Coordinated Discovery Markets

The economy of today runs largely through markets that are set up and maintained by the financial sector.  Hard working Americans who produce crops or other commodities need to use these markets to connect with buyers.  When these producers find a buyer in the market, a transaction occurs and the three parties in this exchange are happy.  The buyer gets the goods they wanted, the producer gets paid for his or her hard work, and the market creator (some firm in the financial sector) gets to charge a commission fee on the trade.  Thus beneficial gains from trade are realized and our economy functions.  But this system is highly inefficient.  Often times there are 40-50 transactions before the material reaches its end user.  With each trade the financial sector charges a commission creating a huge profit for themselves at the expense of the buyers and sellers.  About 16% of the transaction value is extracted through this process.  Consider that the top 10 trading firms make $1,300,000,000,000 a year; imagine the boost to the economy if a more efficient system was in place to connect buyers and sellers.  The way that markets are operated now also creates perverse incentives.  Anyone can bet on the failure of the market and make money if the market does poorly.  This includes the financial firms that are running the market! This conflict of interest is immoral and corrupt and yet it is completely legal.  It is accepted as a necessary evil to keep our economy functioning.  This system leads to market bubbles and crashes, carries with it large regulation costs, and in the end creates a market that is incredibly inefficient.

The beauty of the free market economy is that it encourages innovation. Why not apply this same critical eye to the very engine of the free market system-the market?  Coordinated Discovery Market (CDM) is a new market design that would connect producers to buyers but at a fraction of the cost charged by current market creators.  CDM also aligns the interest of speculators on the market with the participants in the market.  In other words everyone wants the market to work as effectively as it can.  CDM fixes the existing conflict of interest.  It rewards speculators for improving the success of the market.  CDM can provide goods to buyers at a cheaper rate, while, at the same time, paying the producers more for their work. 

Commodity markets are worth $30,000,000,000,000, close to 40% of the world's economy.  Currently 16% of this is captured by the financial sectors.  CDM would take less than 1% of that value while providing markets that are more aligned with the interests of their participants.   Coordinated Discovery Markets will revolutionize capitalism as we know it.  The boost to the economy will be growth the likes of which the world has never seen.  How often do you get the chance to save the world while simultaneously putting money in your pocket?  All that you have to do is participate in a CDM market.  It is both in the best interest of your business as well as your civic duty to learn more about Coordinated Discovery Markets.