Below is a list of some additional features that may be added to Darkchain in future.

Secondary Liquidity Marketplace

There is one fundamentally inherent risk in Darkwood Capital’s business model that many steps have been taken to mitigate against through liability insurance and counterparty risk management, and that is the lack of liquidity in NFT holdings NFT securities are analogous to a piece of art that one would purchase at an auction. It acts as a store of value and appreciation over a long term period, but is challenging to sell in order to realize a return on initial investment.

As a an additional use case beyond hand coding and deploying NFT smart contracts, the Darkchain will one day hold the ability to act as a decentralized marketplace for fractionalized NFT smart contracts that can be bought in sold as one would an S & P 500 stock. This will afford investors with shorter time horizons and scalp traders the ability to make smaller and more decisive market moves using NFT securities that can allow them to integrate higher degrees of liquidity in the market while simultaneously expediting the time required to generate alpha and realize returns using NFTs.

Many DEFI projects have built this into their business model through staking and liquidity farming, but have neglected other important factors in investing such as gas fee reduction, service and management and liability protection. We are focusing on acting as a full service brokerage that can manage larger investment allocations but will one day integrate liquidity to accommodate other forms of investing.

Many new crypto and NFT projects also strive to ultimately become Decentralized Autonomous Organizations (DAOs) through the use of liquidity bearing smart contracts. This is an idealistic view on financial management and highly likely to not be systemically stable or sustainable by any measure. Darkwood will always maintain a centralized component over Darkchain in order to ensure that users are continuously cared for and assured of the safety of their investments.


Transactional Modelling

The per-­output transactional model used in cryptocurrency ensures the creation of transactions in which two (or more) parties exchange some assets safely. The blockchain treats this transaction as it would a zero-sum game, meaning that it either succeeds or fails as a whole, so there is no risk of one party losing their asset without receiving the corresponding asset from the other side. This is the equivalent of delivery­ versus ­payment in the world of traditional financial settlement.

For instance, consider a simple two­way exchange between $25 belonging to David and $15 belonging to James. The exchange is performed in a transaction with two inputs and two outputs. The first input comes from David and contains her $25, while the second input comes from James and contains his $20. The first output goes to David and contains $20, while the second output goes to James and contains $25. As discussed earlier, Darkchain enables these asset values to be encoded directly into transaction outputs, so the match between input and output quantities is verified by every node in the network. Assuming the transaction is valid and properly signed by both David and James, it will be propagated and accepted onto the blockchain.

Unfortunately, the process of constructing such a peer­to­peer exchange transaction is materially difficult and requires the following steps:

  1. David and James discover each other’s mutual willingness to perform the exchange through an off­blockchain process, and agree on the transaction outputs they will
  2. David’s node constructs the full transaction and signs
  3. David transmits the partially signed transaction to James via another off­blockchain process, since this incomplete transaction will not be accepted by the
  4. James receives the transaction and verifies that it accords with their agreement. If so, his node signs the transaction as well. At this point the transaction is
  5. James’ node transmits the fully signed transaction to the network which verifies it and confirms it on the

This process contains two steps which take place outside of the network – first, for David and James to find each other and second, to send the partially signed transaction from David to James27.

A future version of Darkchain can streamline this process by enabling partial transactions to be directly propagated across the network. Such partial transactions represent an offer for exchange, which any party can accept by completing the transaction and transmitting it for inclusion in the blockchain. Fortunately this doesn’t require any significant changes to bitcoin’s transactional model and signing process, since bitcoin already has a method for users to create and sign a partial transaction, allowing the content of other inputs and outputs to be changed28.

We can see how this works in practice by following the example above. First, David’s Darkchain node constructs a transaction in which the first input comes from David with $15, and the first output goes to David containing £10. This transaction also contains a second input and output, which are left as empty placeholders. David’s node signs the first input and output of this partial transaction in order to render this part valid. This partial transaction will not be accepted onto the blockchain, due

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