Uranium One Partners With Insolar to Improve Transparency in Uranium Markets Using Blockchain
Significant uranium producer Uranium One and DLT (distributed ledger technology) startup Insolar have associated with traversing blockchain’s abilities in energy trading and uranium.
The collaboration will concentrate on the development of the production and distribution of uranium, as multi-party deals in the industry are still led “utilizing paper and pencil with non-standard contracts that cross borders and need tedious legal review.”
Uranium One presumes that blockchain will improve compliance, security, and reliability in the sector.
Insolar stated that the parties have been considering a pilot program for the project and expect to launch the pilot later this year, though it may take more than a year for the complete launch of the project.
Bringing blockchain into over-the-counter markets
Aside from that, Insolar is going to facilitate research blockchain applications in non-exchange-traded commodities markets like iron ore. The company predicts that its distributed ledger technology-based platform could evade the OTC (over-the-counter) deal series from months to weeks and decrease transaction costs by forty percent.
Global over-the-counter market trading volume is purportedly $380 billion annually, and Insolar predicts that up to 3% of that is recently getting used on overhead and other transaction-related costs. Elaborating further on the matter, Insolar stated:
“In trading of over-the-counter commodities such as uranium, the contracts and negotiating process is extremely complex involving at least six parties (the miner, the converter, the power generation customer, and their respective banks). This means considerable resources to negotiate and sign contracts; Insolar estimates that it could cost up to $50,000 per deal.”
By executing blockchain in the OTC commodity markets, Insolar intends to solve two significant difficulties the sector faces. The first is that transactions are costly and slow and include various participants, which leads to dispersed communication and numerous reconciliations among involved parties.
The second problem rests in the absence of a transparent pricing mechanism, as third-party agencies quote most pricing.
“There is no assurance in the accuracy and completeness of the input data; it is a black box in most markets. The sector badly needs a system that can collect transaction data from all participants and provide spot and forecast prices without exposing the details of individual transactions,” Insolar described.
Insolar described the requirement for parties to have a decentralized system where no single party exercises control, continuing:
“In the proposed system, parties interact within the platform to transact securely and seamlessly. Data from the trades is used to set a transparent spot market price and reliable forecasts without revealing the exact figures and sums of particular transactions. Smart contracts are applied to the data in the distributed ledger, improving automation of the deal signing process and guaranteeing that the deal follows the pre-agreed process.”
Blockchain discovers traction in mineral supply chains
Other industry players have also traversed blockchain’s abilities to cut out third parties and preserve both time and money on deals in the minerals trading sector. A new alliance between IBM and MineHub Technologies will build a blockchain-based solution to streamline SCM within the metals and mining industry.
By digitizing the supply chain by the production of a ledger shared within permissioned participants, both companies can assure a real-time, aggregated view of transactions and information flow throughout the supply chain.
Blockchain-based digital trading platform Tradewind Markets also originated a digital device that gives supply chain derivation to sellers and buyers of valuable metals last November.