Cryptocurrency exchanger company ShapeShift announced today the newest addition to the ShapeShift family with the forthcoming launch of new service.
The company is launching ‘Prism’ a platform upon which humans and machines can acquire exposure to portfolios of digital assets without trusting a counterparty. It is built entirely upon Ethereum-based smart contracts.
These portfolios (called ‘Prisms’) are customizable in size, allocation, and duration. One acquires a Prism using nothing but an Ethereum wallet as the tool, and Ether as the collateral.
Using Ether to provide full-collateralization by both parties, there is no risk of non-performance. The risk is herein minimized: with the trust placed in the objective open-source code, instead of upon the subjective whims of a human counter-party.
Example: Sarah is bullish on privacy-centric digital assets and wants to easily and safely invest $5,000 in them.
- She designs a Prism consisting of 1/3 Dash, 1/3 Monero, and 1/3 Zcash, putting up $5,000 of Ether as collateral.
- Upon creation, a unique smart contract tracks the value of her three assets and holding her collateral. It also holds an equivalent amount of collateral from another party who took the opposite position (this other party is ShapeShift, for now).
- Three weeks later, the price of the three components has risen an average of 25%. Sarah chooses to close her Prism, and she receives 125% of the collateral she deposited (minus fees).
By setting up the Prism, Sarah didn’t need to find a trustworthy/convenient wallet for each coin. Other than Ethereum, she didn’t need to sync anything or manage disparate keys. The entire process from the first idea to the instantiated contract takes Sarah five minutes.
Most importantly, Prism allowed Sarah to avoid leaving funds at an exchange – her collateral was held in a smart contract, which may only be withdrawn to her pre-stated Ethereum account.
CEO of ShapeShift Erik Vorhees stated:
“Some day, we imagine, nearly all financial infrastructure will be built upon open, objective, non-discretionary code. The ability of a human to decide not to fulfill a transactional obligation (either by mistake or malice), will seem quaint. Inevitably, an economy is more efficient, honest, productive and fair to the extent it is built upon the laws of code and mathematics, instead of the laws of men. Pre-blockchain, that was impossible.”
“Upon products like Prism (itself built upon the pioneering work of blockchain protocol engineers), it is our hope that some day it won’t merely be possible, but indeed the expectation, that finance itself becomes provably fair; not by the decree of politicians, but by the demanded security and supplied innovation of a marketplace set free. Society deserves nothing less.”
“While Prism is, in a sense, an exchange platform, to our knowledge nothing like it has ever existed in a live, production capacity. No bank or traditional financial institution, with their billions in capital and polished claims of consumer protection, has ever brought something like this to market.”
“That we, a small startup, can build such a thing and release it to the world is a testament to the power of open blockchain technology.”
ShapeShift hinted that they are also looking at potentially bringing this product to Rootstock (RSK) on Bitcoin in the near future.
Closed beta invites will be available shortly at prism.exchange.
