For centuries diamonds have been one of our most valued and sought after natural resources. Primarily fuelled by the demand for luxury items, diamonds have proven to retain their value irrespective of economic circumstances or turmoil. Over time, the trading followed a trend: Sellers inhabited an area where diamond mining was prevalent and would travel to other countries to make sales. When the mines ran out of natural diamond resources, the merchants would move on.
In the late 1800’s the dominance of De Beers began to emerge into what became a monopoly of diamond mining and sales. At their height, they controlled an astounding 90% of the world’s diamond production. While that has dwindled to roughly 40%, they still maintain an enormous impact on diamond pricing today.
With technology selling became more advanced, yet up until today, the trading of diamonds was restricted to diamond dealers only. An astonishing 95% of the world’s global diamond market is retail demand. With just a mere 5% being used for investment purposes, the question became: “What is preventing the public from trading in diamonds?”. The answer comes in the form of these stumbling blocks:
- B2B exchanges only
Up until now, diamond exchanges have been restricted to business to business models which effectively exclude the public.
- Liquidity of public trading
Investors who were not dealers were often limited to purchasing at retail prices. Despite their investment increasing in value, the prospects of selling and receiving a fair price were slim.
- Uniqueness of the asset class
Due to the dizzying amount of characteristics each diamond has, uniform pricing was all but impossible.
The potential of diamonds as an investment is undeniable. They have held their intrinsic value throughout history and the demand has always outstripped the supply. In fact, by 2022 it is predicted that the global demand for diamonds will exceed the supply by over 40 million carats.
These projections don’t even adequately account for further contributing factors such as the emerging middle class in China and India. For the public to be excluded from this lucrative asset trading seems archaic.
One firm out to change all of that and re-invent the industry is CEDEX. Using ground-breaking technology, CEDEX is a blockchain based diamond exchange designed to integrate the current diamond and crypto-financial markets. Founded by a diverse team of specialists, CEDEX is majority owned (90%) by Techfinancials, a public company listed on the London Stock Exchange. With its intricate knowledge of technology, the diamond trade and financial markets, CEDEX has built a transparent blockchain based platform on which anyone can trade.
Further solidifying their infrastructure, CEDEX recently announced a co-operative partnership with IDEX, the world’s largest online diamond exchange.
With thousands of registered and active diamond professionals, IDEX are not only industry leaders in diamond pricing but have a vast supply chain inventory. “We believe that the diamond industry stands to gain by connecting with CEDEX B2C offerings, vision, and trading models. The integration into the financial world and the transformation of diamonds into a new financial asset class have been a key driving force behind IDEX’s activity since the company’s establishment. Joining forces with CEDEX enables us to better serve our diamond suppliers and traders” stated Founder and Chairman of IDEX Online Ehud Cohen.
Under the agreement, IDEX will share both its diamond knowledge and real-time diamond prices for use on the CEDEX exchange. IDEX will also be able to utilize CEDEX technology to better facilitate investments in its professional ecosystem. This symbiotic relationship creates new opportunities for both exchanges, enabling methodological advice and growth. Specifically, for CEDEX the liquidity of its new exchange should be all but guaranteed with the support of IDEX.
How does CEDEX work? CEDEX is driven by a self-learning algorithm called DEX. This proprietary software is what enables the combining of the diamond and crypto-financial markets. DEX’s artificial neural network makes optimal use of all diamond data given. It stores and analyses the gemmological composition of each diamond listed on CEDEX, together with financial indices of the diamond market and global inventory. This technology is a crucial factor in opening up trading to the public as it ensures that no previous experience is necessary before trading on CEDEX. On the exchange, DEX will list the diamonds in categories and within each category will rate the investment potential of each offering from best to worst. This eliminates guesswork for traders who are not familiar with the diamond industry.
Only GIA (Gemmological Institute of America) diamonds are accepted, ensuring accurate pricing. For users wishing to sell diamond assets on CEDEX, the process is simple:
A preliminary valuation of the sellers GIA certified diamond assets is done online. The diamonds are then transported to a custodian where they are physically validated against their GIA certificate. After approval, a smart contract (Diamond token) is created. The seller then has the option to either list his token on the exchange or sell directly peer to peer. Only CEDEX Coins can be used for transactions.
The CEDEX Coin is ERC-20 compatible and will be traded over the Ethereum network. The coin will be listed on all major exchanges and transferable to any fiat or crypto currency. Pre-sale registration is available on www.cedex.com/, with bonuses available for those making use of the Pre-sale (January 12th 2018). Coins are initially valued at 1ETH and the minimum purchase is one coin, while there is no maximum purchase. Once the official Initial Coin Offering is completed, if any of the offered coins remain unsold, they will be burnt. The funds from the I.C.O will not only be used to both strengthen the platform, but also to purchase initial inventory to give the market a kick-start.
CEDEX is an intriguing investment proposition on two fronts. Firstly, the possibility of trading in a provenly viable asset class and secondly the CEDEX Coin itself. With the ever-uncertain turmoil in traditional financial markets, this offering will no doubt appeal to many looking to either hedge against currency or trade in something tangible.
A demo of this exciting technology is available here.