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Legal smart contracts for derivative trading in mining

Part of: Distributed Ledger Technologies: Papers Arising from Three Australian Symposia

Published online by Cambridge University Press:  19 March 2020

Julian Adam Wise Open the ORCID record for Julian Adam Wise [Opens in a new window] ,
Meng Chak Chan ,
Dihon Tadic ,
Stephanie Miles ,
Jack Cornish ,
Ewan Sellers ,
David Brenecki ,
Isaac Dzakpata  and
Barti Murugesan
Julian Adam Wise
Affiliation:
RMIT University, Melbourne, Australia, e-mail: [email protected]
Meng Chak Chan
Affiliation:
RMIT University, Melbourne, Australia, e-mail: [email protected]
Dihon Tadic
Affiliation:
Mining3, Brisbane, Australia, e-mail: [email protected]
Stephanie Miles
Affiliation:
RMIT University, Melbourne, Australia, e-mail: [email protected]
Jack Cornish
Affiliation:
RMIT University, Melbourne, Australia, e-mail: [email protected]
Ewan Sellers
Affiliation:
Mining3, Brisbane, Australia, e-mail: [email protected]
David Brenecki
Affiliation:
RMIT University. Melbourne, Australia, e-mail: [email protected]
Isaac Dzakpata
Affiliation:
Mining3, Brisbane, Australia, e-mail: [email protected]
Barti Murugesan
Affiliation:
RMIT University, Melbourne, Australia, e-mail: [email protected]
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Abstract

This research demonstrates financial derivative trade of unprocessed materials, for the mining industry through legal smart contracts. Within the mining supply chain, a stock of mined resources can reside in a mineral stockpile for over twenty years without gaining financial interest and without undergoing the mineral extraction process to derive value from the asset. This research elaborates on a blockchain solution implemented to increase miners’ short-term cash flow for business operations through the issuance of derivative assets on mineral stockpiles which can be traded through legally binding smart contracts. The system is the first to enable mining companies’ access to the underlying asset’s value earlier in the production lifecycle through smart contract technology whilst providing hedge funds with access to new financial products for investment portfolios.

Type
Research Article
Information
The Knowledge Engineering Review , Volume 35 , 2020 , e10
Copyright
© Cambridge University Press 2020

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