t actually useful to them or people who interact with them… They just got caught up in ‘blockchain hype’ and clearly there were some sales people in the right place, at the right time. Some people must have got away with serious cash from this boondoggle.
- gramie 4y ago
  I remember sitting in on a meeting with some high-priced consultants who solemnly declared that "the future of the web is blockchain". We were discussing an update to our main university website. The consultants had probably each earned my monthly salary to drive down from Toronto for that afternoon meeting. The other developer and I just looked at each other and wondered quietly if the consultants knew they were talking gibberish.
sethd 4y ago
> The report estimated the application software for the new system is still only 63 per cent complete, with an “uncertain” timeline to completion Does anyone actually believe the level of precision coming from this report? I bet good money that remaining “37%” would take way longer to complete than that supposed “63%” did. Oh, Accenture created the report, so it must be accurate, never mind. /s
- sweezyjeezy 4y ago
  That's typical in these kinds of reports. I wouldn't necessarily read that as Accenture believing they have 2 s.f. precision. If you put something like 60±20% in a report like this, to the audience it might look like you've done a bad job and have no idea what the real number is.
  - delusional 4y ago
    It may be even more banal than that. If you start putting simple boxed uncertainties on numbers the reader might start adding their own uncertainties to your uncertainties when they communicate it further. I've found that when communicating with "leadership" it's best to not present anything difficult that requires them to make judgement, because they'll use that as an excuse to do what they wanted to do anyway (60±20% that's basically 80% and there's always some uncertainties with these things, so that's basically 90% so it's basically done, just ship it). Providing uncertainty is just asking someone else up the chain to pick the number. It's better to just pick it yourself to shape the conclusion you're going to make. The people making these decisions aren't scientists. They don't have any allegiance to your methodology or analysis. They just care about the conclusion.
- mrjin 4y ago
  I think the number might be plausible, but you know, even if you get 80% done, it's probably only 20% of the effort. The remaining 20% will require 80% of the effort, which is 4 times of the committed.
OhNoNotAgain_99 4y ago
langsoul-com 4y ago
I wonder why Australia even bothered. They have instant bank transfers, so it's not like the tech to do shit instantly, on scale doesn't exist.

225 points by raasdnil 4y ago

sva_ 4y ago

> The report estimated the application software for the new system is still only 63 per cent complete I wonder how they came up with this oddly specific number.

origin_path 4y ago
It says in the report. It comes from JIRA.

aryehof 4y ago

I see this as another example of a failed migration project that focuses on non-functional requirements of the system, at the expense of functional requirements. Time and time again we see the same result in projects costing taxpayers or shareholders millions. There seems to be no shortage of those (at every level) ready to believe that one can just apply some “technologies” to very complex legacy systems that will result in something new and effective.

raasdnil 4y ago

ASX is the Australian Stock Exchange.

blowski 4y ago
And Chess is the "clearing and settlement system".
- lynx23 4y ago
  Where does the "H" in CHESS come from, then?
  - haunter 4y ago
    Clearing House Electronic Sub-register System https://www2.asx.com.au/about/regulation/clearing-and-settlement-of-cash-equities-in-australia/settlement https://www2.asx.com.au/about/regulation/clearing-and-settle...
    - rsynnott 4y ago
      This definitely feels like a backronym.
  - deleted 4y ago
    [deleted]
- rsj_hn 4y ago
  Clearing House Electronic Subregister System https://www.commsec.com.au/support/help-centre/About-the-sharemarket/What-is-CHESS.html https://www.commsec.com.au/support/help-centre/About-the-sha...

easytiger 4y ago

Blockchain coolaid and little more. Bought by non tech people who have no understanding of the technology whatsoever

danuker 4y ago

Blockchain is not needed where one server suffices.

unsupp0rted 4y ago
But then it’s not decentralized, which is bad, because decentralized is good, even if all the decentralized infrastructure is entirely owned, controlled and modified by a central entity unilaterally on a whim.
- Zoadian 4y ago
  you don't need a blockchain to decentralise anything. blockchain only makes sense in a case where there is no central authority.
  - deleted 4y ago
    [deleted]
- Gigachad 4y ago
  The ASX is already centralised.
- helsinkiandrew 4y ago
  A Stock Exchange is the antithesis of a distributed system. The reason they exist is so it's a central place where everyone goes to buy and sell and the prices are public and fair. And a clearing house is by its nature a centralised system (A owes B $100, B owes C $100, so A gives C $100) That's why the majority of crypto is bought and sold at crypto exchanges rather than on the blockchain.
- blitzar 4y ago
  Mirror the DB across two servers, boom decentralized achievement unlocked
stevage 4y ago
It's not needed for any legal business.

