The plot struck and looked at how the $ 483trn OTC derivatives market is changing

Reporter: pencil boxn
FORTUNA Fang Diao should be Xiaobian So far seen in the “financial blockchain” direction, cut into the depth and accuracy of one of the highest. Compared to “pan-financial assets” or even “all-asset-like” blockchain trading platforms, such blockchain projects with extremely high positioning accuracy and highly directional nature tend to have higher professional backgrounds and experience in the team Request.n
A huge space marketn
Borrowing from an essay written by Mr. Liang Bin, the founder of the plan, “throwing a stone in the $ 483trn OTC derivatives market”. Although the cut chart is a financial market segment, but the size of this market segment is staggering.n
According to the annual statistical report of Bank of International Settlements (BIS), the total amount of global OTC derivatives in 2016 totaled 483 trillion U.S. dollars. Compared with other industries, the OTC derivatives market is equivalent to 252 electricity providers Industry, 4849 games industry, 12513 movie industry. If we compare the national GDP, the total GDP of China from 1952 to 2016 is 103.5 trillion U.S. dollars, equivalent to 21.4% of the total nominal amount of the OTC derivatives in 2016. Xiaobian can only say that the square of the subject “market segment” is too large.n

However, the huge market size does not mean that the project itself must be able to be bigger. More importantly, the business logic of the project application scenario is clear and reasonable.n
A pain point clear solutionn
The chart shows very clearly the advantages and disadvantages of the “Exchange” and “OTC” markets in the area of ​​derivatives trading:n
The advantage of the exchange market is that it has a complete set of risk control guarantee system, including margin account system, central counterparty, settlement guarantee fund and membership system, which can effectively control the counterparty risk. The disadvantage is that all contracts are designed and developed by the exchange and only support standardized contract transactions. All trading elements and terms can not be modified to any degree, and can not support personalized derivative contracts.n
The advantage of the OTC market is that it supports personalized derivative contracts, so the size of the OTC market is much larger than the size of the exchange market. The disadvantage is the lack of a complete security control system and margin account system, counterparty risk, while the transaction process requires a lot of manual participation, operational efficiency is very low.n
The chart clearly captures the core pain points of the two OTC derivatives markets such as “huge credit risk” and “inefficient operation”, and proposes a set of solutions based on the blockchain technology system:n

n1. Effective use of “derivatives smart contract to encrypt digital tokens,” the effective combination of automatic contract delivery and the realization of “decentralized margin account system” to effectively control counterparty risk;n
nn2. Utilize the quoted structured quotation for structured smart contracts to effectively improve the operational efficiency of all links such as demand connection, price matching, contract creation, contract signing and contractual settlement;n
nn3. Using the “consensus network of distributed algorithms” to achieve a safe, reliable, fair and equitable, free and flexible, to intermediary derivatives trading environment.n
nThe pain points solved by the diagram are very clearly stated in the white paper. However, the white paper is completely different from the commercial implementation. The former looks at writing and thinking while the latter depends on the founder and the core team.n
A group of top elites from Chinan
Now most of the “old leek” basically do not see “domestic projects”, looking for two foreigners platform, decorate the facade of the project, it is directly skip. However, open the core members of the list of diagrams, Xiaobian eyes bright:n
All-Chinese, yellow skin, dark eyes. However, from the perspective of their qualifications and curriculum vitae, they are even more dazzling than the background of the teams in most overseas projects. From the academic point of view, the core members of Fang Tu team graduated from Yale University, Oxford University, Columbia University, University of Chicago, Tsinghua University, Zhejiang University and other world top elite. Curriculum vitae from the perspective of the core members of the chart team from OCC, Factset, McKinsey, Nomura, Alibaba, Tencent, Baidu, Microsoft, Huawei and other world-renowned enterprises.n

However, only the resume and bachelor degree are very eye-catching. In fact, there is not much use for the project. What really matters is the match between the team’s ability map and the demand direction of the project. In order to depth analysis of the square chart this project, Xiaobian in-depth contact with the core members of the chart team, the basic analysis drawn as follows:n
At present, the total figure of the party figure team is about 20 people. Although it is still under continuous development, its manpower is still insufficient. The success of the Cartography project presupposes at least enough talent in three areas: finance, technology and operations.n
In terms of the financial sector, the team currently has three core players, one is Fang Liangbin, founder of Fang Tu, graduated from Yale University Department of Computer Science and has been working in investment banks in New York, London, Hong Kong, Shanghai and Hangzhou since graduation. Supply chain finance, cash management, private banking and other areas of financial business. At the age of 26, he started to serve as Deputy Division Chief of state-owned banks. Prior to founding the plan, he was the general manager of the private banking department of Bank of Communications Zhejiang Branch, familiar with the operating system and regulatory system of China’s financial markets. One is Luan Zuotian, who studied and worked in the United States for nearly 15 years. The top prestigious dual master (Computer Science Master from Yale University and Master of Financial Mathematics from the University of Chicago) joined Option Diaz (OCC) Corporation, as a core member of its core unit, Quantative Risk Management, with extensive experience in global derivatives markets such as financial derivatives pricing, risk control, liquidation and trading. Xiao Bian especially with the China Financial Futures Exchange, a friend who inquired OCC this organization, a friend told me directly, every year China’s four major futures exchanges will send many executives to study Occ; one is Yangjian Dong, join the party map Previously a quantitative trading fund manager at Shanghai Pumice Stone Capital. Pumice Capital is the industry-renowned Day Trade Whampoa Military Academy, with more than 200 traders, and Yang is one of only two fund managers in Pumice. Not only that, Yang Jiadong himself in Baidu, Shanda, Tencent engaged in technical work line, pumped stone capital so far the use of centralized stock trading system is developed by Yang Jiadong himself.n
In terms of technical dimension, there are two core members in the plan and one is Zhang Xiaodong. He has worked in various well-known companies including Nokia, Huawei, Aliyun, Alipay and Lynx. . This year, the total turnover of Taobao Double Eleven Event reached 168.2 billion yuan, of which the Convergence and Recklessness Contribution contributed nearly half of the transaction volume. Zhang Xiaodong is one of the chief technical officers responsible for the operation of the Double Eleven Program. Another is Tao Junjie, who is also a founder of Ali, 13 years began to contact the blockchain, and embarked on the blockchain development path, with rich experience in the development of blockchain project, is currently one of the few , Has a rich block chain backbone development experience in operating the architect.n
From the operational point of view, there are two female side map, one is Liu Han, from Tsinghua to Yale to Oxford academic qualifications to hang the road so that Xiaobian admired. Another is Shi Yunting, a bachelor of City University of Hong Kong and a Columbia University master’s degree, with math, computer, finance, statistics and other professional degree, really make Xiaobian feel embarrassed.n
The team’s ability map matches the demand direction of the project very well, but as Fang Fang founder Liang Bin said:n
n”The secondary market price is not the most important, the project rating is not the most important, the most important is the talented person .There are too few backbone talents in all aspects of the plan, but also constantly looking for, digging, recruit, is it possible to really Lost a stone in the $ 483trn OTC derivatives market to create waves and enjoy the future. “n
nFinally, it is an excellent way to refer to the series “Letters of Founders of Factories”. Whether it is a project on the opposite party or the founder’s thinking is an excellent channel of understanding.n

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