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Author Topic: Implementing IndexCoin on top of MasterCoin  (Read 1327 times)
bitblu
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October 09, 2013, 08:40:54 PM
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We are building an investment platform that specializes in crypto-currencies and other crypto-assets. A major part of our offering is the ability to purchase composite assets that automatically diversify into the various alt currencies, AKA "IndexCoins".

What occurred to us is that soon, using MasterCoin backed currencies feature, we could implement such indexes as trustless independent assets! (assuming the whole backed currencies feature works, which still remains to be seen).

We could program the creation of an asset, backed by a Trust Fund, that aims to track the index itself.
This is how it could work:

1. We would publish price feeds of the various alt currencies on top of the MasterCoin blockchain.
2. We would then create a new backed currencies, backed by Mastercoin for example, that tracks the weighted average of the top 10 currencies in our feed.

Regulatory wise, this might mean that we are no longer "creating an index" on an ongoing basis, because what we'll be doing is just publishing a price feed of the alt currencies, not managing the composition. The price of the new index coin will be automatically calculated by the Mastercoin blockchain (or rather the clients implementing it), and the fund would purchase or sell coins based on the discrepancy between the price of the new coin and its underlying assets, just like any other backed currencies.

TL;DR - if "backed currencies" can be used to implement GoldCoins, they can be used to implement IndexCoins.

Bitblu (http://bitblu.com) - The easiest way to build your cryptocurrency portfolio.

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StarenseN
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October 09, 2013, 08:45:37 PM
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Interesting idea.
dacoinminster
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October 09, 2013, 08:52:27 PM
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That's a cool idea. Probably the simplest implementation would be to allow for the creation of datafeeds which are dependent on other datafeeds (and thus don't have to be actively published - they can just update any time their constituent parts update).

There's no reason this couldn't work as you describe, although a lot of other work has to happen first, obviously Smiley

P.S. Is bitblu going to crowdfund by selling a smart-property IPO on MasterCoin? We'll be able to accommodate that soon! Wink

bitblu
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October 09, 2013, 09:10:51 PM
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That's a cool idea. Probably the simplest implementation would be to allow for the creation of datafeeds which are dependent on other datafeeds (and thus don't have to be actively published - they can just update any time their constituent parts update).

There's no reason this couldn't work as you describe, although a lot of other work has to happen first, obviously Smiley

P.S. Is bitblu going to crowdfund by selling a smart-property IPO on MasterCoin? We'll be able to accommodate that soon! Wink

Heh, we have enough regulatory issues as it is, although it's a definite possibility worth considering.
We're focusing first on understanding our regulatory path, building a good business plan, testing out the market ... we'll look into what it means to do an IPO, regulation wise.

Bitblu (http://bitblu.com) - The easiest way to build your cryptocurrency portfolio.

Blog (http://blog.bitblu.com/) | Twitter (https://twitter.com/bitBluCom) | Facebook (https://www.facebook.com/bitblu4crypto) | Google+ (https://plus.google.com/104150799860485132910/posts)
prophetx
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October 11, 2013, 04:08:17 PM
 #5

We are building an investment platform that specializes in crypto-currencies and other crypto-assets. A major part of our offering is the ability to purchase composite assets that automatically diversify into the various alt currencies, AKA "IndexCoins".

What occurred to us is that soon, using MasterCoin backed currencies feature, we could implement such indexes as trustless independent assets! (assuming the whole backed currencies feature works, which still remains to be seen).

We could program the creation of an asset, backed by a Trust Fund, that aims to track the index itself.
This is how it could work:

1. We would publish price feeds of the various alt currencies on top of the MasterCoin blockchain.
2. We would then create a new backed currencies, backed by Mastercoin for example, that tracks the weighted average of the top 10 currencies in our feed.

Regulatory wise, this might mean that we are no longer "creating an index" on an ongoing basis, because what we'll be doing is just publishing a price feed of the alt currencies, not managing the composition. The price of the new index coin will be automatically calculated by the Mastercoin blockchain (or rather the clients implementing it), and the fund would purchase or sell coins based on the discrepancy between the price of the new coin and its underlying assets, just like any other backed currencies.

TL;DR - if "backed currencies" can be used to implement GoldCoins, they can be used to implement IndexCoins.


I am interested in this field.  Would like to talk to you all and learn more to, and explore if there is something I can contribute.

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