Commodities on the Blockchain(Comdex), a Safe Haven for the Small Investors?
Before we talk about whether commodities on the blockchain are a safe haven for small investors, let’s explain what commodities are.
Commodities;
A commodity is a tangible good that may be bought, sold, or traded for items of comparable worth in economics. Commodities have value and can be traded on open markets, just like other asset classes like equities. Commodities’ prices can change in accordance with supply and demand, just like other assets. Commodities affect everybody, be it a car owner who needs to fuel up his vehicle or a chef who needs to buy meat to serve in his restaurant. Behind every product we use and behind every service used, there is a big hand played by the commodities industry.
Today, commodities are divided into four main categories. They are:
- Energy Commodities — Crude Oil, Heating Oil, Gasoline Coal, Electricity etc.
- Metal Commodities — Aluminum, Copper, Gold, Silver, Platinum, Steel etc.
- Agriculture Commodities — Barley, Cocoa, Corn, Cotton, Wheat, Sugar etc.
- Livestock and Meat Commodities — Feeder Cattle, Live cattle, Pork Belly, Lean hogs etc.
Now that you are aware of what commodities are, let’s explore blockchain technology to help you understand the idea.
Blockchain Technology;
What is blockchain? A blockchain is a special form of database. You may also have heard the term distributed ledger technology (or DLT) — in many cases, they’re referring to the same thing. A blockchain has certain unique properties. There are rules about how data can be added, and once the data has been stored, it’s virtually impossible to modify or delete it.
Numerous use cases are possible for blockchain technology. Let’s review some of them.
Blockchain and healthcare; Storing medical records in a reliable manner are vital for any healthcare system, and the reliance on centralized servers leaves sensitive information in a vulnerable position. The transparency and security of blockchain technology make it an ideal platform on which to store medical records.
Blockchain remittance; With typical banking, sending money abroad is a pain. The fees and settlement times make utilizing traditional banks for urgent transactions both expensive and unpredictable, mostly because of a complicated network of intermediaries.
Blockchain for governance; In the form of computer code, distributed networks are capable of defining and enforcing their own rules. It’s unsurprising then that blockchain may have a shot at disintermediating various governance processes on the local, national, or even worldwide level.
Blockchain for charity; The restrictions on how they can take money frequently pose a barrier to charitable groups. Even more annoyingly, it can be challenging to accurately trace where given money goes in the end, which definitely deters many people from supporting these charities. But with the blockchain’s intrinsic qualities of greater transparency; worldwide involvement increases, which helps maximize the impact of charities.
Crowdfunding with blockchain; Blockchain technology, and more specifically smart contracts, may make it possible to automate and increase the security of crowdfunding transactions by defining the conditions of the contracts in computer code.
Blockchain and the gaming industry; One of the major entertainment sectors in the world today is gaming, and blockchain technology has a lot to offer this sector. Gamers frequently find themselves at the mercy of game designers. The majority of online games require players to rely on the server space of the creators and abide by their constantly evolving set of regulations. Blockchain technology may be used to decentralize online game ownership, administration, and maintenance in this situation.
Another application for blockchain technology is in the supply chains of the commodities that this blog is focused on;
A supply chain is a network of individuals and organizations that work together to produce and distribute a certain good or service, from the first suppliers to the final consumers. The suppliers of food or raw materials, the manufacturers (who handle the processing stage), the logistics providers, and the final merchants are frequently included in a basic supply chain system.
The current supply chain management system is hampered by a lack of openness and efficiency, and most networks struggle to incorporate all participants. Ideally, the items and materials, as well as money and data need to travel fluidly throughout the various stages of the chain.
However, the existing model makes it challenging to maintain a reliable and effective supply chain system, which has a detrimental impact on both the companies’ profitability and the ultimate retail price.
The usage of blockchain technology (COMDEX) can help solve some of the most pressing problems in the supply chain since it offers new methods for storing, transmitting, and sharing data.
Comdex on the blockchain;
By combining the immutability of blockchain and interoperability of IBC, Comdex’s synthetics protocol enables investors(big or small; unlike Tradfi) to take exposure to a broad range of financial assets seamlessly.
The COMDEX Trading Platform
The “Comdex” (Commodities Dex) Trading Platform is a Tendermint-based decentralized commodity trading platform. For the first time in history, market players from all around the world will be able to take advantage of easily accessible commodity synthetics through the “Comdex Trading Platform.”
On the platform, “cAsset” tokens are issued to represent commodity synthetics. Each commodity offered on the platform has its own unique “cAsset” token. However, because these tokens reflect a single continuous futures contract, there is only one tradeable cAsset token per unique commodity.
To provide speculators with a smooth liquidity solution, Comdex’s synthetic trading platform employs an automated market maker module. The automated market maker essentially provides liquidity in the form of both ‘cAssets’ and ‘Stablecoins,’ and is funded by liquidity providers who hope to profit from both trading fees and liquidity mining incentives in the form of the native CMDX token.
The oracle price feed for Comdex’s commodity-related synthetics products is critical since it establishes the contract’s ‘fair value’ mark price and applies liquidation measures on participating ‘Short Traders.’
Combining all the above-mentioned factors, Comdex aims to deliver a solution to enable seamless access for common investors across the globe to a restricted asset class of inherent value.
About Comdex
Comdex is a decentralized synthetics exchange built to democratize finance by reducing the complexities and regulatory hurdles to access investments in financial assets with intrinsic value.
Join the conversation: https://t.me/ComdexChat
Follow on Twitter: https://twitter.com/ComdexOfficial
