Firmo - Finally! Secure, Simple to Create, and Adaptable Financial Instruments for the Blockchain! (or How Firmo will make Blockchain Finance and Trading => Legacy Market Offerings!)
(IJCH) Firmo - Finally! Secure, Simple to Create, and Adaptable Financial Instruments for the Blockchain! (or How Firmo will make Blockchain Finance and Trading => Legacy Market Offerings!)
IJCH - Inside JaiChai's Head (meaning: My warped, personal opinions and musings)
From the Author:
Salutations.
I am JaiChai.
And if I haven't had the pleasure of meeting you before, I'm delighted to make your acquaintance now.
I invite you to interact with everyone, learn, and have as much fun as possible!
For my returning online friends, "It's always great to see you again!"
Introduction
The advent of advanced financial instruments for the blockchain is a giant leap in the evolution of blockchain finance and decentralized trading.
It will have ripple effects that impact ALL financial markets.
And its significance can not be understated.
Why do I say this?
Because sophisticated financial instruments like futures, options, forwards and swaps for the blockchain heralds a new era of financial tool versatility, functionality , and interoperability.
It will surely facilitate exponential mainstream adoption of all things blockchain; particularly attracting those who wanted to dive in long ago but were afraid of the volatility and breaches in security (e.g., MtGox, the DAO hack and so on).
Additionally, legacy markets will effectively be put on notice:
To All Legacy Markets,
"Eliminate the barriers for entry and the expensive layer of middleman bloat or be made obsolete by disintermediating, decentralized blockchain alternatives." - Jaichai
"You never change things by fighting against the existing reality. To change something, build a new model that makes the old model obsolete.” - Buckminster Fuller
A Very Brief Discussion of Derivatives
Years of studying economic theory, market dynamics and the proper use of advanced financial instruments were required to earn my MBA.
So believe me when I tell you that the below discussion of derivatives is VERY BRIEF; barely scratching the intricacies of each financial instrument.
But I'm not here to give you a two-minute MBA, my goal is to provide the raison d 'etre of derivatives, plus a simplified explanation of their mechanics (the "How" of them) and common uses.
Implementing investment strategies based on derivatives should only be used by seasoned financial players within that domain. It's very unwise to risk a personal financial catastrophe by haphazardly employing these advanced financial instruments.
I can't stress this enough:
"You must thoroughly research, comprehend, and accept the inherent risks before investing any significant amount of capital in derivatives (legacy or otherwise)." - Jaichai
Ok.
With that said, let's charge on...
What the Hell are "Derivatives"?
Many financial and trading pundits state that the financial derivative is the most important financial market innovation in the last decade.
It drastically changed the whole operational methods for dealing with stocks, commodities, currencies - virtually anything tradeable.
In essence, derivatives deal with the future; enabling the investor to lock-in a certain price or speculate on the direction of a future price with highly-leveraged principal.
In other words, huge transactions with small amounts are possible with derivatives.
Day traders as well as swing traders love the guaranteed liquidity (meaning: It's much easier to avoid "holding the bag" with derivatives.).
Fluid, real-time price discovery makes the risk management of many trading factors (e.g., interest rate fluctuations, currency exchange rate shifts, geographic variations of global commodity supply/demand, etc.) becomes more manageable; therefore, making the decision to hedge or speculate less nerve-racking.
Derivatives improve Market Efficiency for the Underlying Asset; that is, investors can get exposure to an index without the expense of purchasing the underlying asset out right.
Finally, derivatives reduce Market Transaction Costs because they are essentially a form of inexpensive, versatile, easily tradeable insurance.
Firmo - Finally! Secure, Simple to Create, and Adaptable Financial Instruments for the Blockchain!
Executive Summary:
Firmo enables all participants in the smart contract space to easily create advanced financial instruments that previously were too impractical, unsecure, and expensive to employ.
Smart contracts with FirmoLang technology will possess unmatched security and are adaptable to any level of smart contract complexity.
FirmoLang is compatible with all existing ERC20 compliant smart contracts.
Firmo smart contracts are blockchain agnostic; capable of running on any blockchain via the Ethereum Virtual Machine (e.g., Hedera Hashgraph, GoChain, NEO, Cardano, EOS, Crowd Machine, etc.).
