Crypto Depositary Receipts

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A system of depositary smart contracts that connects various ecosystems for the transfer of assets by automatically issuing and redeeming cryptographic depositary receipts.

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Dozens of crypto platforms already have their own ecosystems, consisting of many interconnected projects. These projects can themselves be interesting objects for investment. Moreover, in the interests of developing crypto platforms, it is necessary to attract investments specifically in crypto projects, and not in native cryptocurrency. Excessive speculative interest in the currency leads, on the contrary, to negative consequences for the projects developed on this cryptoplatform. An analogy with states and their national monetary systems is appropriate here. In crypto platforms, the same isolation can be traced, but not caused by monetary policy, but by technological barriers. This complicates the flow of capital and creates an unnecessary imbalance between real projects and the money supply. Many platforms are actively developing their own decentralized exchanges for the flow of capital within the ecosystem, but the central gateways that ensure the movement of capital between crypto ecosystems are centralized exchanges.

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We suggest using a long-established and popular mechanism - depositary receipts. Usually, these receipts are issued in jurisdictions popular with investors, circulated in the relevant market and are convenient for acquisition by local investors. Moreover, these receipts give the right to receive the corresponding original shares of the issuing company. In cryptoeconomics, the project’s tokens are the main asset; accordingly, the smart contracts ensures the automatic creation of receipts - tokens in new crypto platforms with the possibility of obtaining original tokens upon presentation of the receipt.

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The basic scheme of the service is quite simple: a couple of smart contracts deposit (or issue) a token (depository receipt). Upon receipt of the token and address for the issuance of the depository receipt, the smart contract forms a list of addresses eligible to receive the issue of the receipt. A smart contract that mirrors him, when contacting the applicant from a list of authorized addresses, issues a receipt. This operation is repeated in the reverse order upon presentation of a receipt for repayment. An important aspect is ensuring the same amount of rights as the holder of the original token, which requires additional development of individual rules for the issuance and circulation of depositary receipts for each token.

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This solution is potentially capable of creating a huge amount of economic ties between different ecosystems. This can increase the sustainability of the industry as a whole and reduce dependence on centralized exchanges. In addition, it is very important to drastically reduce the chain from development teams to investors. This will help develop a market for investments and support for interesting projects aimed at the real adoption of technology.

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