Cardano’s Frederik Gregaard Says Blockchain Will Stop GME Showdowns

Cardano’s Frederik Gregaard, the CEO of Foundation believes that an improved blockchain infrastructure for capital markets will stop GME-style showdowns as we are reading more in today’s Cardano news.

The recent GameStop saga sparked plenty of blockchain commentators to step in and try to redirect the attention to their bets on the overhaul of the financial sector. Cardano’s Frederik Gregaard tried to shift the conversation away from the heated arguments over the balance of forces, tactics, and rules of the game in the recent showdown between the hedge fund investors and the little guy as well as the involvement of Robinhood and regulators.

Some participants on the market saw themselves as quasi-insurgents and trolled the system by using their own tools. Many criticized their strategy and narrative on the political ground while Gregaard focused on technology, rationalization, transparency, and more as the real answer to the system’s bad sides. His take tries to appeal to the cynicism that was expressed by Redditors and to the self-interest of institutional and systematic actors themselves.

Some participants in the meme-stock frenzy saw themselves as quasi-insurgents, trolling the system using its own tools. While many have criticized their strategy and narrative on political grounds, Gregaard focuses instead on technology, transparency, and rationalization as the answer to the system’s ills. His take attempts both to appeal to the popular cynicism and cunning that was expressed by the redditors, and to the self-interest of institutional and systemic actors themselves.

 “We now know that the real issue which forced Robinhood to set higher margin requirements on certain positions was the intensity of trading activity. This overloaded the capacity of multiple actors across the buying, selling, and settlement process. In turn, this led to a backlog of settlement requests and subsequent liquidity issues for clearing houses.”

With over 1.7B people globally lacking access to #banking infrastructure – #blockchain can help increase financial inclusion. Read our latest blog post on how #Cardano can fast track financial access in emerging economies https://t.co/R0vBQg2TiR

— Cardano Foundation (@CardanoStiftung) January 6, 2021

Gregaard continued that if post-trade processing was carried out using a public blockchain ledger, the issues in the settlement process will be visible on-chain to all market participants and spread information evenly thus providing insight into where the “market inefficiencies” were. He cited that the endorsement of the Big Four auditor PriceWaterHouseCoopers and their statements that the technology could “cut operational complexity and provide a single verified source of myth.”

Gregaard also made the case that efficiency and speed will be improved by choosing a disintermediated system such as the blockchain. Not only will it be more visible to everyday users, but barriers to the instant asset settlement will be removed and the entire process will be more redundant.