XorNot 4y ago

A couple of years back I remember receiving a recruitment offer to come build this. I both declined and laughed about it.

gramie 4y ago
Yes, but you missed a chance to get paid a lot of money and not have to produce anything in the end except buzzwords and TPS reports. Like everyone else involved. That $250M didn't just evaporate, you know.

nly 4y ago

The age of companies with terrible ideas wiping their arses with money like it's toilet paper has come to the end... for now. How the smeg does an MVP or PoC for something like this even cost $250M?

nikanj 4y ago
$250k for the implementation, $2.25M siphoned off to the founders’ personal accounts. It’s grift all the way down
- cormacrelf 4y ago
  You're off by two orders of magnitude
  - deleted 4y ago
    [deleted]
  - pyb 4y ago
    But the ratio is correct.
- lwansbrough 4y ago
  Okay and the other $245,000,000? Lol.

BFLpL0QNek 4y ago

I wonder what this means for Digital Asset https://www.digitalasset.com/ https://www.digitalasset.com/. The ASX brought 5.4% of digital asset and from what I heard, they were a core part of building the system. https://www.ledgerinsights.com/asx-150-million-in-blockchain-stock-settlement/ https://www.ledgerinsights.com/asx-150-million-in-blockchain...

tdullien 4y ago
I'd presume that DA's anchor project is dead then...
mkj 4y ago
There's no Australia on the Digital Asset homepage world map, I guess it's not happening any more.
- badcppdev 4y ago
  ASX is still on their 'Our Partners' page ... for the moment
- twp 4y ago
  It's here: https://www.digitalasset.com/use-cases/clearing-settlement https://www.digitalasset.com/use-cases/clearing-settlement

tiku 4y ago

At my bank, if I buy stock, it takes 5 days to clear/settle. Guess they do it by hand haha.

dorkwood 4y ago
In my experience, CHESS takes 2-3 business days.
- blitzar 4y ago
  The settlement cycle for cash equities in Australia is trade date plus two business days (T+2) from trade. The settlement cycle for the NYSE is two business days after the day the order executes, or T+2 NADAQ T+2 settlement cycle, etc. etc. etc. Thats how it is meant to be.

vermilingua 4y ago

I can’t remember what thread it was, but someone here commented recently that when these consultancies produce this vapourware, it’s effectively just an expensive study to determine the viability of a product. In this case, $250m seems to me a reasonable sum to ensure that the ASX will never again get tangled up in crypto pipedreams.

mjburgess 4y ago
Yes, that was my initial conclusion after reading the report. Some company was parasitically using them to drum-up interest in this useless product area.
tiku 4y ago
Well blockchain is a very valid case for tracking assets like stocks. I guess the implementation and backwards compatibility is a big issue, also other banks don't want to hop on the hype train etc.
- esja 4y ago
  Why does blockchain have a valid case for "tracking stocks"? We've been doing that for decades. Blockchain is a step backwards in many areas. So what positive benefits does it offer to compensate for its weaknesses?
  - csomar 4y ago
    Tracking stock ownership (at least in the US) is both messy and slow. And companies do either make mistake or do not honor their engagements (a la FTX, for example, by not actually having the stock and trying to procure it later when needed). A blockchain solution can make settlements faster, final and prevent the current issues. It also means you no longer need a broker to hold your stocks/assets. More sophisticated users can run their own "wallet".
    - newswasboring 4y ago
      This is a bizzare comment. To show how Blockchain can help you use the most recent example of Blockchain ecosystem failing?

gjvc 4y ago

excellent news.

