Firmo is an infrastructure play developing a sidechain that is designed to deliver financial tools like derivatives to the crypto economy. They envision a world in which cryptocurrency traders can engage and both short- and long-term transactions via “financial contracts [that] are secure and enforceable without the need for third parties,” according to Firmo’s blog.
Deriviatve issuance is a huge market in traditional finance, but for the most part it has yet to make its way to cryptocurrencies. The issuance and use of derivatives among institutional investors are lacking in the cryptocurrency economy amid a lack of security surrounding smart contracts on Ethereum’s Solidity for these complex financial instruments. Firmo has its own programming language dubbed FirmoLang that seeks to solve this issue, promising the secure execution of smart contracts across major blockchains like Ethereum.
While crypto derivatives are a key use case, they’re not the only one, as the Firmo platform could also be used for the delivery of peer-to-peer contracts and prediction markets like Augur. Firmo is also in discussion with other major networks including NEO, Cardano and others.
Firmo’s flagship product is its FirmoLang software, which is a language in which developers write derivatives contracts to slash the rate of errors surrounding “automated contracts on decentralized” platforms. The product is blockchain-agnostic and functions across both public and private blockchains.
In its marketing material, Firmo says it envisions a world where “assets are traded seamlessly between blockchains,” pointing to their FirmoLang product that will be integrated on a seemingly yet-to-be developed sidechain. “With Firmo Chain, anyone will be able to securely execute financial instruments with tokens on any blockchain,” according to the website.
It appears to be early days for the Firmo Network, one in which they are inviting developers to collaborate on. Firmo illustrates the process as flowing from “handshake” to “Firmo smart contract” to “transaction” via Ethereum. Firmo outlines a trio of use cases in its technical paper across the forward contract, European vanilla option and the vanilla interest rate swap. They also target “decentralized futures market contracts, multiple cryptocurrency swaps, conditions-based crypto-asset hedging [and] over-the-counter derivatives.”
Security -- Firmo’s FirmoLang langugage boasts features like formal verification that provide the “same level of security used to make sure planes, trains and satellites operate securely.” 2.) Intuitive -- Firmo offers templates for creating financial contracts that simplify the process for developers. 3.) Versatile -- Firmo is blockchain-agnostic and boasts an API that make it amenable to trading platforms or other products.
Firmo points to Bancor as an early adopter of its protocol layer to provide “the ability to construct automated financial contracts that are enforceable without the need for trusted third parties.”
The Firmo protocol is a tool for developers to write smart contracts for cryptocurrency-fueled derivative products. Firmo is also targeting exchanges and liquidity markets like Bancor, which is already in partnership with Firmo.