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It is a nice analogy of what is happening in the world of Decentralised Finance (DeFi), where there are many proclamations that they are a new paradigm in investment and through clever structures are somehow exempt from regulations.

The arguments…

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While this makes sense from an academic or philosophical approach, it is important that this transfers from papers, and ideas into practicality.

Decentralisation is at the core of Tgrade and this has shaped how Tgrade has been structured, how the underlying consensus mechanism has been designed, and the…

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Decentralization should be an easy concept to grasp, there is no central authority and there are governance mechanisms in place to ensure the smooth running of the decentralized organization or system.

If we look at blockchains we see that in practice it is harder to achieve Let’s take Bitcoin where anyone can set up a node and mine, in theory, the Bitcoin network should be nicely decentralized, yet we see a concentration of miners in China which represent more than 75%[1] of the mining power. The concentration of mining in China is due to the combination of being close to…

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When we look at Decentralised Finance (DeFi) we see a fast-moving, innovative, convention-breaking spirit and at the heart of it a mindset to fully embrace a decentralized model. The philosophy behind the decentralized model is a global network that through some magic transcends borders and importantly the rules and regulations that apply to finance. Where it becomes powerful is in aggregating global liquidity rather than having pockets based on sovereign countries (and their local regulations), the smart contracts enforce the workflows matching the supply and demand of the traded pairs.

While the innovation is fully applauded there is a significant…

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Proof of Stake (PoS) and the variation Delegated Proof of Stake (dPoS) are well understood consensus models for securing a blockchain. In designing Proof of Engagement(PoE) we set out to address some of the issues we found in PoS and dPos, such as concentration of power in a handful of validators, and the lack of incentives for the wider community. The PoE model incentivises collaboration by the introduction of Engagement Rewards which are available for all of the community to earn.

When we were developing PoE, we were left with a big question of what do we do with Delegators…

Tendermint, a builder of critical state-of-the-art infrastructure for open distributed applications, has announced their strategic investment in Tgrade, a blockchain framework focused on regulated decentralised finance (DeFi). Developed by Confio, the team behind CosmWasm, a secure interoperable smart contract engine, Tgrade is a solid foundation for developers to deploy DeFi products, such as pegs and automated market makers, using the robust CosmWasm engine.

By creating highly secure, developer-friendly tooling for the next generation of multi-blockchain applications, including robust self-governance, Confio’s long-term mission with the development of Tgrade is to develop new financial instruments with smart contracts, bringing liquidity from traditional…

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The recent events around the trading of GameStop, a company which has a retail network selling games, and as a business was suffering from the impact of the Covid-19 pandemic, and strong competition from e-commerce giants. The share price was languishing at around $2 which brought it to the attention of Hedge Funds, who research companies that are showing signs of distress and follow a strategy of short-selling. Selling short involves borrowing stock and paying the lender interest, and selling the stocks with the strategy of buying them back at a cheaper price and giving the stock back to the…

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In an earlier blog post A Public, Permissioned Blockchain the concept of self-sovereign, permissioned, blockchain was explored as a potential solution to create a framework for regulatory compliance in finance.

The framework behind it is a Decentralised Social Organisation, where there is human interpretation of rules and information coupled with strong governance. This mechanism is fully self-sovereign, allowing groups to form based on residency, or place of registration.

Self-sovereign identity, a key part in establishing in which jurisdiction a person or business belongs, is managed by the self-sovereign groups through a governance process which has a system of incentives and…

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The issuance and secondary trading of the programmable instruments can be done through a number of methods in a decentralized way. We explore the various approaches and look at a more general exchange of value in a peer-to-peer (P2P) setting.

Why P2P?

The traditional capital markets world has a multiple layer approach with a series of intermediaries and all of them play a role in securing the infrastructure.

An exchange restricts the market…

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In previous articles, we explored multiple-dimension programmable instruments and how we could adapt traditional debt and equity instruments by introducing verifiable outcomes to measure against benchmarks that issued environmental, social, governance and stakeholder credits. This introduces a broader measure of value to the traditional instruments.

It is a given in investment management that investing in a single instrument can be risky, which is why it is better to have investments in a “basket” of instruments. This is where portfolios come in and the trick is knowing how to best to construct them.

Portfolio Optimisation, a 30 second overview

Portfolio optimisation is a whole subject matter covered…

Martin Worner

Co-founder and Head of Product at Confio

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