__d 4y ago
Ultimately, yes. It was a stupid idea from the start. With any luck, the replacement program for the replacement program is a little more focused on reality, but ... I wouldn't hold my breath.

badcppdev 4y ago

Where did the money go?? Seems like the delivery partners were: * Digital Asset’s Daml smart contract development capability * VMware’s DLT (blockchain) platform Does anyone have any information about those?

OmegaEnzoRed 4y ago
https://blog.digitalasset.com/news/afr-asx-blockchain-to-go-live-at-end-of-2020 https://blog.digitalasset.com/news/afr-asx-blockchain-to-go-... https://blog.digitalasset.com/press-release/asx-digital-asset-and-vmware-join-forces-on-dlt https://blog.digitalasset.com/press-release/asx-digital-asse... I wonder if ASX was project managing this internally or just throwing poorly thought out requirements over the fence.

rado 4y ago

Accenture being useful

__d 4y ago
Accenture was brought in to justify the decision that was already made to kill the project, because the internal management didn't have the confidence to make and sell their own decisions. And this isn't the first time. A few years ago, ASX ran a massive project to replace the matching engines for all their exchanges. After burning a large pile of money, it too blew up, and they abandoned the whole idea. But everyone involved fails up and out with their careers and bonuses intact, so ... she'll be right, mate. No worries.
zhte415 4y ago
Of course Accenture didn't like it. It was internally managed with no involvement of them or a peer consultancy and thus must be condemned with fire, unsuccessful or not. Expect Accenture and those peers to be first in line for slices of future ASX pies.

deleted 4y ago

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esja 4y ago

From the Australian Financial Review two weeks ago: "Unfortunately, ASX management and its board of directors have proven over the past seven years they do not have the technical skills to manage a large-scale technology project or the self-awareness to know that what they are doing is investing in a technology dead end." https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fchanticleer%2Fasx-s-drawn-out-chess-replacement-is-killing-innovation-20221102-p5bv0s https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fchanticl...

esja 4y ago
Hot off the press: "They were building a Frankenstein’: how ASX’s blockchain unravelled" https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fcompanies%2Ffinancial-services%2Fthey-were-building-a-frankenstein-how-asx-s-blockchain-unravelled-20221117-p5bz24 https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fcompanie... Some people are blaming "tech nerds" for having too much influence over the project. Really the problem was charlatans. If they had hired good tech people the blockchain concept would have been binned years ago. Another win for the Australian tech scene. Optus, Medibank Private, ASX... just embarrassing.
- gonzo41 4y ago
  You get what you pay for. Australian companies operate like they live on an island, which is not far from the facts. Except for those pesky fibre optic cables, So getting pwned by Russian hackers still seems otherworldly to them. Our markets are somewhat captive, and thus most companies can be kind of lazy in their approach to, well everything really. But IT's pretty bad. Hopefully it'll start getting better.
  - thrown_22 4y ago
    Tall poppy syndrome is terrible. I've seen places which will rather hire 10 developers getting paid $80k a year than two developers getting paid $400k a year. You get what you pay for. The number of managers who will not hire someone getting paid more than them is astonishing.

Safeerali 4y ago

Ya great

TheAlchemist 4y ago

What’s interesting is that the previous CEO of ASX left recently and said that the job is done, the tech is working and clients are testing - they just need to swap over in production - but he prefers the new CEO to be in drivers seat for that migration.

shearichard 4y ago
Even if their comments were sincere they wouldn't be the first suit to have a limited understanding of the Pareto principle. Also if there's a new CEO they are certainly going to want to clear out the cupboards, hence the call to Accenture (doubtless with some significant guidance on what the client expected in the report).
- quickthrower2 4y ago
  I loled at the % done figure in the article. You eventually realize there are 2 dones: 0 and 100% :-) This is why continual delivery is preferable over a big bang. What could you blockchainify for a million. Then the lesson that blockchain is crap is cheaper.
  - urthor 4y ago
    You can't really do Orthodox ScrumMaster 2 week, incremental continual delivery for something like this. Where are your small incremental milestones? How do you deliver working software every two weeks? This was just a big, hard, database project. It's not a "textbook" easy to deliver project. You just need smart cookie project managers and Chief Engineers to manage whether you do 1 week milestones or 1 month milestones.
    - quickthrower2 4y ago
      I think 6 weeks is better than 2 maybe, but it should be possible. If what you are doing is very novel those deliveries may be proof or disproof of concepts. The customer being yourself in a way. In 6 weeks it should be possible to deliver “does blockchain make sense”. The question is if the answer is NO does the org have the guts to can it. Someones paycheck might depend on keeping it going.

