Crypto has been running wild for quite a bit, its market dynamics have been a bless for some and despair for others. While this might be the interesting part of it for many enthusiasts, as long as the crypto market behaves like a capricious teenager, it will not be trustworthy for long term inversions on it. A tool for stability and confidence is required, and the Firmo team have developed right what every wise investor needs, a secure and powerful structure for trading market’s assets.

On Layman’s terms, derivatives are diverse ways to stablish conditions for transactions between individuals or financial organizations, such conditions are based on time intervals, prices variation of assets and cash flows. Thereafter, the presence of derivatives enables a diverse environment for risk management which gives investors the opportunity to develop new business with ease and new economics structures start to rise.

You might ask, are derivatives such a big deal? The answer is YES THEY ARE! According to the New York Times derivatives market size was $710 trillion on 2014. It couldn’t be expressed by words what could meant for cryptocurrencies ecosystem to drive this ginormous flux of money inwards. Most economic growth on the world is not based in cash flows (which are the actual indicators for all cryptocurrencies), it is based in loans and credits that fuel all the development on the planet, and it is mandatory to assemble a secure platform for these financials activities to enter the game.

Right now, a big deal of types of smart contracts are available, most of them are supported on the Ethereum Blockchain, while it is true that actual programming tools offers a wide scope of possibilities for people to negotiate a future transaction bounded to some conditions on a smart contract, it is also true that the immense majority of folks don’t know how to properly secure its code, and tends to leave vulnerable sides on their contracts that are exploited by malicious actors that plunder on other people funds.

This situation chases away many investors that seek for a more secure environment to trade their financial assets. Furthermore, researchers from the University of Singapore stablished that at the time of their investigation (June 2016) 8.833 out of 19.366 contracts were found vulnerable link to the researcher's paper, this represents 44% of the total amount of smart contracts analysed. Further security breaches on the DAO and on Parity Wallets confirmed these flaws.

• Transaction-ordering dependence bug: if a contract is coded in such a way that when two transactions that call a state on the contract are in the same block, inconsistent behaviour arises, and the final state depends on the order that the miner placed the transactions in the block, thus the intended final result the users call the contract for will not be achieved.

• Timestamp-dependence bug: this occurs when the key features of a contract are linked with the timestamp that miners set to the block they are mining, this bug could lead to manipulate the circumstances upon which the contract is programmed to release the funds.

• Mishandlings expectations bug: it arises when a contract "A" call for another contract "B" and sends an instruction to the latter, if the conditions are such that the called contract "B" can’t execute the request, the caller contract "A" has to specifically have an instruction to check the output of the exception on the called contract, otherwise it will not check what the result of the call was. Of course not many have such explicit expression and subsequent misbehaviour occurs.

The problems listed above for Solidity based smart contracts are solved through the creation of a new coding language called Firmolang, it offers security, proof-verified algorithms, templates and customization based on each specific needs, simplicity, and interoperability throughout the major Blockchains

People who want to create a smart contracts on Firmolang will have access to a Domain Specific language, this implies that more intuitive commands and instructions will be available to express the conditions on which a deal will be made. Furthermore, because the language is formally verified, users will have the chance to check their code before it is compiled on the Blockchain, in consequence bugs and security breaches due to lack of proficiency while coding will be affairs from the past.

Firmolang will be launched on the Ethereum Blockchain; nevertheless, due to the feature of being compiled directly on the bitcode of any Blockchain, it will have no problem when working on any other platform.

Financial instruments can be interpreted as a series of events determined by fairly straightforward rules (market price of some elements, a counter party executing its option) those events are transfers of value between counterparts that take place in a specific time interval. All this makes Blockchain transactions a use case for financial instruments, and in order to build the road for their implementation, a secure language like Firmolang is necessary.

Everyone will profit from the implementation of this great project, individuals will have the opportunity to transfer their positions to third parties via secondary markets, Cryptocurrencies Exchanges now will be able to offer secure derivatives products and Financial Institutions can achieve huge reductions in cost associated with the clearing and the settlement of derivatives.

Even more, the approach of the Firmo Protocol for collaterals will be case specific, different customers have different needs. Because of this perspective financial dynamics might include Full Collateral Coverage, in the fashion it happens in standarized contracts, Variable Collateral Coverage which will be equivalent to the margin call in the traditional brokerage roles, and Zero Collateral Coverage that will allow Firmo services to run on permissioned structures (a.k.a. privated blockchains) or when there is sufficient trust between the counterparties.

It’s a must win chance!

For a more detailed explanation, consult Firmo technical paper here

Watch Firmo's CEO explaining the project at the Tel Aviv Fin Tech