WHAT IS SWAPBLOCKS?
Swapblocks is a marketplace platform that takes a new approach to digital asset issuance, exchange and market governance. The current blockchain environment for these services relies on smart contracts that are individualized for each asset. This approach lacks efficiency because it requires the asset’s smart contract to be voided and reissued anytime a change in the regulatory environment occurs. Furthermore, market participants have very little visibility into future costs associated with operating on a platform. Lastly, swapblocks removes the unfair advantage large institutions (i.e Banks) have in today's market structure by enabling small players to pool their infrastructure without giving up control of their own businesses.
Swapblocks will solve these issues by allowing various markets to operate independently of other markets in the ecosystem. This creates an extremely flexible environment that can accommodate the issuance, management, and exchange of a wide array of asset classes. From the issuance of securities such as stocks, bonds, and derivatives to real assets like property, equipment, and commodities to more niche use cases like public data validation, swapblocks will offer participants in these markets the ability to implement market standards for transaction validation that comply with relevant regulations for their market segment and are easily adjustable.
BREAKING DOWN 'Decentralized Market' in full explanation
The foreign exchange market is an example of a decentralized market because there is no one physical location where investors go to buy or sell currencies. Forex traders can use the internet to check the quotes of various currency pairs from different dealers from around the world.
In a basic sense, a decentralized market is where a variety of assets are bought, sold, or traded. Real estate, for example, is traditionally sold through a decentralized market, wherein buyers and sellers complete their transactions without first funneling the process through some sort of clearing house. Bonds and securitized products can also be procured through decentralized markets.
The advent and rise of blockchain technology and cryptocurrency have created more opportunities to for decentralized markets to operate. Through such technology and mediums, buyers and sellers are afforded a sense of security and trust in transactions without the need for a central clearing house to monitor and affirm the transactions.
Why Decentralized Markets Are Used
Among the perceived benefits of decentralized markets is the fact that it can greatly reduce the possibility of hackers compromising accounts or transactions because there is no single data resource they can attempt to infiltrate.
Decentralized markets can allow for transparency between parties, especially if they use technology that ensures all parties share mutually agreed upon data and information in the transaction.
The concept of decentralized markets, in a basic sense, might not be new, however as more financial transactions are conducted through them they can pose challenges for regulators and legal enforcement. By comparison, centralized markets give regulators a clear path for taking action if necessary regarding suspect transactions that may occur.
With the examples of blockchain and cryptocurrency, the absence of regulatory oversight of decentralized markets is often cited as a benefit by advocates for those technologies.
The continued growth of decentralized markets for financial transactions that use cryptocurrency has led to discussions on ways to potentially introduce regulation and enforcement. For some advocates of decentralized markets, this may diminish some of the benefits they sought for anonymity and direct control over the transactions they engage in.
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