The Application Prospects of Blockchain Technology in Forex Trading

The combination of blockchain technology and forex trading provides new possibilities for solving many problems in the traditional forex market, and is expected to bring users a better trading experience.

An emerging blockchain project is dedicated to applying decentralized technology to the fragmented and traditional forex market. By building a robust blockchain infrastructure, the project aims to manage and process all transactions in this vast market. The project team recognizes that utilizing digital currencies such as stablecoins can effectively address the challenges faced by fiat currency exchanges. However, currently, fiat currency holders find it difficult to directly access stablecoins, and the project is striving to fill this market gap.

Project Financing and Background

The project was established in December 2020, co-founded by two co-founders. One of them previously worked at a large investment company and has four years of experience in the blockchain field, bringing strategic insights to the project. The other is an experienced engineer with over ten years of work experience in finance, energy, machine learning, private equity, and consensus systems, providing the team with technical expertise.

In November 2022, the project raised $10 million through a round of financing, receiving support from several well-known investment institutions. This round of financing reflects the industry's broad recognition of the project's vision and technological roadmap, although there was no clear lead investor.

Technical Architecture and Functions

The project is built on the Cosmos SDK and is designed as a foundational Blockchain specifically for decentralized applications. It is known for its openness, permissionless nature, and high interoperability, supporting cross-chain token minting, trading, and stablecoin lending. The bridging technology developed by the project facilitates cross-chain stablecoin trading, acting as a decentralized exchange and enhancing cross-chain liquidity.

By utilizing the Inter-Blockchain Communication (IBC) protocol, the project can seamlessly connect with other blockchains in the Cosmos ecosystem. The project has designed a central integration point to facilitate interoperability between different blockchain ecosystems, ensuring a unified user experience. At the core of the network is its native token, which secures the network through a proof-of-stake consensus mechanism. Token holders can earn staking rewards through delegation or validation, and enjoy governance rights within the network, pay bridging fees, and serve as collateral for stablecoin issuance.

Product System Overview

1. Blockchain network: Operates within the Cosmos ecosystem, utilizing Tendermint BFT consensus and IBC protocol. It serves as a powerful P2P protocol to validate transactions and rewards validators for their contributions through native tokens.

2. Decentralized Exchange: A powerful cross-chain DEX that supports efficient and liquid cryptocurrency trading. It integrates AMM and order book methods to facilitate stablecoin trading pegged to major fiat currencies.

3. Multi-functional Wallet: A non-custodial multi-currency wallet that integrates functionalities of specific tokens, such as staking and governance. Users can access DeFi opportunities through a single QR login, without the need for multiple wallets or browser extensions.

4. Reserve System: Acting as the reserve bank for the project, managing collateral, and increasing the total coin flow on the platform. This reserve further supports debt curve issuance, ensuring stable and predictable operations.

Stablecoin Mechanism

The project manages various fiat-pegged stablecoins through its reserve system, bringing them into the DeFi ecosystem. These stablecoins allow users to trade, lend, and mint within the ecosystem, not limited to dollar variants but also including multiple currencies such as euros, pounds, and yen.

Through reserve ratios, minimum collateral ratios, and other control mechanisms, the project aims to maintain the stable value of the stablecoin, keeping it in line with fiat currencies. Additionally, the project simplifies user access to the native token through the issuance of a debt curve, enabled by deterministic pricing and a highly liquid market. This continuous token model replaces traditional token pre-sale methods, continuously minting new tokens based on demand and algorithmic pricing.

Overall, the project replicates existing financial infrastructure in a more decentralized and transparent manner in multiple aspects, bringing innovative solutions to the forex market.