The Swiss blockchain Startup ShapeShift has been reported to start a new kind of exchange called 'Prism' to trade cryptocurrencies that is going to be focussed on the sale of 'synthetic Ethereum assets', as they call it. Prism enables users to create smart contracts called 'prisms' that is used to mimic the fluctuations of the prices of other assets/currencies traded on the exchanges using ether as a base currency/asset.
One of the main objectives of Prism is to reduce the counterparty risk of the exchanges storing your coins. The product according to the CEO Voorhees is to target casual and less experienced traders to gain exposure into this whole new world of cryptocurrencies or digital currencies. Given the recent events that have unfolded such as exchanges getting hacked, fraud and impaired fiat conversion operations have made users distrust exchanges.
The way prism works is for users to deposit certain amount of money (in USD) and choose to invest them in any of the assets and select the level of exposure they would like to have relative to all the fluctuations. So in each transaction, the ether in the smart contract changes its contract terms based on data received from the exchanges. Prism also seeks to create a whole community environment where there would be leaderboards for the most successful prisms and the ability to share thoughts and trades.
For now, shapeshift will be the counterparty to every transaction, but in the future they would have the option to bet against contracts set up by other users. And the Users would be charged a flat 2.4% fee to close out Prisms, as well a 0.05 ETH fee that covers the cost that ShapeShift must pay to run the smart contracts on the public ethereum blockchain.
More details on that later.
Image Credit: Bitcoin Magazine
Check it out. Really cool.
I heard about this recently. Sounds pretty Exciting.
Its a great new feature for newcomers.
bery inderesding
I agree.