Block Transfer
Open Source Wall Street
The problem Block Transfer solves
We've built a set of open source tools that introduce stock market infrastructure to Stellar. These interfaces can be used by agents to manage shares between companies and their investors. At a high level, the toolkit solves the material market problems exposed by the GameStop fiasco.
Real World Use
Blockchains promise general wealth equality, but we think that only happens with asset equality. In today's capitalist system, true wealth comes from investing—in your portfolio, home, or business. However, there is no web3 system enabling quality equity investments or business fundraising.
Complex Compliance Protocols
We have uncovered the nuances of securities regulations firsthand as an entity registered for the past 3 years with the U.S. Securities and Exchange Commission as an agent. By learning the existing public policies around investment capital, the system published adapts to American oversight, control, and disclosure requirements. In recent efforts to open-source our tech, we hope to expand this compliance across a global stage.
Non-Crypto Investment Options
Stocks and bonds are part of a well-diversified retirement portfolio, but there are almost no tools to invest in these assets. Namely, existing solutions try to offer these products through custodied platforms like a broker-dealer platform, wallet without keys, or depository ownership scheme. Our system uses trustline flexability to enable self-custodied accounts that can trade directly though Stellar.
Removes Centralized Risks
There are ongoing concerns as to the stability of Wall Street in the wake of naked shorting and the DTCC. These concerns have coupled with increasing activism over The Great Taking, a documentary exposing the mounting risks in global regulation. Our system offers an alternative trustless solution.
Challenges I ran into
This is a large and complex project aimed at taking down the central role of stock exchange middlemen. Much of this hackathon was spent reviewing securities case law and writing open source documentation. As discussed, the system's design revolves around complying with stock market regulations, and we think that clear documentation of these rules will help the entire crypto community adopt compliant web3 securities.
Public Policy Committment
Relevant to these challenges are the years of background understanding and developement which are best documented in relation to the hackathon in this Discord at this thread. This sparked further discussion about the ongoing challenges we faced having bank accounts shut down after Circle halted its ACH developer APIs. Revelations following material market consideration lead to our current regulation-first banking approach.
Insider Trading Balances
Our community was initially sceptical as to our implementation of KYC and AML practices throughout regulated activities. The systems are built around existing rules for corporate employees, but it can be challenging to accurately identify ongoing inside knowledge without a specific internal control program at every issuer's company. We put the item out to the community to discuss and are using their feedback while building IssuerLink.
DEX User Protections
Our system aims to minimize trading venues to maximize price discovery. Today's stock trades could route to one of hundreds of different computer servers across dozens of unique companies. Upcoming SEC and SEBI work pending.
Tracks Applied (1)