The Case for Commodities As An Asset Class: How COMDEX is Reimagining It
The economic policies of the last decade, pandemic-induced supply shortages for consumer goods, and the sudden increase in circulating supplies of currencies, all of these factors culminated into one thing — inflation. In fact, the U.S. inflation rate is at its highest in nearly 40 years, touching 6.8% last year. Even the global inflation rates rose from 3.18% in 2020 to 4.35% in 2021, resulting in price rises like never before.
Beating this rising inflation with merely money market or savings account returns has now become nearly next to impossible for investors. They’re now on the lookout for an investment option that is not only more concrete in times of economic uncertainties but also provides reliable returns, enough to beat inflation. Here, commodities as an asset class present an interesting value proposition to these investors.
Commodity is one of the few asset classes that is positively correlated with inflation. Inflation naturally drives a rise in prices of commodities and this makes the asset class an excellent portfolio hedge for investors looking to beat inflation. In this regard, Comdex, a blockchain based Decentralized Synthetics protocol built on the Cosmos Ecosystem is now paving the way for investors across the globe to easily get in on the commodities market and its recently announced web application is a major stride in that direction.
Democratizing Commodities on the Blockchain
As the name suggests, Comdex is a commodities focused decentralized synthetics protocol, built on our own IBC enabled sovereign chain encompassing a suite of solutions including the Decentralized Synthetics Exchange platform which is built using the Cosmos SDK. and aims to democratize the commodities market. By its very nature, the global commodities market has been quite restricted and not very accessible to everyday investors. These high-entry barriers, in a sense, caused everyday investors to miss out on an excellent opportunity at hand. And this is exactly what COMDEX has set out to change.
As a decentralized exchange for synthetic commodities, COMDEX is bringing the commodities market on-chain to make it easily accessible for investors across the globe. On this platform, all the major commodity assets are represented as synthetics (tokenized derivatives), allowing users to benefit from their price movements without actually owning the asset. Moreover, commodities are less volatile when compared to cryptocurrencies. So, COMDEX provides an excellent opportunity for crypto investors to diversify their portfolios by investing in a market with less risk exposure and formidable gains.
To take this a step further and make commodities fully accessible for global investors, COMDEX has recently announced the V1 of its web application. This application is poised to uniquely benefit traders, minters, stakers, and liquidity providers of COMDEX, allowing them to navigate the network with ease. It seamlessly connects to various products of the COMDEX ecosystem, allowing users to buy, sell, and swap commodity synthetics as cAsset tokens, create collateralized debt positions, participate in platform governance, and also try their hand at yield farming. The main dashboard of this web application is designed to keep users updated with information like TVL, circulating supply, total collateral, total liquidity, and CMDX token price. Set to launch in early February, the COMDEX web app could prove to be a valuable resource for investors looking to diversify their portfolio with ease.
In addition to the decentralized exchange and web app, the COMDEX ecosystem is also building ShipFi, to bridge the evident gap between CeFi and DeFi. The ShipFi platform taps into the traditional debt market and allows for the tokenization of real-world debt in exchange for highly trusted stablecoins. All of this in an effort to make highly valuable asset classes accessible to everyday investors.
Taking the Middle Ground
In the past couple of years, the world witnessed a rise in the number of investors who are looking to do away with traditional methods of investing for something with higher value and returns. Coincidentally, the DeFi industry is also going through a transformative phase, trying to cater to investors with varying risk appetites. In this situation, COMDEX as a platform sits right at the middle of the equation, offering better investment options for users while also significantly reducing the volatility and risk associated with digital assets. As such, this platform could prove to be pivotal for DeFi’s growth in the coming years.
