Code

What does the code do? Source: Derivatives Market

Trading a financial asset involves at least four discrete steps:

• A buyer and a seller must locate each other and agree on a price
• The trade must be cleared (the obligations of each party are specified)
• The trade must be settled (the buyer and seller must deliver the cash or securities necessary to satisfy their obligations within the required timeframe)
• Ownership records are updated

These are the steps that smart contracts seek to automate through blockchain technology, as described in Decentralized Financial Contracts v.1 and with the use of Automated Market Makers.

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