Enigma Catalyst is a machine-based investing platform built for crypto-assets. Find out everything you need to know about the unique platform today in our review.
What Is Enigma Catalyst?
Catalyst, found online at Enigma.co, is an investing platform combined with an off-chain decentralized exchange protocol. The platform was created by an MIT-bred company called Enigma. The developers claim to have created “the first investment platform focused on enabling developers to build, text, and exercise micro crypto-funds.”
The long-term goal of Enigma Catalyst – also known simply as Catalyst – is to create a marketplace of trading strategies where average investors can purchase strategies that match with their investment goals.
In other words, Enigma Catalyst wants to make it easy for developers to create trading robots and cryptocurrency funds, and then allow other users to emulate their success by purchasing funds/robots through an open marketplace.
The idea for Enigma Catalyst began by watching the rise in popularity of hedge funds over the years. The developers also saw the rise of cryptocurrency, and realized there was an opportunity for algorithmic crypto-asset trading. Enigma Catalyst aims to facilitate the development of those algorithms – similar to the RESTful API, but with several important benefits.
What Problems Does Enigma Catalyst Seek To Solve?
Obviously, there’s always going to be a market for algorithms and robots that can reliably make a profit for investors.
However, we already have exchanges where users can develop robots. Many cryptocurrency exchanges allow users to place orders through the RESTful API, for example, which allows users to run their own trading algorithms. What advantages does Enigma Catalyst have over RESTful API exchanges?
Enigma Catalyst specifically mentions this in their whitepaper. The advantage is that their platform makes it easier and more accessible to create funds and algorithms – even if you have limited technical experience.
As the whitepaper explains,
“Traders are currently forced to develop the infrastructure for development, testing, and deployment of their trading strategies. These systems involve an inordinate amount of complexity, data curation, and otherwise impose a significant barrier to safely begin experimentation with algorithmic trading of crypto-currencies.”
Another issue is that traders are forced to relinquish custody of their funds to an exchange to participate in trading, which violates a central advantage of cryptocurrencies: strong ownership and decentralization.
Catalyst plans to solve these problems in novel ways.
How Does Enigma Catalyst Work?
Catalyst is a decentralized exchange protocol that supports cross-chain atomic swaps. The company’s solution can operate as an extension of existing off-chain payment networks built on bidirectional payment channels and hashed timelock contracts (HTLCs), such as the Lightning or proposed Raiden network.
Using this design, Catalyst allows users to make fast, cross-chain transfers without relinquishing control of their assets.
Catalyst’s orderbooks are maintained by a permissionless network of liquidity providers. Each provider spans multiple, individual payment networks. To start trading, users open payment channels with their chosen liquidity provider in the currencies in which they wish to trade. Orders are submitted to the liquidity provider that the trader chooses, then matched with an online counterparty. Assets are then exchanged atomically by executing a single, cross-chain payment, routed through the liquidity provider.
Ultimately, that means Catalyst allows for scalable, custodian-free trading.
In layman’s terms, Catalyst allows users to trade assets seamlessly without giving up their assets to an exchange. Users don’t need to trust anyone with their funds – the exchange is facilitated in a trustless manner.
Through this seamless system, Catalyst makes it easy for developers to test and execute their strategies. In turn, investors can choose which micro-funds they wish to invest in based on performance.
Catalyst aims to introduce all of the following features to the cryptocurrency industry:
One Stop Shop For Quants
Catalyst has a free, open source Python SDK that can be used locally or over a web-based IDE. Traders can use this SDK to quickly design, test, and master winning trading strategies. Then, when you’re ready, you can start live-trading and open your trading strategy to outside investors.
Catalyst’s data marketplace is built to support the blockchain ecosystem. Through the marketplace, users can get market, network sentiment, and ICO data from a single source. Users are encouraged to curate data sets in exchange for incentives.
Invest in winning strategies with a proven track record – even if you don’t have the skills or time to create your own algorithms. Developers can prove they can create successful algorithms and attract investments from peers.
Cross-Chain Atomic Swaps
Catalyst facilitates the instant, trustless exchange of crypto-assets between any number of off-chain payment networks.
Full Custody Of Assets
You never relinquish custody to the exchange, or to any intermediary. You maintain full control of your assets at all times, while still enjoying algorithmic trading.
Off-chain payments allow settlements to happen in the order of milliseconds, which means higher trading velocities and greater market liquidity.
Ultimately, Enigma’s Catalyst is distinguished from RESTful API exchanges because it allows users to test and develop cryptocurrency strategies, then implement those strategies without the need for a trusted third party – like an exchange. Enigma has already released an alpha build of their platform.
Who’s Behind Enigma?
Catalyst was created by a company called Enigma. Enigma is described as “an MIT-bred team of experts, backed by top-tier investors.”
Key members of the team include Guy Zyskind (Co-Founder and CEO) and Can Kisagun (Co-Founder and CPO). Notable investors include Floodgate, Flybridge Capital Partners, Converge, Digital Currency Group, and MIT.
The Catalyst ICO
Enigma has announced its Catalyst ICO for mid-August. During the ICO, investors can purchase ECAT tokens. There will be a fixed supply of 100 million tokens. 50% will be made available in the initial token sale; 30% will be retained as incentives for the Catalyst community, 10% will be distributed to the Enigma team and advisors, while 10% will be retained by Enigma.
Enigma hasn’t announced a specific date for the ICO as of yet. However, they’re planning it for “mid-August”.
Enigma Catalyst Conclusion
Enigma Catalyst is a marketplace and investment platform where users can build and test micro-funds in a seamless, trustless, decentralized trading environment. The platform makes it easier for users to create and manage micro-funds. Meanwhile, investors can pick micro-funds they wish to invest in, based on the performance of that micro-fund over time.
Catalyst is yet another example of how the investment tools around the cryptocurrency industry continue to expand. As cryptocurrencies become more mainstream, they’re becoming a more and more valid investment vehicle for users – and platforms like Enigma Catalyst are helping to push the industry forward.
Enigma has announced its Catalyst token sale for August 2017. Stay tuned for more information as the token sale begins in mid-August (an exact date has not yet been announced).