Crypto Trading: Please Hold My Hand

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The article is penned by Nika Franchi. She is a cryptocurrency professional whose focus is on analyzing the blockchain market and communicating the current trends to the general public in simple, clear terms. She’s been involved in getting dozens of blockchain startups to the market.

In today"s cryptocurrency market, four main obstacles are preventing potential retail investors from jumping on the bandwagon to generate an extra stream of income using digital assets. Namely, they are lack of experience and confidence, lack of easily accessible, unified trading interface, lack of trust, and centralization of trading.

The cryptocurrency industry is still in its very early stages of development and, even though there are plenty of professional traders on the market, it is noticeably lacking in retail investors, who would bring more liquidity with them. But the problem is that even though retail investors would love to make a little extra money on rate swings, they lack the knowledge of how to make use of available tools and access the most effective strategies. So, as much as they may want to trade in crypto, most potential small-time investors confess that they are uncertain how to enter the market. Research shows that the public is quite eager to join the crypto trading world. But most people just aren"t willing to put in the time and effort to learn the industry.

Crypto exchanges, currently some of the main players in the market, cannot realistically be expected to address this problem on their end: their focus is on safeguarding users’ funds from potential threats. Even though they would love to see the number of their users grow, they are likely not ready to start educating the public to ensure that users know how to take advantage of the available tools, even on just one single exchange.

Lack of experience and confidence in crypto trading is not the only obstacle retail investors face. Although most key tools and trading opportunities are essentially the same from one exchange to the other, there are also striking variations between them in interface and available services. And this creates the second problem: the need for traders to learn and adjust to having to use different tools at different exchanges. Crypto exchanges aren"t motivated to bring their toolsets to a universal standard: that would mean they would have to share their users and their liquidity, which translates into diminished profits. Yes, that would be very convenient for traders of all stripes, but the exchanges" reluctance is perfectly understandable.

Essentially, both sides – the trading platforms and the public – would like to have this gap closed. And this is starting to happen with the emergence of platforms focused on self-education and community experience-sharing. You can go on the web and see what stock Bill Gates just purchased, or which cryptocurrencies are gaining in popularity. It seems likely that this new trend, which has come to be known as Social Trading, will usher in a new era in crypto trading, in which users will be exchanging and sharing their trading ideas and strategies instead of posting pictures of their lunch or cats, and in this way help newcomers to the market orient themselves by following the advice of more experienced traders.

But while social platforms are creating all these great new opportunities, another, third problem results from the previous two solutions: that of the lack of trust between traders and trading venues, i.e. the main participants in the trading process. Indeed, an average user has a hard time deciding which traders actually know what they are doing, and which are just inexperienced newbies seeking attention and posing as opinion leaders?

The last but by far not the least issue, in fact, a foundational problem in and of itself, is a bigger overarching problem of centralization of crypto trading, which aims to solve the general issue of lack of trust in the marketplace. Let"s stop here for a minute and consider the problem. The core idea behind blockchain is decentralization: it is supposed to be a completely trustless system. Yet the existing paradigm is largely based on centralized exchanges acting as a trusted authority between market participants. They have no choice but to entrust their private keys to a single institution, which ensures the security and safety of the funds, monitors trades, checks the order books, etc. However, centralized exchanges can be and do get hacked, in which case their clients lose their money. They also tend to have far too much discretionary power and can change their rules at a drop of a hat, and users have virtually no leverage when that happens.

This system is a legacy of the traditional banking sector, and many in the blockchain community loath it, seeing it as an inherent paradox. This is why a new model of decentralized exchanges, or DEX, has emerged in the past couple of years. Decentralized exchanges are an answer to many of the above problems of centralized trading: they are open-source peer-to-peer automated digital asset trading platforms: the trading process does not involve a central authority monitoring or executing trading orders. Deals on a DEX are executed directly between the parties, peer-to-peer, and this fits perfectly with the original philosophy of blockchain: decentralization and autonomy. Trading at a DEX, you maintain full control of your private keys and your assets. These exchanges are truly trustless and transparent; they are also anonymous, and are run by the users.

All of the problems we discussed above are important, critical even, and most cryptocurrency market players are keenly aware of them. But in finding workable solutions one wonders if it is even feasible to keep all of the benefits of the existing market structure, in particular the crypto exchanges" effort to ensure total security, while also coming up with workable, convenient solutions for professional and retail traders?

A new startup FUMGO found a way to solve all these issues – the problems of inexperience and lack of confidence, the universal interface, the lack of trust, and decentralization that we discussed earlier – in one fell swoop. Their clever solution is a social trading terminal, but it"s not just one of the many others. Theirs is the first terminal on the market that is focused on and is driven by the Binance DEX community. It is equally suitable and easy to use for both the new traders and those who already have a great understanding of the market. At the heart of the new platform are the social trading tools, with social signals obtained from the Binance DEX chats and community. The terminal"s interface is simple and intuitively understandable – even a novice would be able to get a hang of it quickly and effortlessly. The solution is integrated with several reputable crypto exchanges and communicates with them in real-time. Platform"s users no longer need to have separate accounts at each exchange and deal with their individual peculiarities: one FUMGO account, one interface does it all. "In today"s world, we rely on social media for everything – where to go for lunch, where to stay when visiting a different city, how to fix your dishwasher. We thought that the same idea would work great if we applied it to crypto trading, which so many people fear and shy away from," says FUMGO CVO and Co-Founder Anton Bartenev. "While considering the problem, we realized that we would need to create a system that allowed users to exchange their ideas and strategies, in one form or another, without relying on trust. This is why we put the Binance DEX – both the community and the exchange itself – smack in the center of our system: it ensures transparency and eliminates the need for trust."

In a few words, the idea is very simple. FUMGO terminal is a platform that aims to help new traders to start making money through social trading by automatically following professional traders" trading strategies. By doing so, they can learn the cryptocurrency market and gain the confidence to start trading on different exchanges from one terminal. FUMGO is also a place for professional traders to turn their knowledge and experience into money. The platform creates a complete synergy between social trading, user education, and profit: none can exist without the other. The terminal keeps a record of all trades, productivity, users" level of activity, and the number of users that follow each expert trader on the platform. These metrics allow them to rate pro traders based simply on numbers. Traders stats are completely open: prospective followers can examine them at any time and from any angle. Pro traders are a pivotal component of the social trading system: they are the source of knowledge and confidence for the new traders users. New users or even other experts can mirror the shrewd, potentially lucrative strategies developed by professionals to try to make money from their cryptocurrencies. Investors can make use of pro traders" experience by automatically following their orders. They can also set their own trading limits. “Orienting yourself in the crypto world, if you are a newcomer, can be a confusing and overwhelming experience. This is why we thought that making a service, a community that essentially holds your hand and supports you through the process would be a good idea,” says FUMGO CEO and Co-Founder Yehor Shyshov. "You start with mirroring the trading strategies of experienced professional traders and learn to make money in the crypto space without spending vast amounts of time and mental power, and the pros get to prove their salt and up their game. We believe that our terminal is highly relevant as, with its social trading underpinnings, it eliminates obstacles and opens vast opportunities to both the professional and retail crypto users. As such, we hope that it will play an important role in educating the community and propelling the crypto market to the new level of awareness and mass adoption.”

This is a submitted sponsored story. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the content above.

Last modified (UTC): September 20, 2019 9:48 AM