Decentralised Global Capital Markets Platform — A Global Marketplace for issuers and investors run by smart contracts and not banks.
What is the next big disruption (by blockchain)?
Replacing Investment Banking processes with a bunch of Smart Contracts.
Why disintermediate Investment Banks?
“Companies and investors lose out when businesses float on the stock market because banks and other advisers are charging extra ordinary fees, the Organisation for Economic Co-operation and Development has warned. High levels of fees (7–10%) and parallel pricing akin to tacit collusion appear to have increased. This increases the cost of equity and works against long-term productive investment. Reinforcing competitive conditions in these markets could contribute to better outcomes for globalisation” — The Telegraph 30 May 2017
What can disintermediate investment banks?
Blockchain of course!
We have specifically conceptualised DGCAMP for the purpose.
DGCAMP is potentially one of the biggest real world applications for Blockchain. DGCAMP envisages a smart contract architecture replacing the manual processes involved in investment banking, in the issuance of corporate equity and debt securities — processes characterised by opacity and high fees. (Read our preliminary paper)
DGCAMP’s vision is made possible by Ethereum Smart Contracts, as envisioned by Vitalik Buterin, inventor and Chief Scientist, Ethereum.
“A smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.” — Vitalik Buterin — May 2014
Intermediaries in complex markets thrive on “the theory of opacity” and deliberately propagate the theory to further their own interests. The theory simply states that opacity of a process attracts intermediaries, and the more the opacity of a system or process, the more the intermediary can take away from the buyer or seller surplus.
DGCAMP aims to do away with opacity in capital markets.
Decentralised Global Capital Markets Platform ( DGCAMP ) is a new-age architecture where investors of capital and seekers of capital can interact freely, trustlessly and with minimum friction. The platform can operate with and without intermediaries.
DGCAMP — A definition:
DGCAMP is a blockchain and smart-contract driven platform where issuers (public and private firms, governments, non-profit foundations) can access a broad class of primary market investors (both institutional and retail), complete a variety of automated transactions and processes (such as book building, auctions, syndications, dividend distributions) and can issue a broad array of digital assets to investors. Investors of every type, jurisdiction and financial status can use the platform to learn about investment opportunities across the globe, their regulatory aspects, risks and expected returns, to access due diligence reports, and to invest directly without having to go through intermediaries. A secondary market layer with buyers, sellers, arbitrageurs can easily complement this system. The system can first be envisaged as a single-country system and then extended to a multi-country global marketplace.
Capital allocation will be made in a cryptographically secure, quick, efficient, trustless way.
Decentralised Capital Markets Platform for Digitally Represented Assets (DGCAMP) — a visual representation
Benefits of DGCAMP:
- Disintermediation of Investment Banking by a Digital Asset Issuance Platform:
A Smart Contract Architecture can replace everything an investment bank does in securities issuance — book building, IPO pricing, algorithm-based allotment of digitised assets to various subscribers, accepting payments and issuing digital securities, custody of digitised assets
- Cost saving, for example: Taking Away IPO fees of 7–10%
- De-risking of issuance process : Eliminating counter-party and settlement risks
- Post-issue management of investor base and performance reporting
- Digital coupon and dividend distribution
- Global Open Access Trust-less Platform for direct interaction between Investors and Capital-seekers
- Global efficient capital flows between countries
- Potential App Market Place for Asset Management Industry and intermediaries to build on our Core Platform
- Reputation scoring of investors and issuers enabled over time
- Potential platform for independent service providers to sell Research, Due Diligence, Legal and Regulatory Products
- Decentralisation of Access to Capital!
- Decentralisation of Innovation!
DGCAMP serves as a substitute to the current manually-intensive, opaque, time-bound and costly processes (laden with conflicts of interest) involved in the issuance of real world securities for corporates, governments, and non-profits.
What can DGCAMP do ?:
- Play the role of an exchange
- Play the roles of an investment bank in an IPO or Bond issuance.
- Everything a Kickstarter can do
- Everything an equity crowd-funding platform can do
- Everything a peer to peer lending place can do.
We are working on creating a blockchain core architecture where all of the above functionalities can be added as different modules.
“In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared.”
Background of DGCAMP Founder
DGCAMP is conceived, architected and led by Arifa Khan.
Read Arifa Khan’s preliminary paper on DGCAMP. The paper has been peer-reviewed by Dr Emin Gun Sirer, Associate Professor, Computer Science , Cornell University, and Co-Director IC3, The Initiative for Cryptocurrencies and Contracts, and also by several Asset Managers and Capital Markets professionals.
Arifa Khan is Founder and CEO of Himalaya Labs, a blockchain venture founded to bring the vision of DGCAMP to reality.
Arifa is a London based investment banker with stints in Financial Sponsors Group at Credit Suisse and UBS. She has a B.Tech from IIT Madras, and an MBA with Finance specialisation from Wharton School of Business, University of Pennsylvania. She has been focusing on blockchain research since 2015. She is the architect of Europe-India Conclave Series and has featured Vitalik Buterin at Ethereum India Summit May 2017. She is currently also building the Ethereum community in India and Middle East as India Partner of the Ethereum Foundation. Arifa is inspired by the vision of crypto founders Satoshi and Vitalik. Vitalik said in a 2015 blog before he realised the full impact of what he had created “there is no [Blockchain] killer app, and the list of applications has a very very long tail — basically, just about every kind of software imaginable”. Arifa wants to contribute to realising the vision of the crypto founders, and to build an architecture for big real world use-cases and explore intersection of futuristic technologies like AI, blockchain etc.
DGCAMP is supported by talent from across the globe constituting cryptographers, mathematicians, blockchain and capital markets pioneers. Full team will be announced shortly.
Read our preliminary paper here. White Paper is coming soon!
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