DMG Blockchain Solutions (TSXV:DMGI) opened access to the Bosonic Network for Terra Pool members today.
The Terra Pool are a group of cryptocurrency miners using only renewable sources of electricity to fulfill their mining objectives. Bosonic eliminates counterparty risk through something called decentralized Financial Market Infrastructure (dFMI). In dFMI, digital assets are held by regulated custodians and not the exchanges.
Counterparty risk is the probability that the other party in an investment, purchase agreement, credit lending situation, or trading transaction will not meet their part of the idea and default on contractual obligations. Bosonic performs real-time clearing and settlement against assets held at the custodian by clients and exchanges, thereby eliminating the risk of loss or frozen withdrawals.
“Bosonic has spent the last seven years building a platform for trading digital assets to protect clients, successfully utilizing blockchain technology to eliminate counterparty risk. Recent events represent a watershed moment towards the mainstreaming of the Bosonic dFMI approach,” said Rosario Ingariola, Bosonic’s CEO.
This particular issue has come to the fore due to the ongoing implosion of the FTX cryptocurrency exchange. At its height, FTX had one million users and was the third largest cryptocurrency exchange by volume. It filed for chapter 11 bankruptcy proceedings following a liquidity crisis on November 11.
The details of the crisis are still unfolding, but what’s been revealed thus far suggests severe mismanagement, which along with counterparty risk, has proven to be the largest risks in dealing with unregulated cryptocurrency exchanges.
Read more: DMG Blockchain and the debut of decentralized financial market infrastructure
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The Bosonic Network avoids many cryptocurrency pitfalls
Bosonic eliminates both by allowing its users to manage their own investments with complete custodial control. Part of FTX’s mismanagement involved lending funds on the exchange to a firm owned by the CEO, Alameda Research. Alameda defaulted on the loan and filed for bankruptcy at the same time as FTX. Bosonic’s platform keeps funds locked in an account owned directly by the user, instead of a more fluid, traditional banking structure used by many exchanges.
DMG is offering Terra Pool members access to Bosonic Network with Prime Trust as custodian via its blockseer portal. Onboarding to Prime Trust requires know your customer and anti-money laundering (KYC/AML) monitoring and checks.
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