Diamonds have the potential to become the next asset class. This white paper addresses how CEDEX intends to bridge the gap between the current diamond ecosystem and the developing financial markets. After presenting the difficulties and obstacles unique to the diamond ecosystem, we will present four layers of developments and innovations marking CEDEX as the future global exchange for investment in diamonds. In contrast to other commodities, such as gold, it is difficult to achieve uniform pricing characteristics for diamonds since they are not fungible. One carat of diamonds is not equal to another carat due to many countless combinations of characteristics.
Furthermore, the diamond market is missing liquidity. While one can buy diamonds at retail, it is a challenge to resell them at a reasonable market price. Since diamond exchanges operate on a business-to-business (B2B) basis, they are not relevant for traders and, in fact, there is no platform for reselling diamonds. This white paper outlines how we aim to bridge the gap between the current diamond ecosystem and the future diamond investment market through a Diamond Digital Certificate process that will transform diamonds from a unique asset to a fungible asset with clearly defined values. In addition, we present a corresponding trading platform that will provide a two-sided market in which traders will be able to trade and liquidate their diamond holdings. We present and discuss the advantages of the CEDEX platform, the mechanisms to achieve fungibility for diamond trading, the process necessary to create diamond market value transparency and, finally, the blockchain-based CEDEX diamond-trading platform.
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Cedex
