What are SmartPiggies?

SmartPiggies are non-fungible digital contracts that provide their owners with protection against undesirable changes in the price of any asset, product, or service. In traditional finance terms, SmartPiggies could be compared to a capped option.

 

A SmartPiggy can be thought of as a tradable digital piggy bank into which money can be deposited, and which is smart enough to distribute its funds between an owner and creator based on pre-agreed terms.

 

SmartPiggies also have a native self-auctioning mechanism that allows them to globally market themselves, eliminating the need for exchanges.

 

Anyone or any business wishing to protect themselves against unexpected changes in price or who has spare capital and is willing to take on risk in exchange for a premium may wish to participate in the SmartPiggies ecosystem.

SmartPiggies

An open source standard for a free peer to peer global derivatives market.

Why Now?

Five years ago the Ethereum whitepaper promised a smart contract platform that would allow for complex peer-to-peer financial contracts without intermediaries.

 

The simplest, most obvious peer to peer financial contract would be an option. Aside from the two counterparties themselves, the only absolute external dependency is a price feed.  So why is it that five years later Ethereum is not hosting a thriving options market?

 

Our thesis is that it was just a matter of time. It took 5 years for the Ethereum community to gather the technological knowledge, awareness, best practices, and infrastructure before something like SmartPiggies could exist.

 

SmartPiggies is a combination of recent trends and innovations in Non-Fungible Token standards, Oracles, and Stable Tokens.

 

Three important observations are:

 

  • Today, the current units of account in the real world are fiat currencies. Stable tokens are a critical ingredient for creating financial contracts on Ethereum that have real-world economic utility. In late 2018 it became clear that Ethereum has garnered enough broad awareness and acceptance that multiple reputable companies have started to issue stable tokens on Ethereum.

 

  • Peer-to-peer options smart contacts are perfectly suited to being Non-Fungible Tokens. Options contracts are fundamentally highly parameterized two-counterparty transferable legal agreements. In the world of traditional finance a great deal of effort and cost is expended to ensure those legal agreements are accounted for and fulfilled. With SmartPiggies almost all of that cost and effort falls away.

 

  • The mechanics of traditional options and SmartPiggies are virtually the same. One is executed on a legal framework and the other is executed on a decentralized framework. An argument can be made that SmartPiggies and traditional options are fundamentally equivalent abstractions and the tradeoffs between the platforms are straightforward.

What We Did...

We asked ourselves, given the state of Ethereum, all of the available knowledge, best practices, and infrastructure, what should these SmartPiggies look like? What could they be made to do safely? What special properties would they have? What would the risks be? How would they exist in the world going forward?


Everything we thought would be relevant to SmartPiggies in design, function, and consequences we explored to the best of our ability in the PinkPaper.  


We are actively working on both the PinkPaper and an MVP. Check out our Github! We welcome feedback!

Team

We are long time cryptocurrency enthusiasts. We know each other from the countless New York City crypto related events we have attended together over the years, Bitdevs in particular. For us, SmartPiggies is a passion project. SmartPiggies is something that struck us as the most basic, obvious, real economic use case for an open decentralized financial network that could exist today but doesn't. So, over drinks one night, we decided that this is something we have the right skill set to do and if no one else is going to do it, then we should do it.

Not for profit. Just for fun.

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Michael Arief

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Toby Algya

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Alexander Lee