shearichard 4y ago

If you're interested in some lower level details this article gets into what was seen as the limitations of the technology https://www.theregister.com/2022/11/17/asx_blockchain_reading_project_paused/ https://www.theregister.com/2022/11/17/asx_blockchain_readin... . It's not clear to me whether the $A250M was the direct costs to the Exchange (ie invoices + ASX staff time) or the value which the Exchange was carrying the software on their books at ?

neffo 4y ago
> It's not clear to me whether the $A250M was the direct costs to the Exchange (ie invoices + ASX staff time) or the value which the Exchange was carrying the software on their books at ? They are the same thing. The wage, service and material costs through development are capitalised as an intangible asset. (Essentially the attributable development costs become the value of the asset.) This intangible asset just got written down to zero as it was accessed as having zero future economic return.
- shearichard 4y ago
  I'm not an accountant ... but is this always true ? Isn't the software that underlies a Stock Exchange looked upon in the same way that, say, the brand value is ? If the development that has now been abandoned had turned out to be raging success wouldn't this have increased the value of the ASX ? And, in that case, wouldn't that software be treated as something which partially constituted the value of the ASX in the same way that patents held by ASX would have a value ? As I say I'm not an accountant ;-)

AttakBanana 4y ago

> Accenture highlighted governance flaws on both the ASX and delivery partner sides, including “inefficiencies in the delivery lifecycle through to testing, with siloed execution and reporting resulting in misaligned views of status on delivery progress, risks and issues.” Sounds like the problem was mismanagement. Let's not blame crypto for everything. I'm not saying blockchain was the answer to their problems, but it could have been a sub $10M mistake if not for the terrible management.

shitcoder 4y ago
I'm glad I found this on the thread at least. Here's the Accenture report in full published by ASX: https://www2.asx.com.au/content/dam/asx/markets/clearing-and-settlement-services/asx-chess-replacement-application-delivery-review-2022.pdf https://www2.asx.com.au/content/dam/asx/markets/clearing-and... They failed to architect the project properly by trying to run everything on the blockchain smart contracts instead of leveraging something off chain. Similarly there was mismanagement from DA (the developers) and ASX with no clear goal of what the end product looked like or how progress was being made. Accenture even call out that a blockchain solution might not have been the best one considering the ASX centrally settles trades anyway. The pdf is a good read into the technical and management failings of the project
urthor 4y ago
The issue is, this was one of the only major Blockchain projects in the world that wasn't... suspect. Much harder to convince anyone to do Blockchain work now. It's a blow to Blockchain's reputation.

habibur 4y ago

So we are basically back to SQL servers for data storage. All other hypes are dead. 20 years.

bryanph_ 4y ago
SQL servers with JSON support that is ;D
- quickthrower2 4y ago
  SQL, JSON … as if the pragmatic standards that let people get shit done eventually and quietly eat the world.
urthor 4y ago
Monolithic Mainframes are definitely the hip and trendy thing. You can run a ridiculously large business off a monolithic RDBMS.

doctor_eval 4y ago

What drives me nuts is that, as far as I can tell, all the players get to keep their share of that $250 million. There’s no talk of sanctions, nobody seems to be losing their job, the board is still pulling down their fees. So many large Australian institutions have been captured by consultants, snake oil peddelers and grifters, all with their hands in the jar. It’s embarrassing.

