On June 6 the MIT Media Lab graduates who created Project Enigma announced a new platform called ‘Catalyst.’ The financial application claims to “empower anyone” to build their own decentralized cryptocurrency hedge fund.
Enigma Project Announces ‘Catalyst’ a Peer-to-Peer and Trustless Hedge Fund Platform
Enigma is a peer-to-peer blockchain encrypted protocol that allows private and encrypted data sharing. The project made headlines in 2015 when it released its beta platform and has received backing from organizations like the Digital Currency Group, Floodgate, MIT, and Converge. The project was named after the Enigma machine, a cipher tool used during World War II. The Enigma project was created by Guy Zyskind, Conner Fromknecht, and Can Kisagun. The Enigma founders say that the project’s core foundations and inspiration come from Bitcoin.
Catalyst aims to enable programmers the ability to build hedge funds with “sophisticated programmatic strategies.” The Enigma team wants ordinary investors to be able to invest directly into these ‘smart-investing’ funds making them accessible for everyone. Centralized cryptocurrency exchanges can stop deposits and withdrawals, and customers can lose funds as well says the team.
“Catalyst is a protocol to bridge existing and future exchanges into a single, decentralized system that is fast, scalable and most importantly — keeps users in control of their funds,” explains Enigma.
Our goal is to disrupt the technology driving exchanges (and crypto-trading in general) in much the same way that the Lightning/Raiden networks are set to disrupt payments.
Catalyst Uses Cross-Chain Atomic Swaps Influenced by Algorithmic Trading Tools
Enigma’s recently published Catalyst white paper goes into great detail on how the platform plans to “leverage the wisdom of the quants for crypto-trading.” Catalyst operates similarly to the Lightning Network or other types of off-chain swaps. The foundations of the platform’s architecture uses cross-chain atomic swaps by using hashed timelock contracts which are influenced by an algorithmic trade manager. The team believes algorithmic trading and machine learning have significantly changed the game for financial investments. With Catalyst, the team believes it can provide a cross-chain protocol that operates in an entirely trustless manner.
“The main goal of our platform is to serve as a one- stop shop for developers (or quantitative traders) who are interested in developing trading strategies that operate in the expanding domain of crypto-markets,” details the Catalyst white paper. “Developers can utilize the myriad of data sources that will be made available through our platform to build their models, back-test them according to historical data, as well as put their strategies to the test in a simulated or real trading environment. Over time, Catalyst will also serve investors without coding skills.”
Our design offers the best of both worlds — a decentralized exchange that is also scalable.
The Future Where Anyone Can Become a Hedge Fund Manager
The Enigma team wants to build an environment where traders can also become hedge fund managers by utilizing the best analytical tools available within the cryptocurrency space. The team has a lot to work on to build a successful data marketplace powered by machine-based investing. However, Enigma says building the massive infrastructure for a platform like this is key to developing a proper machine-based crypto-investment platform.
“[With Catalyst] developers can quickly test and execute their strategies, and investors can, in turn, choose which micro-funds they wish to invest in based on performance,” Enigma adds.
What do you think about the Catalyst concept from the Enigma team? Let us know in the comments below.
Images via Pixabay, the Enigma website and Catalyst white paper.