HedgeTrade is a blockchain-powered financial application for social trading based out of Singapore, Canada, and Europe. Recently we had a chance to talk with David Waslen, CEO and co-founder of the project. Being a graduate from London Business School and Dartmouth College, David has executive experience in corporate finance, venture capital, and private equity. His expertise lies in building out the next generation of FinTech products with a focus on software and analytics platforms that enhance trading performance and efficiencies for retail customers, high-frequency traders, and institutions alike. In this interview, CoinJoy asked David about trading, new technologies, and predictions. David also shared with us the exclusive news of the project. Let’s roll!
Hi, Dave! We’re really glad that you agreed to answer a few questions for us. Well, trading is a tricky topic. Tell us in a nutshell what HedgeTrade is and how does it work?
We designed HedgeTrade from the beginning as a way for traders to earn tokens from sharing their insights, and a way for novice traders to have a place to access verified trading calls from traders who have skin in the game. Each time a trader publishes a prediction “Blueprint”, they stake HEDG tokens to back up their trading call. Novices can purchase it to unlock the details of the trade. If the prediction turns out to be correct, the trader gets their stake back plus the proceeds of the sale of that Blueprint. But if they were incorrect, they lose their stake and the purchasers have a chance to earn a percentage of the lost stake.
There are many key differentiators between HedgeTrade and other paid groups and social trading venues — a lot of times people end up paying for bad information and have no recourse if the prediction ends up being wrong.
We integrated smart contract-powered prediction “Blueprints” that enable users to see a transparent and blockchain-verified history of each trader’s prediction outcomes. Additionally, prediction purchasers get a refund if the prediction is incorrect, giving newcomers an extra hedge as they enter crypto markets. All users benefit from the aligned incentives model and have multiple ways to earn HEDG tokens.
How did it all start? How did the idea for HedgeTrade come about? Who was at the origin of the project, and how big is the project team now?
My friend and Co-Founder Peter Danihel, who is also a derivatives trader, once shared one of his trading calls with me. I used the information to make a trade and got a very positive result. We thought at the time it would be a great idea to have some sort of platform where pro traders could post their trading calls to earn from their expertise and newer traders had a place to get sound trading information. But we wanted to make sure traders were held accountable for their predictions, and not just shooting from the hip with no skin in the game. At the time, Ethereum was getting attention with all the ERC-20 tokens coming out and smart contracts became available. So we thought, let’s do this and make the platform blockchain verified, so to speak. That’s basically what we’ve done.
What difficulties have you faced while creating the HedgeTrade platform?
As with every new token project, liquidity is a challenge. With our team heavy with developers and traders, we were able to create algorithmic trading engines to assuage the liquidity dilemma; they are now operating on dozens of markets. Another issue is marketing, which can build better sentiment around your project and token. Crypto projects operate in a quasi regulated arena and mainstream advertising avenues are often restricted to us. So we’ve tried to get the creative building out marketing assets that we own that continue to build and drive traffic, which has gone extremely well.
How is a trader verified so that he gets to your platform and creates their trading prediction? Can anyone create and sell their “Blueprint”? How does it all work?
Any trader can instantly join HedgeTrade and can use HEDG or Bitcoin to buy a prediction or post one. Once they make a prediction and have staked HEDG tokens to back it up, our unique, smart contract-fueled reputation algorithm kicks in to ensure that the results of each prediction are immutable and permanently stored on the blockchain. These results and the traders’ success scores are openly available to the community, giving all users in the ecosystem sentiment data on cryptocurrencies as well as data on who are the most accurate traders to look to when purchasing trading calls.
Will a crypto beginner be able to trade using your platform? What is the probability that a noob will succeed and start trading successfully?
The whole platform is set up to provide the usability for a newbie along with a cutting edge trading experience for top traders. The incentives are aligned so that both groups — pros and noobs — come together to gain insight and earn HEDG. New traders can look to the top traders in the Leaderboard and use HEDG to purchase trading calls, then copytrade right alongside the pros.
What is unique is that if the trader’s prediction proves to be incorrect, the newcomer who purchased it will get their money back, plus a chance to earn part of the trader’s lost stake. Each newcomer that uses the platform can learn from the pros, at the same time trading just like they do. As they become more accomplished, they can also start to earn from their predictions.
