Wand — decentralized financial markets for crypto-secured assets (part 1)

Augur and Gnosis are decentralized prediction market platforms. They allow users to create any prediction market and trade in their shares. Apart from allowing people to bet on the outcome of any event, they also would generate highly accurate data on the probabilities of occurrence of future events, with the caveat that only if enough people participate in the market.

Wand is a decentralized securities and derivative market platform. It allows users to create financial markets on crypto-secured assets; these assets could be cryptocurrencies or real world assets stored on a blockchain. It allows users to create derivatives and securities from any blockchain or a combination of blockchains. Like Augur can generate accurate data on future events, Wand will generate accurate data on the value of crypto-secured assets.

There are two different types of crypto-assets in the market, a cryptocurrency as a stand alone currency and a real world asset recorded on the blockchain which is the less popular of the two. Within cryptocurrencies, you can have currencies built on top of existing blockchains such as ethereum (for example Gnosis) or you can have currencies on stand alone blockchains such as Litecoin. Each coin differs in the following characteristics:

• Number of coins pre-mined,
• How new coins are generated (mined separately or mining pegged to ethereum),
• Characteristics of the blockchain (average block height, proof of work/stake/authority).

Different public blockchain applications are valued by the value of their coins. Applications like the Bancor protocol aim to be the Federal Reserve for coins. Wand would create the Wall street for coins. Coins are like shares, they are fungible, tradable, and unlike shares are also divisible. They do not represent equity like shares do, but they represent the value of the application and hence the value of the company behind the application. Just like Wall Street creates financial products on fiat currencies, the Wand platform can create financial products on crypto-secured assets; however, unlike Wall Street, the power to create and trade in these assets is not restricted to a few large players, but is open to all users. Users can see what products are being traded and who they were created by. Wand would create a completely open market for crypto-secured assets, removing middlemen through decentralization.

Our vision is to create decentralized infrastructure for Derivatives and securities on crypto-secured assets through a combination of smart contracts, IPFS, and in the future (hopefully) lightning networks to create immediate trades.

The next few parts of this article shows the different applications of Wand, structure of the smart contracts, and the whitepaper; stay tuned!