The Future Of Commodities Exchange
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.
A commodities exchange is a legal entity that determines and enforces rules and procedures for trading standardized commodity contracts and related investment products. A commodities exchange also refers to the physical center where trading takes place. The commodities market is massive, trading more than trillions of dollars each day.
Traders rarely deliver any physical commodities through a commodities exchange. Instead, they trade futures contracts, where the parties agree to buy or sell a specific amount of the commodity at an agreed upon price, regardless of what it currently trades at in the market at a a predetermined expiration date. The most traded commodity future contract is crude oil. There are several types of modern commodities exchanges, which include metals, fuels, and agricultural commodities exchanges.
The nature of commodities exchanges is changing rapidly. The trend is in the direction of electronic trading and away from traditional open outcry trading, where traders meet face-to-face and trade in what is known as a trading pit. Commodities exchanges are the central location where commodities are traded.
Essentially, a blockchain is a series of records, very much like a general ledger or a flat database. But its uniqueness comes from the mechanism it uses to validate and protect those records. Basically, a blockchain is a series of records, very similar to a general ledger or a flat database. But its uniqueness comes from the mechanism it uses to validate and protect these records. All data recorded cannot be changed either corrupted or deleted.
In the world of cryptocurrencies, we may define a smart contract as an application or program that runs on a blockchain. Typically, they work as a digital agreement that is enforced by a specific set of rules. This means that two parties can make commitments via blockchain, They can be sure that if the conditions aren’t fulfilled, the contract. Other than that, the use of smart contracts can remove the need for intermediaries, reducing operational costs significantly.
Problem Of Commodities Exchange
Nowadays Blockchain and tokenize are booming. The numbers speak for themselves — market capitalizations have gone through the roof, transaction volume has skyrocketed, and adoption from individuals, corporations, and governments has reached a global scale.
Thanks to blockchain technology, transaction are moving with no need of third parties to exchange goods. Yet today’s digital commodities exchanges are centralized. They have proven to be vulnerable to hack and often run with a high regulatory risk. And also in addition, to enter the centralized commodity Exchange is not easy, requires large costs, complicated government regulations, and many other things. Commodity businesses line and active traders need new breakthroughs.
MBTO and FDCE As Solution
MBTO and FDCE are platforms that succeed in seeing opportunities from the advancement of Blockchain technology. Then ,they combine it with the commodity sector. They are a solution for business in the commodity sector, providing easy way to related business lines to creat digital assets (tokenize) and providing easy way to tarde these assets
How does they do that ?
Smarctcotract !! Yes, they use Smartcontract on the CREDIT Blockchain Network to create a decentralized commodity asset. By using their platform, the commudities business lines can easily creat and sell bonds of their company through the FDCE platform. The advantage of using smartcontact as proof of bond ownership of a product is that the guarantee given cannot be changed and falsified and ownership can move quickly, I mean , if someone wants to sell the ownership of the bond they only need to sell it on the FDCE Platform.
Check out the explanation.
1. The company (A) wants to tokenize their product (approx. 1 kg of palladium) in order to sell bonds through the FDCE platform.
2. The company (A) provides a “warrant” for its products, which consists of two documents. The first in the form of a storage certificate shall be deposited at the following location custodial service. The second is in smartcontract based on blockchain Credits
3. MBTO Platform issues a token of “bonds” and delivers it to FDCE ,
4. The new asset ( Token of Bonds ) becomes available for trading on the FDCE platform.
What’re key feature they’re provide ?
Trading operations as well all transactions can’t be banned or cancelled by anyone, including governments
Faster and Lower Transaction Cost
By utilizing smart contracts to create digital assets for a particular commodity, sending and trade executon will be fast with lower cost.
As mentioned above that the data recorded in the blockchain network cannot be changed, stolen or deleted, it makes all assets created on this platform cannot be changed, stolen and deleted and also with the Asset feature validation mechanisms through two-factor “escrow system “, data and assets owned by the user become safer.