Today millions of people invest in financial markets without a rational approach to their investment decisions. Irrational market behaviour triggers boom and bust cycles that can have damaging economic consequences to households and businesses. Furthermore, in the era of social media the risk of financial market gamification has increased; assets can be pumped and dumped from just a single tweet or message board posting.
Eczodex believes self-pricing financial instruments are a solution to irrational market behaviour. Our entry offering targets the cryptocurrency markets with a stablecoin statistically proven to combine intrinsic capital growth with low volatility.
A back test against our prototype pricing algorithm, spanning 20 years, revealed that over 99% of daily price swings fell within the range of 0-1% and generated an average annual yield of 6.6%.
Our project is looking to address the following problems:
Bipolar investment selection - Investors can choose to invest either in volatile
coins that bear the risk of exiting at loss; or stablecoins not yielding any intrinsic interest.
Asset pricing driven by noise - Social media has increased the risk of financial market gamification; assets can be pumped and dumped from just a single tweet or message board posting.
CBDCs threaten stablecoins - Central bank plans to launch stablecoins creates an
existential threat to fiat-pegging stablecoins.
Building on the initial success of dynamic pegged coins such as RAI and Float, Eczodex aims to further innovate in this space, providing price stability with a free floating asset.
Our prototype coin, modelled on US fundamental data, draws on the quarterly balance sheets of public listed companies to set its pricing peg. The result is a coin with 2000 price updates per year, is free floating against the dollar, and does not require a fixed peg to maintain stability. Instead, price stability is achieved simply by virtue of the weighted average book values of the companies that make up the composition, which is regularly updated to reflect the top performing 500 companies by public market cap. Our back test generated a 6.6% annual yield.
Stablecoins are well represented on the AAVE platform; therefore, Eczodex is well positioned to contribute to expanding the AAVE ecosystem.
It is an ideal investment asset for DeFi Insurance protocols that have to invest $500mn + in stable, risk-averse products
It is an attractive investment asset to onboard institutional investors
It provides an alternative to negative or low yielding bank accounts, encouraging further adoption of DeFi products and services.
To date we have developed the protocol design and prototype pricing algorithm.
We have initially received very promising and positive feedback within the Cambridge University ecosystem, encouraging us to design and develop an initial prototype on Ethereum’s testnet. Now we want to take the next step and further validate our proposition within the DeFi community.
We are targeting the following milestones:
- Develop our market making smart contract which will integrate with Uniswap v3 (2months)
- Develop the pricing algorithm (3 months)
- Develop the treasury management smart contract (4 months)
- Release a fully functioning prototype to Ethereum testnet (4 months)
- Obtain legal counsel covering all legal & regulatory aspects of the launch (4 months)
- Community building and prototype feedback (4 - 6 months)
- Stablecoin launch (7 months)
We are a team of 3 Cambridge students:
- Cambridge University (post-grad), UCL
- Background in Back-office software application architecture
- 20+ years IT experience as contractor to leading bancassurance organisations
- Managing Director of Fast-food franchise in London
- Cambridge University (post-grad), Imperial College, Warwick
- Background in Law, Finance, Data Analytics
- Work experience with McKinsey, Credit Suisse, Latham &Watkins
- Founder of MergerSight - leading M&A platform
- Cambridge University (Maths & Physics undergrad)
- President of the Cambridge Blockchain Society
- Work experience at CMR Surgical and in E-commerce
Funding Request and Budget Breakdown
We are looking for the following:
A grant of $25,000 to recruit an experienced solidity developer will enable us to develop the following elements:
Market making smart contract
Treasury smart contract
Release to testnet
Feedback on the concept and community development. We anticipate having a fully functioning protocol in testnet within the next few months.