The Brave New World of Social Trading
Crypto assets are increasingly valued as a hedge against fiat volatility and also as an alternative way of holding capital. While crypto-currencies have a reputation as being highly volatile, social trading platform HedgeTrade has brokered a new business model where multiple parties can benefit from the successful price predictions of experienced crypto traders.
Not a zero-sum game any more, experienced traders when staking option positions can pay a premium equal to 10% of the position’s value to create a Blueprint that others can follow.
“Our ecosystem is set up to help novice traders evolve and improve as they trade alongside the pros?-?so they can get to the point where they are the ones publishing Blueprints (instead of copying others),” explains CEO and co-founder David Waslen.
“When a trader is beginning, they can purchase Blueprints to unlock the details of the trades so they can make the same trades. By using the platform, newcomers are automatically learning about cryptocurrency prices, trading pairs, and blockchain transactions.”
If the trade succeeds, its originator earns income from every trader who unlocked that Blueprint. If the trade is unsuccessful the first seven Blueprint buyers are distributed the stake (minus a commission).
“Additionally, and this is where we really stand out, the purchasers get their money back. So we only reward traders for accurate information and then verify it on the blockchain. Smart contracts are used each time a Blueprint is created to automate the payouts,” says Waslen.
Liquidity is a factor the team is working hard to ensure, encouraging uptake of HEDG tokens by new users through a mass outreach campaign and adding staking options as well as cross-listing on a number of other exchanges and taking swap positions.
“In the past few months, we’ve added multiple listings on exchanges and swap platforms, and we’ll continue to work on building more of these relationships. Greater token distribution will be a constant focus and helps with token stability.”
Eyes on the Prize
Currently the exchange trades spot price predictions, and has already attracted a membership base of several thousand. The management team is keen to make it a one-stop shop for investors of all levels of experience, and plans to offer further derivatives as well as sports and esports predictions.
Among the product offerings are a wide range of indicators, quantifying proxies for ‘fear’ and ‘greed’ or ‘bull and bear’ trades as traditional finance knows them. Alternative indices such as Google Trends, to highlight which blockchain companies and crypto currencies are making headlines, yields further insight into probable stock direction. It also gives details on UTXOs in profit, to give further insight into liquidity and the transaction cost of specific investments.