A Standard Framework for Finance
What is Katallassos?
Katallassos is a new standard framework for originating and issuing financial instruments and financial services with a focus on derivatives. The Katallassos project builds on top of the ACTUS standard to create a standardised financial framework for building decentralised derivatives products and services for established blockchain initiatives, new projects, and traditional financial institutions.
What are Derivatives?
Derivatives are the largest class of financial products in the world with an estimated global market value between $544 trillion to $1.2 quadrillion. Derivatives are financial contracts between two or more parties that derive their value based upon an underlying financial asset, set of assets, or entity. These underlying instruments can be anything from securities to commodities to stocks to interest rates and the derivative contract can represent anything from futures contracts, stock options, forward contracts, swaps, and more.
Why do we need Decentralised Derivative Products and Financial Services?
Currently, in the centralized banking world, derivative financial products are handled by custodians and executed in a centralised setting, requiring inherent trust of the party or institution facilitating the contract. The option of decentralised and non-custodial execution of derivatives within the context of a standard on a blockchain network has clear and concise advantages for all parties involved in the transaction, including:
- Access to any financial service from a single account.
- Significantly less waiting time for bank transfers between accounts and brokerages/exchanges.
- The automated execution of financial contracts.
- A continuous real-time synchronized single golden source of truth for all secondary market analytics and reporting. Meaning the next housing bubble could be prevented due to better macro economic oversight.
What is The ACTUS Standard?
The Katallassos project builds on top of the ACTUS standard, a modeling paradigm in which standardized Contract Types (CTs) are the granular building blocks of the financial world. Katallassos aims to follow the implementation standard of the Actus Financial Protocol (AFP).
What functions will Katallassos have?
The Katallassos project will be a community-based initiative that will integrate with many existing blockchain applications and projects as well as traditional banking infrastructure to truly leverage the perfect functionality of blockchain for derivatives.
At its heart Katallassos is composed of the following four functions:
• Fiat tokens issued on-chain by reputable third-parties.
• Access to crypto tokens of other blockchains.
• Decentralized oracles for any external data feeds.
• Financial contract templates based on ACTUS.
These are the basic building blocks necessary for a derivatives platform. Fiat and crypto tokens give users a diverse range of assets to choose from, oracles are indispensable to create derivatives that depend on external information, and a consistent set of contract templates lower integration barriers between all the different services running on top of the platform.
What is Katallassos’ goal?
CEO and Founder of Trinkler Software AG Reto Trinkler states of Katallassos goal:
“Our goal with Katallassos is to create a cutting-edge blockchain for finance.”
The name ‘Katallassos’ is derived from the word ‘catallactics’, a term first coined by Austrian Economist Ludwig Von Mises. It is an economic theory that quantifies the scope of economics using human action as a metric for measuring an economy’s state. The greater the amount of action or participation, the healthier the state of the economy. Trinkler Software chose to build tools for a catallactic society to help contribute to a healthier economy.
About Trinkler Software
Trinkler Software AG is a blockchain software development company founded by Reto Trinkler and based in Crypto Valley, Switzerland. It was founded in April 2018 with a focus on building FinTech tools that can enable people to become their own economies and to actively participate in exchanges with one another. Learn more at https://trinkler.software.
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Acknowledgements: This post was a collaborative effort and was written by the Trinkler Software team. We thank its contributors and those who provided valuable feedback: Addison Huegel, Arie Levy-Cohen, Reto Trinkler, Bruno França, Sophie Radermacher, Seraya Ken Takahashi, Hervé Fulchiron, Mark Greenslade, ACTUS, Ariadne, and the team at The Actus Financial Protocol.