We read news about hackers and leaks of personal data almost every day. How do you ensure the security of information about your platform users?
Our platform allows the users to only share information that they are comfortable with. They can be anonymous or tie their user profile to their other social networks. We also use the highest grade of custody and have all kinds of limits and restrictions on big withdrawals to ensure funds will always remain secure.
It is always interesting to know what lies ahead for users. What are your short and long term plans?
I’m glad you asked because we have been building massive value adds in the defi arena. As we have always wanted to apply decentralized features whenever possible, we just launched Steaks.Finance, which will enable traders to “steak”, farm, and become liquidity providers just like with Uniswap. The only difference is we have a predictions platform built with thousands of users and a seasoned crypto team behind the project. Prediction markets are now emerging ( according to Vitalik Buterin ) as one of the best examples of successful Dapps. Fees generated on the HedgeTrade platform will be distributed to Steakers in the SteakBar, meaning that STEAK yield farming will not end as with many defi farming tokens.
Our roadmap is pretty intense — we plan to add sports betting, esports, and trading pairs for stocks and other types of assets to our prediction platform. We’ll continue building up Steaks Finance and its decentralized exchange as well. We plan to build an automated robo-advisor, launch a decentralized index fund, and integrate HedgeTrade with more exchanges as well as with our own SteakSwap DEX for enabling frictionless trading once you’ve purchased a prediction.
On your platform, everyone uses $HEDG. Tell us more about these tokens. What is their field of application? What challenges does your crypto face?
HEDG is used in the HedgeTrade ecosystem by traders of all experience levels. Pro traders come to the platform to earn HEDG by creating and selling predictions on crypto trading pairs to less-experienced traders. They choose an amount of HEDG tokens to stake to back up their prediction. If their prediction proves true, they get the stake back and earn from the purchases. If incorrect, they lose their stake and the initial purchasers get a share of the lost stake.
Some of the newer users have found they can also earn a bit of HEDG by betting against predictions they feel will not come true. So they try to be one of the first buyers of a prediction, and if it does indeed prove incorrect, they can earn a bit of HEDG from the lost stake plus get their money back from buying the prediction. With Steaks Finance, HEDG becomes the functional token on HedgeTrade, and fees from the platform will be paid out to STEAK stakers.
As for challenges, at first, it’s tricky to get listed on the big exchanges. It’s kind of a catch-22 especially when first launching your token — you need liquidity to get listed, but you also need to be on these exchanges to have liquidity. These new defi tokens like Steaks Finance and SushiSwap help alleviate that since the protocols incentivize liquidity and streamline the swaps, aggregating liquidity and bringing decentralized markets together. It’s kind of come full circle — you see Binance and the other big exchanges quickly listing these hot defi tokens without the normal vetting process, just to get in on some of the massive transaction revenue.
Many countries are now working to develop their digital currencies. How do you feel about this? Could this affect your performance?
Digital currencies are certainly the future of money and it will be interesting to see how governments and central banks try to mimic the success of decentralized coins without the incentivization, distributed networks, and lighting fast innovation you see in the defi markets. As far as we’re concerned, the market will decide what money they want to use. So we plan to continue on our path of providing open access, transparent and rewarding money systems that are not manipulated, controlled, and censored by 3rd party banks and governments. Markets will decide and we will continue to stay in tune with the wants and needs of these markets.
Let’s talk about DeFi. Do you think the development of a decentralized financial space is important?
Development in the defi space right now is absolutely breathtaking. The whole idea of decentralized or open finance resonates so strongly now, on a global basis. People are acutely aware of the shortcomings of government and central bank-led fiscal policy. And while many of the current defi protocols may seem technical for the average Joe, this immense infrastructure continues to be built out, one layer over another. Protocols that invite community governance, use incentivization to reward users to do things that benefit the community and offer full transparency are going to shine brightly against the backdrop of mass economic stress.
We thank David for the interview. Subscribe to his Twitter, and learn more about the project on the HedgeTrade website. Check our socials for more articles on cryptocurrencies. Follow us on Twitter, subscribe to our YouTube channel, join our Telegram.