Comdex: The First DeFi Platform To Democratize Commodities
Over the last three decades, the widespread adoption of technology has continued to disrupt the traditional model and digitize how we relate to and interact with human and natural resources. Furthermore, the use of technology to tackle basic and technical difficulties has pervaded practically every industry, and people rising to make an impact through technology are now the norm. Without a doubt, the goal of technological entry is to provide solutions to problems and ensure everyone (noble or common) has equal access to a wide range of options.
Today, the transaction of shares and FX (Forex) is digitized, making room for average investors to have access to the assets and derivatives. In a similar spirit, the Bitcoin network was established to create a digital store of value for the currency, as opposed to the ever-inflating fiat currency.
Like most industries, the financial and cross-border trade setback as a result of the pandemic has also accelerated the development and need for technological solutions. As a result, we cannot deny that we are on the verge of a revolution aimed at extending worldwide access to dynamic commodity-related investment vehicles for the average investor.
COMDEX comes in to revolutionize commodity trade. Its primary goal was to create an ecosystem of solutions to provide commodity assets to users in a seamless manner. Comdex seeks to give on-chain access to commodities assets with intrinsic and demonstrable value to users.
What is COMDEX?
The Commodities Decentralised Exchange Trading Platform popularly known as Comdex is bringing efficiency, speed, and transparency to the fragmented commodity trade business. Built on tendermint, Comdex’s mission is to improve the fundamental process of global commodities trade by reducing settlement times and increasing transparency, efficiency, and immutability in trade discovery and finance at remarkable speeds. The system is meant to integrate established banking protocols with modern technology to provide transaction and settlement confidence, speed, and scalability.
Comdex provides higher operational efficiencies, efficient data processing, and document management, as well as improved trust through the use of blockchain-based solutions for digital document provenance. As a result, early adopters have found it to be the best answer for their needs.
While some established commodities traders have advanced in-house trade platform solutions, the bulk of SMEs and MEs in emerging markets rely on antiquated communication and data sharing methods. Hence, there is a general lack of confidence between parties conducting cross-border transactions. Comdex addresses this problem by utilizing blockchain capabilities like immutability, provenance, and consensus, which minimize settlement time.
The blockchain establishes confidence between trading parties, Comdex, and trade financiers, who will be onboarded. The Comdex protocol is built on the Cosmos Network, a business blockchain similar to Corda or Hyperledger. The Cosmos Network is built on the Tendermint blockchain.
How does COMDEX Operates?
As a platform built on Cosmos, the Comdex Commodity Synthetics platform is built on a structure based on crypto-asset interoperability
Comdex functions in a way where ‘cAsset’ tokens are issued to represent commodity synthetics. Each commodity offered on the platform has its own unique ‘cAsset’ token; however, because these tokens reflect a single continuous futures contract, there is only one tradeable cAsset token per unique commodity. Comdex offers users two ways to create cAssets on their platform. These include:
● Genesis Liquidity Provision: here, the White-listed ‘Market Maker’ businesses establish the initial liquidity of cAssets on the platform. The Market Maker creates a specified quantity of cAsset to start a new cAsset trading contract, and ten effectively hedges against the short position’s possible fall by buying futures longs on controlled exchanges.
● Minting/Short Selling: this is accessible to short traders who often take a short position when they create cAsset tokens on the platform. The user must submit an over-collateralized USD denominated stablecoin deposit to mint a cAsset, which effectively functions as the margin for the position. If the short position’s loss pushes it to approach its liquidation threshold, this margin amount may need to be re-collateralized.
Focused on providing speculators with a seamless liquidity solution, Comdex uses an automated market maker module on its synthetic trading platform. What the automated market maker does is to provide liquidity in the form of ‘cAssets’ and ‘Stablecoins,’ which is funded by liquidity providers who hope to profit from both trading fees and liquidity mining incentives in the form of the native CMDX currency.
Not to mention the size of liquidity mining rewards in the form of the CMDX token is proportional to the amount of accessible liquidity on the platform as well as the volume of current trades. Hence, the bigger the ratio between a cAsset’s trade volume and its underlying aggregate liquidity, the higher the CMDX token incentive provided to the cAsset’s Automated Market Maker who are the liquidity providers.
Comdex intends to provide a solution that allows common investors around the world to have seamless access to a restricted asset class with intrinsic value by combining all of the above elements. We want to achieve our primary aims of democratizing commodities and linking DeFi and CeFi by developing solutions like ShipFi and Comdex Trading.
Conclusion
The negative effect of the pandemic on the commodity trading industry and the significant setbacks in the trade finance sector can not be overstated. As developing economies experience the most devastating impact, resulting in trade difficulty and cripple SME’s and MEs in the emerging market, it has also grounded the most strong economies to go into absolute lockdown, wreaking havoc on enterprises and cross-border trade. While this has increased the commodity trading and partnership problems significantly, the Comdex platform is bridging the gap to make trading accessible. They make available avenues for business counterparties to securely exchange documentation and establish digital trust. With the letting of restriction and businesses taking shape, individuals are increasingly looking towards Comdex solutions to prevent any potential misfortune.
Get started with COMDEX:
Website: https://comdex.one
Medium: https://blog.comdex.one
Telegram: https://t.me/ComdexChat
Twitter: https://twitter.com/ComdexOfficial
