There Is A Problem In Crypto

The current exchange landscape in crypto finance is highly fragmented.

Sigmadex is proposing a creation of a synthetic asset marketplace where tokens tracking the performance of any asset can be created, listed and traded: from BTC, and other cryptocurrencies, to fiat currencies, to stocks and securities, real estate, commodities, art fact, any basket of any of of assets imaginable.

Traditional financial markets have to comply with KYC and other regulatory requirements, practically limiting market access to only a small subset ofthe world’s population. Sigmadex will allow investors anywhere to have exposure and take positions in any asset, without having to deal with overly complicated paperwork and a lengthy onboarding process, fulfilling the promise of DeFi and distributed ledger technology to, “bank the unbanked.”

Sigmadex caters to everyday people and investors, by increasing access and lowering the barrier of entry to the financial markets, while protecting traditional investors from predatory high frequency trading firms and arbitrageurs.

The synthetic tokens issued on Sigmadex will not be collateralized by the asset directly, but instead the tokens will track the price movement of the asset ina transparent and efficient way without relying on external dependencies, such as oracles or external validators, through Sigmadex’ dark pool’s midpoint pricing algorithm.

Through its dark pool trading and automatic price discovery, Sigmadex Protocol has the potential of becoming a universal worldwide marketplace for any tradable asset, as well as a leading, 24/7, on-chain price discovery mechanism via the Sigma Index.

There are a number of existing projects on the market that are offering synthetic asset trading to their customers. All these projects suffer from one major problem that none have managed to solve so far: they rely on external third party dependencies to establish current tradable prices, and as a result, these projects require excessive capital deposits, complex trade conflict resolution, and unsustainable artificial incentives to entice market makers to provide liquidity.

Conflicting Factors

There are two conflicting factors that we need to consider as we bring this design to market: the current state of DeFi is not sustainable, and that the demand for synthetic assets is undeniable and growing.

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Sigmadex intends to solve the aforementioned problems by creating a decentralized exchange with a dark pool based midpoint price discovery mechanism. Just like with Balancer and Uniswap, new pools representing new asset tracker tokens can be created at any time, where every pool could employ different rules determining transaction fees, level of leverage, market maker incentives, margin requirements, and so on.

Their goal is to create a marketplace where any asset can be traded against any other asset in a transparent, truly decentralized way without a need for KYC,or direct link to any traditional asset, or involvement of any traditional bank or custodian institution.

The creation of a decentralized, user-friendly, multi-asset brokerage and the incentivization users to add liquidity by introducing game theory bring a fresh left field solution to the liquidity and latency issues plaguing the current decentralized exchanges. Powered by Polkadot, VC backed and with a strong looking team and I would say there is no reason why they cannot forge a niche in the market for themselves. Only time will tell.

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