Abstract:

The structure of the traditional stock market consists of collaboration of various individuals, organizations and several intermediaries namely brokers and traders. In the Indian Stock market, an investor can participate in the trading process only through stock brokers. Stock broker firms charge these investors for the services provided. Each party manages its own system and collaborates with others to facilitate trading on the stock exchange platform. The buy and sell orders go through different parties before settlement. The execution of post-trade settlements takes several days. Involvements of several intermediaries lead to shortcomings such as single point failure, brokerage charges, weak transparency and longer time for posttrade settlements. Blockchain technology is a distributed ledger technology that allows peer to peer transactions eliminating third parties. In this project, we use a blockchain-based architecture to implement the stock trading process. Our architecture uses a private blockchain network to create consortium networks leveraging few participants in the traditional stock market as the validating nodes. The stock trading logic is implemented in a smart contract that is deployed on the private blockchain network. Since the new platform does not introduce significant changes to the stock exchange trading logic and does not eliminate any of the major traditional parties from the system, our proposal promotes efficient adoption and deployment of decentralized stock exchange platforms.

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