The world’s first completely decentralized blockchain banking operation made up of only smart contracts has launched on the Ethereum network. The open-source banking platform called Marble was unveiled in a blog post on July 17, 2018. The announcement revealed that Marble would use smart contracts to provide funding to low-risk and provably fair protocols in need of a lender.
Marble’s “Flash Lending”
The flagship function on Marble’s platform is called Flash Lending, and it is currently available in public beta testing mode to the Ethereum mainnet. Flash lending allows users to borrow ether and ERC20 tokens to fund arbitrage transactions on the network’s blockchain.
A user borrows funds from Marble to take part in arbitrage trading on any decentralized exchange (DEX) platform on the Ethereum network. Using these funds, they can exploit pricing differences for the same assets across different exchanges to earn a profit that they will retain after returning the funds as required in the smart contract. In so doing, users can profit from asset pricing inefficiencies across DEX platforms such as Kyber and 0x without using their own money.
This entire process takes place quickly in the course of a single atomic transaction, and there is no potential failure point, as both ends of the operation are fully decentralized.
What Is the use?
Marble is very upfront about the rationale behind the service – to encourage the use of decentralized exchanges. Despite their growing popularity, DEX platforms are still responsible for only a tiny proportion of total crypto asset trade volumes, and Marble wants to change this.
The reasoning is that arbitrage trading not only introduces and incentivizes more users to use DEX platforms, but it also boosts asset liquidity and improves asset price discovery. Each of these functions is a significant step on the road to making decentralized exchanges more fashionable and functional. Marble hopes that arbitrage trading will catalyze the general adoption of DEX platforms across the cryptosphere by enabling users to earn profits without staking their own money.
Marble’s smart contracts are currently deployed in public meta mode on the Ethereum mainnet, and it presently holds a balance of two ETH, serving as a bug bounty.
In the blog post, the platform is keen to point out that it is continuously on the lookout for development projects that require flash lending services such as an automated arbitrage trade bot. In the long term, Marble’s developers say that they are looking beyond arbitrage trading, with an eye on a diverse range of use cases such as on-chain financial derivatives and margin trading.
To this end, Marble is being constructed in a modular way that allows the platform to work for many different purposes simultaneously. The platform’s message for developers building any protocols in need of flash lending services is simple: Let’s talk.