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8base (https://t.me/chat_8base) team participated in, and ultimately won, the CoinDesk Consensus 2018 Building Blocks Hackathon challenge presented by AlphaPoint in New York City!


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Representing 8base in the Consensus 2018 Building Blocks Hackathon was VP of Technology, Andrei Anisimov, Director of Design, Gabriel Kelly, and Engineering Team Lead, Evgeny Semushin. They participated in a weekend of building, hustling, and deep-diving into the blockchain industry’s most cutting edge developer tools alongside many of the world’s top blockchain developers vying to build the next killer smart contract app. Participants were allowed to build on top of any blockchain protocol and through various sponsor challenges, were encouraged to leverage the software and support made available to deliver their solutions.

The 8base team participated in the AlphaPoint challenge to build an application tied into a digital asset exchange, with guidelines to digitize an asset and integrate it into the blockchain, build a merchant processing application, build a market marking tool, and build a custom trading front end. Rising to the task, Andrei, Gabriel, and Evgeny were awarded first place by creating BlockSigma — a set of smart contracts that enable the creation and management of derivative contracts for crypto assets. The margin management is done on-chain and doesn’t require a centralized actor to ensure that the funds locked inside of the smart contract satisfy the maintenance margin requirements.

Inspiration
Derivatives are a big deal. Global derivatives are estimated to have a ~$500 trillion market capitalization. Comparing to $0.4T crypto, $38T liquid money and $73T global stock markets. Derivatives, such as options, futures and swaps are useful tools employed by banks, funds and companies to manage risk.

At the same time, derivatives are usually leveraged — meaning that counterparty doesn’t usually have funds in their account to necessarily cover all risks. This leads to a complex system of settlement, maintenance margin and margin calls. This system failed in 2008. Margin calls destroyed Lehman Brothers and others. Government had to bailout Wall Street to help unwind staggering amount of defaulted derivative agreements.

How they built it
The core innovation is fully on-chain margin management that requires no central party or oracle price feed. This was achieved by integrating with the Bancor protocol, which is growing in adoption and already facilitating millions of dollars of daily trading activity. Bancor uses a deterministic price formula that is calculated based on supply and demand of a token. As such, BlockSigma can get token price at any given moment on-chain, which allows the calculation of the maintenance margin requirement and the ability to trigger a margin call.

Additionally, BlockSigma integrated the AlphaPoint trading platform to enable trading of the option contracts created. In the future, BlockSigma’s option management user interface would allow trading derivatives just like traditional brokers like Bloomberg or TD Ameritrade.

Winning first place
After many grueling hours building this solution, our team presented BlockSigma and was awarded the first place prize by AlphaPoint based on the criteria of: it’s use of distributed ledger technology, implementation and tech quality, a solution to a real life problem, presentation quality, and market readiness.

Full blog post: https://blog.8base.com/8base-team-wins-first-prize-at-consensus-2018-hackathon-alphapoint-challenge-a8cedd7ce15d

Join us on: Telegram (https://t.me/chat_8base) | Twitter (https://twitter.com/8baseinc) | Medium (https://blog.8base.com)

Visit us: Website (https://www.8base.com/)

Yes, congrats to 8base and it sure one of the best experience so far. I'm pretty sure that this is a big boost to your company as well and probably can get you more clients in the future. Question though:

• What are you plans with this appliation though
• If you have plans to roll this out, will it be more beneficial for individual, or is it design to be used by institutional investors only?

Thanks for sharing the image post!!

Thank you for the kind words! As for the hackathon project, this application was intended to give a preview into what blockchain can bring to finance in the near future, as per the hackathon challenge. In order to become a real product, whether consumer or institutional, there is more work that needs to be completed on it. Currently, the main priority of our dev team is building the core 8base (https://www.8base.com/) platform. The team might get back to the BlockSigma project in the future if we feel there is a demand for such solutions among the 8base user base.

To stay in the loop with what we're releasing, join us on: Telegram (https://t.me/chat_8base) | Twitter (https://twitter.com/8baseinc) !

Thanks for the clarification, so it looks like you already scratch the surface so most likely this is just the beginning of something big. And I'm sure that at the back of your mind, sooner or later you are going to release a full version whether of consumer or institutional used as there will be likely a demand for such solutions. Goodluck!!!

Another big congrats to the 8base team!