Crypto exchange ShapeShift has today announced the newest addition to the ShapeShift family. Its name is Prism. It is built entirely upon Ethereum-based smart contracts. The company stated they are also looking forward to bringing this product to Rootstock (RSK) on bitcoin in the near future.
Prism is a platform upon which humans and machines can acquire exposure to portfolios of digital assets without trusting a counterparty. 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.
An 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 have risen an average of 25%. Sarah chooses to close her Prism, and she receives 125% of the collateral she deposited (less 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 first idea to 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allowed Sarah to avoid leaving funds at an exchange – her collateral was held in a smart contract, which may only be withdrawn to her pre-stated Ethereum account.
The Prism portfolios are fully-collateralized by both parties, so there is no risk of non-performance. Risk is herein minimized: with trust placed in objective open-source code, instead of upon the subjective whims of a human counter-party.
CEO of ShapeShift Eric 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.”
Closed beta invites will be available shortly at prism.exchange.