Fintech Spotlight: How Morpher Lets You Buy Apple, On A Weekend, With As Little As $1

When typically discussed, blockchain lacks a utility component.

That’s what Morpher CEO Martin Fröhler is looking to change. Fröhler is a mathematician, with a background in quantitative finance, specializing in research and trading algorithms. After founding a decentralized quantitative hedge fund in Silicon Valley, Martin co-developed the Morpher Protocol to replicate the trading of any market, on the blockchain, without actually trading underlying assets.

In the simplest way, Morpher cuts out the middleman -- brokers, exchanges, and counterparties -- allowing market participants the ability to trade assets, with infinite liquidity, on an incorruptible protocol. The solution cuts the costs associated with fixed liquidity, enabling participants, globally, to transact any asset, fractionally, with leverage and no fees.

“Our goal is to democratize trading and investing as a whole,” the CEO said. “Morpher provides global access to anyone who trades on limited markets, with infinite liquidity.”

Why It Matters: Today’s financial markets are unfair due to regulations and incentive structures. In playing by the rules, nearly 90% of the world’s population is excluded from financial markets.

That’s the gap Fröhler is looking to bridge with Morpher.

“The only way to really give anyone the opportunity to participate in markets is via blockchain,” Fröhler said in a statement on the drive for yield at a time of low or negative rates, and capital injections. “We virtualize real-world assets like stocks and commodities, and make them accessible to anyone.”

With Morpher, every market can be shorted or bought at any time with any amount of leverage.

“You can start investing with as little as $5 or $50 million. We’re not a two-sided marketplace. We’re a blockchain that empowers you to trade without a counterparty. You can place any bet, on any market, in any direction, at any time. If you want to buy Apple, you can just buy it.”

How It Works: Morpher observes exchange-traded markets, via real-time data feeds from providers like IEX, a stock exchange, and data infrastructure platform.

“It’s virtual and perpetual," Fröhler said. "You can think of the assets we offer as virtual copies. There’s no expiration, and we just use the data feeds to know what the price of the asset is.”

If a market participant is interested in betting on a stock, Morpher takes the price of the stock, creates virtual shares of it, and whenever the bet is closed, the participant receives a token payout.

“When you trade Apple, you trade against the protocol, which is like a central bank. It can simply create a token to pay you if your bet has been successful, or it destroys part of your token if your bet has not been successful.”

For example, if one was to bet 100 Morpher tokens on Apple Inc AAPL, and the stock rallies 10%, the user would end up with 110 Morpher tokens. The protocol would simply create 10 new tokens.

“Nobody else does this," Fröhler said. "Every other exchange or broker has the problem of limited liquidity on the two-sided marketplace. You can only buy what anyone else is willing to sell you at that point.”

So What’s Next: Prospective users can sign up and check out the platform for themselves.

“You can log in and immediately trade on the platform,” Fröhler said. “You receive 100 Morpher tokens, initially. You can go long or short, and you have the option to use leverage for any of the assets supported.”

Morpher has stocks in the S&P 500 and Nasdaq 100. Popular among users has been GameStop Corporation GME, which was pushed in recent weeks to as high as $513.12 in premarket trade on Jan. 28, shortly before numerous brokers made the controversial decision to limit trades, creating a synthetic imbalance that caused the stock to plummet.

In weeks after, it was revealed that more than 1 million GameStop shares failed-to-deliver, the result of a financial system that needs work in the clearing department.

“Hypothetically, we can turn anything with a reliable, real-time data feed into a market that’s tradable on Morpher.”

Eventually, Fröhler wishes to expand on platform capabilities, as well as promote institutional adoption.

“The next item on the roadmap is an ETH compatible wallet that comes with a social media recovery key and is non-custodial. On the product side, is a decentralized DeFi app for the Morpher Protocol that does not run on our side chain, but directly on ETH -- a Uniswap for all kinds of assets.”