Hedgy launches blockchain platform for forward contracts for traders

Hedgy, a blockchain-based smart contract project, recently released a demo of its platform, allowing traders to independently create, execute and settle over-the-counter (OTC) forward contracts on their platform.

In April this year, Hedgy received $1.2 million in start-up funding from investors including Draper Fisher Jurvetson and its partner Tim Draper, Marc Benioff (CEO of Salesforce) and Sand Hill Ventures.

Forward contracts are a hedging tool that emerged in the early 1980s. They are over-the-counter transactions. Like spot transactions, both parties to the transaction are at risk. Therefore, forward contracts are usually not traded on exchanges.

Hedgy's goal is to provide traders with a more transparent, less shady OTC transaction with the help of blockchain technology. Transactions on the blockchain are irreversible and difficult to tamper with, so smart contracts based on blockchain technology can automatically verify and verify the obligations stipulated in the contract for both parties to the transaction.

Hedgy wrote in its latest report:

“The theory of our project is very simple. Just like Bitcoin is an application of blockchain, we can also create a more secure OTC forward contract application platform based on blockchain. This platform will be more open and reliable, and can make the financial industry a decentralized model.”

Hedgy's software uses multi-signature technology, a new technology to protect the security of Bitcoin. In addition to the two parties involved in the transaction, there is also a third party called "Oracle".

The Hedgy development team explained:

“An oracle can be an independent trusted third party (TTP) or a group of distributed entities that programmatically sign claims about the state of the system by receiving external data. Oracles combine this information with the contract code to execute the contract.”

Hedgy also used the standards of the International Swaps and Derivatives Association (ISDA) in its development to create a cryptographically signed, immutable smart contract sample that mimics the functionality of a master agreement, allowing global traders to execute and settle OTC forward contracts on the blockchain.

Original article: http://www.newsbtc.com/2015/11/12/hedgy-to-revolutionize-the-otc-financial-market-with-blockchain-based-smart-contract-platform/
By Joseph Young
Translator: Bibit
Editor: printemps
Source (translation): Babbitt Information