# Welcome to TAD3

## TAD3 is not DTCC

The Depository Trust and Clearing Corporation[^about_DTCC] has a long-standing history in the financial markets, providing centralized clearing and settlement for the U.S. securities market. Historically, DTCC has facilitated the efficient transfer of securities, but this centralized model has also led to inefficiencies and control by a few powerful institutions. In the late 90's, it is our understanding that DTCC management—upon increased control from brokers rather than banks—started focusing [more on profits than accuracy](https://www.linkedin.com/pulse/gamestop-first-successful-short-squeeze-john-wooten-xvyne/).

Accordingly, BlockTransfer [built TAD3](https://www.blocktransfer.com/blog/post/investor-to-investor-direct-trading), a replacement system as the [first non-DTCC Direct Registration System](https://www.sec.gov/comments/s7-15-23/s71523-301019-767522.pdf). You can view and join our [inagural repo](https://github.com/blocktransfer/py-tad3-horizon) on GitHub.

## What is Direct Registration/DRS?
We recommend exploring the predominant source of DRS information at **[WhyDRS.org](https://www.whydrs.org/)**. DRS is sort of like holding the keys to your own crypto, except with traditional stocks and bonds. Instead of sitting in "street name," the assets are held in **your name**. DRS is a significant shift towards the beneficial decentralization of securities, transparently connecting investors like us with companies that issue stock.

## What are DTCC's DRS Problems?

### Legacy Stock Transfers
Traditional stock transfers often involve cumbersome manual paperwork processes, such as the **[medallion signature guarantee stamp](https://www.blocktransfer.com/blog/post/medallion-signature-guarantee-stamps)**, which is a global barrier to seamless transfers. Without effective stock transfers, investors unfortunately cannot trade without costly centralized brokers.[^middlemen_req]

### Legacy Shareholder Voting
The conventional proxy voting system is **[fraught with inefficiencies and misrepresentations](https://www.blocktransfer.com/blog/post/proxy-voting-flaws)**. The root of the problem is that DTCC holds all street name shares in a single partnership, leading to repetative confusion and miscounts of brokerage votes.

### Legacy Trading Systems
The incumbent American stock market system invokes an average of 11 Wall Street middlemen per trade.[^middlemen_many] The concept of **[direct investor-to-investor trading](https://www.blocktransfer.com/blog/post/investor-to-investor-direct-trading)** represents a significant shift towards more democratic and efficient markets. It is our view that [the SDEX](https://developers.stellar.org/docs/learn/encyclopedia/liquidity-on-stellar-sdex-liquidity-pools) represents a step-function improvement in global markets, empowering investors to connect with companies without any middlemen intervention whatsoever.

[^about_DTCC]: Learn more about the [origins of DTCC and our markets](https://origins.jfwooten4.com).
[^middlemen_req]: _Id. See also_ this [condensed explainer](https://youtu.be/YUwqzeaR1lA) of early stock transfers.
[^middlemen_many]: _See_ [this video](https://explainer.jfwooten4.com), _supra [^about_DTCC]_, and appendix B of our [Yellowpaper](https://blocktransfer.com/.well-known/yellowpaper.pdf).