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 gets regularly updated to reflect the top performing 500 companies by public market cap. Our back test generated a 6.6% annual yield.
A stablecoin that will add excellent value to lending protocols such as Compound and Balancer, with the potential to outperform current stablecoin yields offered on their platforms.
An ideal investment asset for DeFi Insurance protocols that have to invest $500mn + in stable, risk-averse products
Attractive investment asset to onboard institutional investors
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 a team of 3 Cambridge students:
Michael - Masters student with a background in financial services. Decades of experience working for leading bancassurance organisations.
Lukas - Masters student with a background in finance, law and data analytics. Work experience at Credit Suisse, McKinsey, and Latham & Watkins.
Taran - Maths & Physics undergrad and president of the Cambridge Blockchain Society.
We are looking for the following:
A grant of $10,000 to recruit an experienced solidity developer to complete the build of our protocol’s integration with Uniswap v3 DEX pool.
Feedback on the concept and community development. We anticipate having a fully functioning protocol in testnet within the next few months.
We are currently bootstrapping and all expenses to date (approx $1,500) have come out of our own pockets.