Shruti Appiah, Senior Product Manager at IOHK, Explains how the Cardano Project will Democratize Financial Services

Shruti Appiah, Senior Product Manager at IOHK, an organization focused on the ongoing development of Cardano (ADA) and various other initiatives, notes that when she logs into her stock trading apps to acquire exchange-traded funds (ETFs), she may face issues like the platform not being accessible since it’s offline due to technical issues.

She points out that the rise in the GameStop stock had created problems such as many traders or investors not being able to access trading platforms that were overloaded with many new orders within a very short timeframe.

Appiah claims that we are not going through any financial crisis. She also mentions that she never expected that her bank or brokerage would block her from accessing her own funds without giving a warning. Appiah also reveals that she assumed that it would always be possible for her to easily access her funds, place new trades, and take advantage of potential profits (or losses).

Appiah recalls that (earlier this year) many other stock brokers and trading platforms started  blocking their customers from carrying out trades. Robinhood, for instance, which claims to democratize finance, had prevented its users from purchasing GameStop stock.

Nearly all of us have allowed third-parties to custody our funds, which has also left us at their a discretion to determine if/when those assets may be accessed, Appiah explains. She also notes that the third-party banks and brokers all have a central point of control.

With Robinhood and GameStop, we have all witnessed how this level of centralization results in bad customer service and failure, Appiah noted while adding that the central point of control can be “influenced, attacked, or manipulated by an external self-interested actor, making it the antithesis of democratized finance.”

She also mentions:

“This is the core motivator of decentralized finance …. (DeFi). DeFi offers a similar set of financial tools offered by Wall Street such as lending, escrows, derivatives, swaps, and securities. What makes DeFi platforms stand out is their ability to offer these financial instruments without the need for central market makers, banks, or brokers.”

She further explains:

“Each financial agreement is represented as a smart contract on the blockchain, and is settled algorithmically. Their decentralized nature makes them far more resilient to market manipulation or the failure of a centralized system.”

She reveals that they are developing a suite of Marlowe products to “democratize” finance and enable “easy access to financial agreements.” This reportedly includes Marlowe Run, a product that will lets users easily execute off-the-shelf financial agreements with friends or clients in a secure manner (and also on their own), Appiah revealed.

She also noted that with added automation features and “no need for third-parties,” this peer-to-peer (P2P) solution will be “cost-effective” and will truly democratize finance.

She explained:

“With Marlowe, we aim to democratize finance by facilitating peer-to-peer agreements that run on a blockchain. We seek to empower people to create their own financial instruments and set up agreements with anyone with whom they want to interact. Marlowe will offer a suite of products, each product serving a different function and set of users. Marlowe’s overarching product strategy comprises three streams – Marlowe for developers, Marlowe for end users, and Marlowe for enterprise.”

She also noted that Marlowe for developers includes Marlowe Build and Marlowe Play (also known as the Marlowe Playground) as well as the input to the Marlowe Library. Marlowe Build and Marlowe Play together “enable end-to-end financial smart contract development,” Appiah noted.

She added:

“Developers can compose smart contract code on Marlowe Build. Then, they can perform preliminary iterative design using simulations, and formally verify and test smart contracts on Marlowe Play. These capabilities – paired with a purpose-built domain-specific language (DSL) for finance – ensure that the contracts are easy and straightforward to build, as well as being secure, verifiable, and rigorously tested. Once built and tested, developers may contribute them to our open-source smart contract template library, the Marlowe Library.”

She also mentioned that Marlowe for end users will aim to provide a user-friendly  and seamless interface for users to engage in financial agreements with their friends, colleagues, or clients on the blockchain.

This reportedly includes Marlowe Run and provides access to templates for financial instruments from the Marlowe Library, Appiah added.

She also noted:

“To make financial agreements on the Marlowe Run, the user does not need to know the ins and outs of blockchain, or how to write smart contracts. Every step of the contract is explained in non-technical language, and each action is performed only with the user’s explicit authorization. Our team has built a suite of rigorously tested and verified financial tools including escrows, debt securities, and swaps that can be used on the Marlowe Run. These – and many more verified open-source contracts – are made available through the Marlowe Library.”

Marlowe for enterprise has been designed with the goal to expand decentralized finance beyond individual users, “helping enterprises to access the tangible benefits of smart contracts,” Appiah added while noting that this will include a customizable suite of capabilities and financial agreements that are “tailored to a commercial use case, with the provision of smart contract templates that adopt Algorithmic Contract Types Unified Standards (Actus) for financial contracts.”

Last year, IOHK introduced the Marlowe Playground Alpha which offers the ability to write contracts in JavaScript, Haskell, or directly in Marlowe. This also included proof-of-concept oracles, “with the ability to access external data such as price, directly from a stock market ‘ticker’ or, in the future, data feeds such as Coinbase,” she noted.

She added:

“To support the rollout, we published tutorials to guide developers. We have since been building on this work, continuing to improve the user experience, and building, testing, and validating more smart contract templates.”

She also mentioned:

“As a part of the Goguen rollout, we are now in the process of completing the implementation of Marlowe on Cardano, giving users and organizations the opportunity to execute DeFi contracts they have written themselves or downloaded from a contract repository. Marlowe will run first of all on the Cardano blockchain, but it is blockchain-agnostic so could run on other blockchains to reach an even broader audience in the future.”

Marlowe for end users is expected to go online in stages throughout this year, Appiah noted.

Initially, the prototype of Marlowe Run will be launched which will let users demo and try out their own financial agreements. This will include “a suite of financial smart contract templates that users can customize to their needs,” Appiah added.

She also mentioned that this prototype will let users “explore the experience of making financial agreements in a decentralized fashion, all in a peer-to-peer manner.”

She further explained:

“To use the Marlowe Run prototype, users don’t need to own any real tokens, so they may try the demo before they onboard. This rollout will include a suite of template financial instruments, built by our in-house developers. These templates can be used to execute test agreements on Marlowe Run.”

Appiah confirmed that IOHK is planning webinars on DeFi with Marlowe (beginning June 3, 2021). Interested parties may register through their official website. (Note: to learn more, check here.)


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