If you’ve spent one millisecond in crypto Twitter, you’ve no doubt seen a few cryptocurrency
price predictions. Traders that make these forecasts for their audience often use social media
platforms and video streams to spread their information. Some traders have paid groups, where
those that join pay a fee to access their take on the crypto market. Still, others use platforms like
Etoro to sell predictions to newer users who copy trade their favorite traders’ picks.
Collectively, all of these services are referred to as “Social Trading”, which has been happening
since social media platforms emerged. (Never doubt a trader’s ability to find a new edge.) But
while social trading platforms do give users a chance to learn from more experienced traders,
and even though they allow professional traders to earn money, there are a few very important
things missing: Accountability and Incentivization.
If a trade prediction that gets copied via social trading ends up being incorrect, the trader’s
followers may lose confidence and not copy that trader again. But the trade is over and done
with. So, they not only lose money on the trade, but they also lose the money they paid for that
prediction.
Maybe you’ve copy traded a few popular traders. If so, you understand that you’ll go down with
the ship when a prediction proves false. In many cases, as with paid groups and Etoro, you’ll
still pay for copying that faulty forecast above and beyond what you may have lost on the trade.
But there’s a new predictions platform named, HedgeTrade, that solves the two major problems
in social trading: Lack of accountability and no incentivization to give accurate forecasts.
Lack of Accountability
If a trader’s prediction proves incorrect and they had posted it
on Twitter, they can most certainly delete it. They also have the option to block anyone
who complains on their feed. They may lose a few followers, but we all know there are
plenty more crypto hounds wanting to learn trading strategy laying wait on social media.
Traders have never had a means for holding themselves accountable on social media,
other than keeping their audience happy. But as mentioned, it’s not that difficult to gain
new followers. In a nutshell, experienced traders selling their predictions (or access to
their predictions) are not held accountable for false predictions in any tangible way. Their
users may complain, but there is no recourse to recoup the money they lost in paying for
incorrect information.
No Incentivization
Traders are not incentivized enough to provide the best
information. Whether they are correct or not, they still get paid and still have access to
new leagues of worldwide newbie crypto traders. Additionally, they always have the
option to delete erroneous forecasts at any time on their social media channels.
HedgeTrade is a social trading platform where experienced traders are highly incentivized to
publish the best predictions possible. As such, those that purchase the predictions actually can
hedge their risk while learning to trade from the pros. By holding traders accountable via
incentivization and blockchain-verified data, everybody wins. Here’s how it works:
● Step 1 – An experienced crypto trader wants to earn cryptocurrency from his trade
predictions in a social trading platform. They join HedgeTrade with just an email and can
instantly create and publish smart contract-powered prediction “Blueprints”. All Blueprints
are available for sale in the HedgeTrade Blueprint Market, where other users may
browse predictions and view reputation scores.
● Step 2 – A new trader wants to experience crypto trading without getting ‘rekt’. They
decide to join HedgeTrade and copy trade a more experienced trader as they learn the
ropes. After the quick sign-up process, they are now able to shop for different trade pair
predictions. Once they’ve viewed the marketplace and determined a trader they want to
copy based on their reputation score, they may choose a trade prediction to copy by
purchasing the Blueprint, which will unlock all the trade details. Now the new trader can
go make the trade like a pro.
● Step 3 – The Blueprint purchase triggers a smart contract. When the outcome of the
prediction is available (according to the exit date and via an oracle), there are two
possible scenarios that happen automatically:
- 1 – The prediction is correct. The experienced trader who published the
Blueprint gets paid from those users who bought the prediction. Whatever they
staked against their prediction is now awarded to them. The users who bought
the prediction were able to make a professional-grade trade on their exchange.
Everybody benefits from accurate trade prediction. - 2 – The prediction is incorrect. Now, the users who bought the trader’s
prediction get their money back and the experienced trader loses their stake. No
one benefits from the inaccurate forecast. But newer users are able to hedge
their risk by copy trading on a platform that returns their money when a prediction
is wrong.
After each trade prediction outcome, the publisher’s reputation is updated to reflect the result.
Reputation scores are stored on the Ethereum Blockchain and cannot be deleted or
manipulated.
HedgeTrade solves the lack of accountability in social trading. It uses blockchain technology,
game theory and incentivization to ensure that all users have the best possible trading and
learning experience.
The HedgeTrade tokenized application is the flagship product of Rublix Development, a
software development company building blockchain-based financial tools. Based in Singapore
and with an operations center in Calgary, Rublix is led by experts in finance, blockchain
technology, software development, and data analytics.