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May 7, 2018
Frederick Innovative Technology Center, Inc. Success Story: Decentralized Derivatives Association Earns Ethereum Foundation Grant
Ethereum, a leader in the burgeoning crypto
currency market, awarded Frederick-based start-up Decentralized Derivatives
Association (DDA) a $100K grant for research and development. DDA was invited
to apply just two months after its establishment in October 2017, based on beta
market response to its software’s end-user experience. Only 11 companies
worldwide won one of these inaugural Ethereum Foundation grants. Decision
makers evaluated scalability, usefulness and security. Ethereum also awarded
two “Hackternships” (10-week paid externships). Ethereum started in 2014.
A derivative is defined by Investsopedia as “a
financial security with a value that is reliant upon, or derived from, an
underlying asset.” The derivative is a contract between two or more parties
based upon the asset, most commonly stocks, bonds, commodities, currencies,
interest rates and market indexes.
DDA is a smart contract-creation service for
risk management tools and derivatives on public blockchains. The company is
revolutionizing the derivatives space and creating a world where risk can be
transferred with no intermediaries. DDA uses a token-less, decentralized
derivatives network and helps construct open source derivative contracts to
serve as the backbone of the new financial system.
“This field is so dynamic. It’s very engaging
and exciting,” says Fett, DDA CEO. Fett is a former federal regulator with the
Commodity Futures Trading Commission (CFTC). He says the experience gives him a
unique perspective on creating solutions that are “transparent, portable and
completely decentralized for trading and hedging any risk.” He explains the
current model as cumbersome and costly by comparison. In addition to financial
support, Fett says feedback and input from Ethereum’s founders is invaluable.
The grant allows Fett to research, refine DDA’s software and expand collaborative
partnerships.
“Every step of the process can have
intermediaries taking their cut and introducing risk. These extra steps
increase the chances of another financial crisis or loss of customer funds. Our
platform is poised to streamline that model by taking intermediaries out of the
process.” Because Fett’s work is open sourced, other companies will be able to
build on his products, improving the overall exchange system.
Fett’s office is at the Frederick Innovative
Technology Center Inc. (FITCI). He participates with their Strategic Growth and
Advisory group. FITCI CEO Kathie Callahan Brady is impressed with DDA’s takeoff
speed. Callahan Brady says, “This is unique among start-ups, to be recognized
by a major industry leader so early in the business process. It speaks volumes
about Nick’s personal drive and experience, as well as his game-changing idea.
This is the beginning of a paradigm shift that could affect the very nature of
investing.”
Fett explains, “Imagine trading stock or
buying a house, even setting up a supply chain management system, without any
middlemen. Everything can be automated on a smart contract.”
Fett leads a monthly crypto currency meet-up
and happy hour at FITCI that is open to anyone. It includes a presentation and
time for questions. Fett shares a note of caution, too, “Even market
professionals are still learning and fine-tuning this technology. It will
evolve with us.”
For more information on Decentralized
Derivatives Association or the next monthly meet up, visit http://www.decentralizedderivatives.org or
reach out at info(at)decentralizedderivatives.org.