Firmo - Next Generation Smart Contracts
Firmo’s smart contract language enables the secure execution of a new generation of financial contracts on the blockchain.
Firmo is building the future of financial infrastructure. 1/7 of the world’s economy is derivatives, but these financial contracts are not securely available in the crypto economy yet.
FirmoLang enables businesses, like exchanges, to securely and intuitively offer smart derivatives on any major blockchain. Firmo already works with Ethereum and is in talks with other major blockchains like Neo, Cardano and Qtum.
This is just the first step in overhauling today’s financial infrastructure.
A scary fact is that 45% of all existing smart contracts contain known vulnerabilities.
Firmo aims to corect that; thereby raising the smart contract security to the next level.
Consequently, the added security will instill confidence in the masses of investors who previously were hesitant to enter the space.
Firmo has something for everybody. All stakeholders in the smart contract space can enjoy the benefits of Firmo.
For example,
A. Individual Users: Can enter into smart derivative contracts and trade their positions to third parties on secondary markets.
B. Cryptocurrency Exchanges: Can offer their customers secure derivative products.
Cryptocurrency exchanges may also act as the clearing institution or counterparty in a given smart derivative contract.
C. Financial Institutions: Traditional financial institutions can utilize the Firmo Protocol to achieve significant reductions in costs associated with the clearing and settlement of derivatives.
By eliminating intermediaries and automating clearing processes, financial institutions can further expand their offering with exotic variations of commonly standardized instruments.
A Smart Contract For Every Need
In addition to providing templates to easily create individualized smart contracts, Firmo also offers options for more exotic customization.
Stated differently, from simple to sophisticated, Firmo is satisfying the wide range of use cases and capable of handling all levels of smart contract complexity.
For example, Firmo can easily facilitate/process:
European Vanilla Options (these grant buyers the option - without the obligation - to buy an asset at a set price at a predetermined date)
Vanilla Interest rate swaps (interest rate swaps allow borrowers and lenders to trade the respectable interest rates paid on a nominal amount)
Collateral Accounts (basically a digital escrow)
Margins
Full/Variable/Zero Coverage Derivatives
Data Feeds (single or multi-feed sources) via Proof of Authority Oracles
and much more.
FirmoLang
FirmoLang is a formally verified domain specific computer language. It is turing complete, highly flexible, scalable, and blockchain agnostic.
FirmoLang possesses unparalleled security and is much easier to use than other languages (e.g., Ethereum's Solidity or Cardano's Pluto).
Anyone who can recognize XML will be at home with FirmoLang.
Current smart contract developers will appreciate its simplistic architecture because it virtually eliminates instances of "spaghetti mess code" (programs with vast amounts of multiply nested lines of code).
Firmo Videos
Get Firmo's White Paper here:
https://www.firmo.network/resources/FIRMO_TechnicalPaper.pdf
More details about Firmo's FirmoLang, the Professional Firmo Team and Advisors, Firmo's current status, the Firmo Blog and more can be found on their website at:
By JaiChai
This is an entry for @ originalworks' 200-steem-40-bonuses-sponsored-writing-contest-firmo
To submit your own entry, visit:
https://steemit.com/crypto/@originalworks/200-steem-40-bonuses-sponsored-writing-contest-firmo
Thanks for stopping by.
About the Author
Believing that school was too boring, he dropped out of High School early; only to earn an AA, BS and MBA in less than 4 years much later in life – while working full-time as a Navy/Marine Corps Medic.
In spite of a fear of heights and deep water, he performed high altitude, free-fall parachute jumps and hazardous diving ops in deep, open ocean water.
After 24 years of active duty, he retired in Asia.
Since then, he's been a full-time, single papa and actively pursuing his varied passions (Writing, Disruptive Technology, Computer Science and Cryptocurrency - plus more hobbies too boring or bizarre for most folk).
He lives on an island paradise with his teenage daughter, longtime girlfriend and three dogs.
wow this post is intensely huge and i'm so bad with numbers. can you just do it for me???!! LOL
As a follower of @followforupvotes this post has been randomly selected and upvoted! Enjoy your upvote and have a great day!
Thanks for the useful update. @jaichai
Great articulo, i like