A fundamental architectural improvement to stocks and the stock market.
The New York Stock Exchange was created in 1817 and has seen little in the way of updates since then:
- Trading hours are limited, even within the US.
- Purchasing internationally is difficult and the options are limited.
- Trades take 2 days to settle and truly finalize.
The market is dominated by institutional investors who seemingly act against smaller retail investors for profit, with all of the advantages of being deeply entrenched players in the market. Retail investors recently fought back against institutional short sellers and in return, saw their trading options restricted on various platforms.
The current stock market is archaic and DeFi is vastly improved:
- DeFi has no trading hour limits.
- You can buy/sell/trade anything, anywhere in the world.
- Transactions settle in ~10 minutes.
- Trading cannot be restricted.
If Tesla announces a new product outside of trading hours, DeFi can respond immediately, whereas the stock market can only respond when the market opens the next day. No one can limit the trading of tokens on DeFi.
DeFi is an obvious architectural improvement and it makes sense to port the stock market to DeFi
With StockSwap, we’re building a protocol to wrap stocks and make them available on DeFi. Each stock token is backed 1 to 1 by real stocks, which are purchased and held by a custodian. Buying wrapped stocks allows investors to participate in the market in a way that synthetic stocks never can: by actually affecting the price of the stock with your trades.
Traders can arbitrage price differences between the wStock and the normal stock by purchasing wStock from the custodian and selling on a DEX, and vice versa. DeFi is truly international, and anyone would be able to buy any wStock from anywhere in the world, expanding the market potential of the stock dramatically.
With StockSwap we hope to serve as a catalyst in updating the stock market to this new and improved architecture.
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