Since the release of the Bitcoin whitepaper in 2008, blockchain has promised to create a new global payments network that would challenge the incumbents, from banks to governments. That dream has often collided with government regulations, which still determine how money—virtual or otherwise—can move around the world.Predicate, a new startup founded by two alumni of the blockchain Celo, wants to help crypto firms navigate those regulations. It is offerings a service it says can let crypto apps seamlessly implement the logic that decides whether any given transaction can be approved—a decision based on a complicated piece of infrastructure that undergirds products from Netflix to Venmo. With $7 million in backing from top venture capital firms including Tribe and 1kx, Predicate is launching its product this week and plans to operate under the decentralized ethos of blockchain. “How do you bridge blockchain technology to the rest of the economy?” said Nikhil Raghuveera, a Predicate cofounder, in an interview with Fortune. “We believe there’s that opportunity to say we can actually simplify that.”Transaction prerequisitesIf you try to send someone $50,000 over Venmo, the request probably won’t go through—a $10 charge won’t have a problem though. The same goes for opening Netflix in a country where it doesn’t operate. In both situations, the apps in the background are completing something called a prerequisite, which determines if an action should happen or not.Blockchain, of course, operates under a different schema than centralized companies, where a single entity—and people—sit in the middle of the activity. With blockchain apps, such as borrow/lend protocols or prediction markets, actions are meant to be governed by code, rather than humans. Nonetheless, writing the code that serves as the foundation can be burdensome and expensive. “All of them are going to probably have different types of pre-transaction rules and requirements,” Raghuveera said. “We provide the mechanism and the infrastructure to seamlessly do that.”Raghuveera has a policy background, including working as a senior fellow for the think tank Atlantic Council, and Predicate counts Michael Mosier, the former acting director of the Treasury Department’s Financial Crimes Enforcement Network, as an advisor. One of blockchain’s thorniest problems has been maintaining blockchain’s decentralized ideals with the realities of anti-money laundering laws—whose importance the Treasury Department has repeated over and over.Raghuveera and his cofounder, former JP Morgan software engineer Jesse Sawa, said that Predicate’s value add will be creating a plug-and-play solution for blockchain apps that allows them to implement transaction prerequisites, such as maintaining and building out blacklists of addresses, will still giving the control of the policies to whatever body is governing the body, whether it’s an individual, company, or decentralized autonomous organization. Predicate will be available on any Ethereum or EVM-compatible chain, with a plan to expand to other blockchains. It is also working with the restaking network EigenLayer, which recently had its token launch in early October, to develop a community of operators that deploy Predicate’s technology using a proof-of-stake system. Raghuveera declined to speak about Predicate’s own plans to launch a token, although it is likely on the roadmap, given the way it is built and and the need for an incentive mechanism to approve and deny transactions given a Predicate user’s set prerequisites.For now, Predicate will offer a white glove service integration with new clients that it onboards, charging a transaction fee, though Raghuveera declined to provide the names of its first customers. The company currently has six employees with plans to use the funding to expand to 10. Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune's Crypto Crash Course.