russelg 4y ago
That's exactly what the last federal government wanted, after all that's how they operated as well.
urthor 4y ago
Technology as a cost centre mentality. Time and time again, Australian non-tech companies cut technology jobs to cost cut. Anyone competent looking to build a long term career working in the corporate sector either moves to sales/marketing. Or, these days, moves to Atlassian/Canva. Over a rolling 20 year period, the process self selects for the least able. The IQ at the "Head of Engineering" level in Australian non-tech is minuscule. Selection bias. Most of them don't have CTOs, they have CIOs who report to an accountant in the C-suite.
- esja 4y ago
  Bingo. Adverse selection in action... they've created a "market for lemons". All the offshoring and outsourcing (and cultural disdain for technical people) means they can no longer tell the difference between charlatans and good tech leaders. But the good people know how to avoid them.

neffo 4y ago

It's hard to give non-Australian investors a sense of how bizarre this was. The ASX still provides CHESS holding statements (updates when you transact shares, when codes change or you are otherwise issued new shares)... by post. On paper. There is no other option. Before they fixed that they wanted to move CHESS to a blockchain. Wild.

levymetal 4y ago
ASX now offers electronic delivery of CHESS holding statements and notifications: https://www2.asx.com.au/investors/start-investing/electronic-delivery-of-chess-notifications https://www2.asx.com.au/investors/start-investing/electronic... However, holders can’t opt themselves in; inexplicably this needs to be supported at the broker level. I’ve spoken to one of the large brokers who advised me they have no plans to support this feature.
stevage 4y ago
Honestly I'm relieved to learn I'm not just an idiot who didn't know how not to get the letters.
urthor 4y ago
It's even crazier talking to the people involved. The project got the underlying Blockchain tech from VMware... AND had a requirement for a backup "traditional" RDBMS system. So, complete feature duplication of the core, mission critical application. Scope creep was crazy. Someone who doesn't understand the technology went "blockchain yeah sure mate let's go." Good project managers are so important.
- manquer 4y ago
  Good PMs would be replaced when they say a firm no in such top down projects
  - dopidopHN 4y ago
    Yeah that my thougt as well. That type of things fall from the sky on PM and they have to deal with the new direction. Maybe product director / VP or whatever

taspeotis 4y ago

But how will this centralised and trusted authority maintain a list of who owns what now? A database??

shitcoder 4y ago

This is Accenture's report into the project as commissioned by the ASX. I encourage people to read it as it goes into the technical and management details as to why it failed: https://www2.asx.com.au/content/dam/asx/markets/clearing-and-settlement-services/asx-chess-replacement-application-delivery-review-2022.pdf https://www2.asx.com.au/content/dam/asx/markets/clearing-and...

madeofpalk 4y ago
Did Accenture tell them to build on blockchain in the first place?
- blitzar 4y ago
  It reads like accenture might have reccomended the accenture blockchain a few years ago.
- mrjin 4y ago
  Do you really think they care?
- thedataangel 4y ago
  I don't _think_ Accenture were the original or primary contractor. I'm Australian and interviewed with Digital Asset for that project - as far as I'm aware, DA were the main company responsible, although from what I've heard from people working on it, a lot of the failure stems from mismanagement on the ASX side.
chris_wot 4y ago
lol “Greater consideration is required regarding the purpose of the consensus layer given ASX’s position as the central market operator for the CHESS use case.” And “ From a participant standpoint in the current design and architecture (not withstanding future use cases), there is little value to processing all the business logic on-ledger as ASX maintain data integrity as the market operator and participants receive a point-in-time view via API contracts.”
- 4y ago

gregjw 4y ago

Someone has made a lot money without having to deliver anything. Maybe they should modernise, rather than chasing buzzwords.

ohmychain 4y ago

> Accenture highlighted governance flaws on both the ASX and delivery partner sides, including “inefficiencies in the delivery lifecycle through to testing, with siloed execution and reporting resulting in misaligned views of status on delivery progress, risks and issues.” They should have used blockchain - put your daily status and reporting on a blockchain and have it visible to everyone in a decentralized manner. No more silos or misaligned views. This is one of the many problems that blockchain solves.

