A Blockchain Grand Challenge: Smart Financial Derivatives

Blockchain and distributed ledger technology (DLT) research encompasses use cases ranging from social innovation to banking, and technical developments ranging from cryptography to semantics of legal text. Research in both academia and industry is highly interdisciplinary across domains such as computer science, linguistics, law, cryptography, banking, economics, and social sciences. The growing complexity of blockchain science and use cases, coupled with the interdisciplinary nature of the research, poses new challenges to our community. Research publication plays a key role in supporting this highly interdisciplinary work: supporting the need for rapid and reliable dissemination of preliminary and final results, and the need for longevity of results beyond the end of financial or management support for a research project. Industry teams rarely have subscriptions to academic journals, and an open access journal adds substantial value in supporting the research community. The field is young, with many research challenges to be addressed. One “grand challenge” for our research community is the implementation of high-value, long-lived, financial derivatives transactions running as smart contracts on DLT (“smart financial derivatives”). This is currently being explored by academia, banking practitioners, trade associations and technology vendors, and is driving research across a wide range of research groups, each focusing on a different aspect. What makes this a “grand” challenge is the need for a large number of diverse research problems to be solved simultaneously. The following outlines a few of the major research questions being investigated: some of these are general research problems that affect blockchain/DLT development broadly, whereas others are very specific to financial derivatives, but all of these aspects must be solved, and their solutions combined effectively, to provide efficient and resilient solutions to the grand challenge.