excerionsforte 4y ago

Blockchain is a valid solution for fast settlement clearing between market participants. JPM and Visa have already proven it their private blockchains. NASDAQ among others are experimenting with their own private blockchains. JPM use of their own Onyx blockchain makes the repo market far more efficient: https://www.bloomberg.com/news/articles/2020-12-10/jpmorgan-using-blockchain-to-move-billions-in-repo-market-trades https://www.bloomberg.com/news/articles/2020-12-10/jpmorgan-... Visa B2B Connect for global payments: https://developer.visa.com/capabilities/vba https://developer.visa.com/capabilities/vba I get it, blockchain makes for a flashy clickbait headline. There are bigger problems in the project than the selection of blockchain as a solution. - Project was 63% with an uncertain timeline to completion. That alone is a red flag for any enterprise project. - The teams involved weren't communicating with each other resulting in confusion. aka "misaligned views". - When it comes to scalability, there is no way to rate limit participants, so they could screw the system given it couldn't process more than 100k transactions (not sure what rate since it is unspecified). There are multitude of issues that justify canning the project. For those unaware ASX used VMWare's DLT blockchain: https://www.vmware.com/welcome/asx.html https://www.vmware.com/welcome/asx.html. There's nothing "scammy" about it. I'm unsure of why people in the comments here are still confused between cryptocurrency and blockchain especially since they have distinct names. If you're gonna point out incompetence, you have to realize your own faults as well. Anyone who claims to have enough information to make a determination about blockchain tech being the cripple here doesn't have the information required to make it given the problems pointed out. There's plenty of financial industry users making use of it already. Lots of tunnel vision below, but that's unsurprising given the hate against crypto (which people below often confuse with blockchain). I remember the same bias against K/V dbs (NoSQL). People would blame the tech choice rather than the circumstances. It's easier for certain types to blame tech for everything then hail it when the project succeeds even though it was only one part of the equation.

stephen_g 4y ago
But the problem still remains that there are almost always ways of doing anything that these ‘private blockchains’ do without a blockchain, that often work better… This was one of those times.

stephen_g 4y ago

This project was stupid from the start, I could never see it working. It never made any sense using ‘distributed ledger technology’, the ASX are the central authority and they want to be in that position… Making anything distributed isn’t actually useful to them or people who interact with them… They just got caught up in ‘blockchain hype’ and clearly there were some sales people in the right place, at the right time. Some people must have got away with serious cash from this boondoggle.

gramie 4y ago
I remember sitting in on a meeting with some high-priced consultants who solemnly declared that "the future of the web is blockchain". We were discussing an update to our main university website. The consultants had probably each earned my monthly salary to drive down from Toronto for that afternoon meeting. The other developer and I just looked at each other and wondered quietly if the consultants knew they were talking gibberish.

sethd 4y ago

> The report estimated the application software for the new system is still only 63 per cent complete, with an “uncertain” timeline to completion Does anyone actually believe the level of precision coming from this report? I bet good money that remaining “37%” would take way longer to complete than that supposed “63%” did. Oh, Accenture created the report, so it must be accurate, never mind. /s

sweezyjeezy 4y ago
That's typical in these kinds of reports. I wouldn't necessarily read that as Accenture believing they have 2 s.f. precision. If you put something like 60±20% in a report like this, to the audience it might look like you've done a bad job and have no idea what the real number is.
- delusional 4y ago
  It may be even more banal than that. If you start putting simple boxed uncertainties on numbers the reader might start adding their own uncertainties to your uncertainties when they communicate it further. I've found that when communicating with "leadership" it's best to not present anything difficult that requires them to make judgement, because they'll use that as an excuse to do what they wanted to do anyway (60±20% that's basically 80% and there's always some uncertainties with these things, so that's basically 90% so it's basically done, just ship it). Providing uncertainty is just asking someone else up the chain to pick the number. It's better to just pick it yourself to shape the conclusion you're going to make. The people making these decisions aren't scientists. They don't have any allegiance to your methodology or analysis. They just care about the conclusion.
mrjin 4y ago
I think the number might be plausible, but you know, even if you get 80% done, it's probably only 20% of the effort. The remaining 20% will require 80% of the effort, which is 4 times of the committed.

OhNoNotAgain_99 4y ago

langsoul-com 4y ago

I wonder why Australia even bothered. They have instant bank transfers, so it's not like the tech to do shit instantly, on scale doesn't exist.