HedgeTrade Platform and HEDG token lie at the heart of the blockchain-powered network that seeks to empower its users to receive market price forecasts in the field of cryptocurrency trading and other properties.
What’s the HedgeTrade?
Launched under the slogan of championing the collective trading movement with the aid of blockchain technologies, the rapid growth of the HedgeTrade network in 2019 shocked many in the crypto community. As of August 2019, the currency was listed as one of the top 50 cryptos driven by the promotion of the HedgeTrade decentralized application (dApp). The app was primarily developed to provide users with cryptocurrency trading data, forecasts and, as a bonus, educational content. Its key aim is to act as a bridge between newbies and seasoned traders, who are often divided by large information gaps when it comes to social trading. With HedgeTrade, more advanced users are provided with a network that enables them to share their expertise and to gain some HEDG tokens in the course of delivering correct information.
Around the same time, less advanced consumers are able to buy trading projections, bundled in the form of so-called blueprints, which are further secured by the HedgeTrade Smart Contracts. In time, the experience gained in this way will allow these users to engage themselves in skilled trading, in particular with the aid of the market resources offered by the HedgeTrade for pros and beginners alike. The token sale for the project took place at the end of 2018 under the auspices of Rublix, a firm selling financial services solutions combined with the blockchain implementation. The core people behind this company include Dave Waslen (CEO, co-founder), Peter Danihel (lead developer, co-founder) and Frank Danihel (COO).
What is HedgeTrade trying to do?
Although it is mainly concerned with cryptos, HedgeTrade seeks to expand its coverage of different fungible assets as well. The goals are primarily influenced by potential limitations found by its creators in current quantitative trading systems:
- HedgeTrade aims to enhance what conventional trading systems can deliver to both regular and new consumers in terms of their utility. Although prospective traders are free to receive advice from different people representing themselves as experts, they are essentially putting their financial destiny in the hands of few, with little to no assurances. Here, the most novice traders are at the highest risk, as the ins and outs of asset trading are not mastered overnight. Instead, HedgeTrade aims to unify seasoned and prospective traders and stable bets on the blockchain. That is paired with a program of incentives that will help qualified advisors stand squarely behind their recommendations. If the forecast is found to be accurate, the person who made the forecast is entitled to receive the proceeds from the purchasers. In the event of incorrect predictions, users who have purchased the prediction will be compensated by those who have made the prediction.
- While the HedgeTrade aims to democratize access to trading skills, it establishes an environment focused on a win-win scenario in which consumers with diverse profiles experience a high degree with protection from exploitation and unplanned financial losses. Today, traders providing advice and access to their data-based forecasts are in no way constrained by transparency issues to those accessing their services rather than their belief in retaining their credibility. This created the need for the HedgeTrade to have a safe and fair play atmosphere that not only minimizes risks to customers, but also reinforces their trust in trading as a market activity. As hedge-type portfolios are often subject to adverse price movements, the HedgeTrade platform aims to mitigate these price fluctuations by providing consumers with an opportunity to reduce this risk. This is achieved by having access to the market data created by the very community built around the platform. In that context, blocking the door to less scrupulous traders will help HedgeTrade achieve a confidentiality advantage over conventional trading platforms, which is further strengthened by the credibility of the blockchain as a transparent and tamper-resistant record-keeping tool.
- Finally, HedgeTrade is ideally designed to meet the needs of the crypto industry as a whole, which should allow it to tap into the potential of booming financial technology. The HedgeTrade platform developers expect to see their invention ride on the wave of popularity of peer-to-peer trading options that gained prominence with the advent of blockchain. With HedgeTrade, consumers can focus less on brokers and third-party financial institutions, allowing them to try their hand at trading without having access to significant funds and regardless of their geographical location. Over time, these advantages will propel HedgeTrade and related networks to the forefront of the blockchain-powered emerging economies.
How does HedgeTrade work?
HedgeTrade works on the basis of the relationship between blueprints and smart contracts, on the one hand, and group leaders, on the other. In this way, the company provides the synergy of its technical and human capital, both made possible with the aid of blockchain technology.
- A blueprint is the key concept that HedgeTrade works around. It is known as a particular prediction made by the consumer of a specific financial instrument. The development of a blueprint is made possible with the help of the HedgeTrade program, which stores and analyses them at the end of the date on which they are applicable. Once the expiry has taken place, HedgeTrade shall identify a particular blueprint (prediction) as either accurate or false and shall award appropriate incentives to the predictors or to the purchasers of the blueprint accordingly.
- Created blueprints are sent to the HedgeTrade Smart Contracts that are deployed on the blockchain. As such, both the saved forecasts and the creator’s previous performance record remain immune to alteration or modification.
- Upon development of a blueprint, users are required to set two target price values, one of which is the input value and the other the exit value. These will be evaluated against a pre-defined date by the HedgeTrade Oracle, which acts as an automated system that calculates trade results on the basis of the information provided. Evaluations shall be made on the basis of objective information provided by third parties. In any case, the bonuses in case of correct prediction come in the form of HEDG tokens sent by any individual who has purchased a particular blueprint.
- Blueprint purchasers who feel that a particular prediction has some value for them are also entitled to payment in the event that the purchased prediction proves to be incorrect upon its expiry. Compensation in HEDG tokens shall be paid to the initial 10 users who purchase a blueprint.
- HedgeTrade uses a rating system called the HedgeTrade Raking and Scoring, where traders are ranked transparently based on their trading background, the rate of accurate forecasts and the accuracy of the details they receive. In this way, HedgeTrade seeks to root out less trustworthy blueprint makers and provide customers with an easily verifiable framework that encourages accountability.
- Creating a blueprint does not mean a compulsory minimum stake in HEDG tokens. In addition, the blueprints submitted without a stake would not be made available/visible for purchase in the HedgeTrade Blueprint Market. Yet they can also increase the overall HedgeTrade Ranking and Score of the maker.
HedgeTrade’s Underlying Economic Model
Despite being concerned with trading details, no direct trading of cryptocurrencies or other properties close to cryptocurrency exchanges is currently possible on the HedgeTrade network. The explanation for this is that HedgeTrade is all about getting access to information, not to actual properties. The only thing that resembles real trading is the one conducted with HEDG tokens, which takes place in the following situations:
- HEDG tokens may be bought with BTC
- HEDG when sending a blueprint for appraisal and selling is needed
- When a customer purchases an individual blueprint containing information on trading
- In the event that the program judges the blueprint as correct or incorrect upon its expiry. There is also a neutral blueprint condition, which occurs if the value of the entry point has not been met within a specified time.
The payment scheme is structured along the following lines:
- In the case that a blueprint is considered successful, HedgeTrade will charge a 50 percent commission fee on the total amount of HEDG tokens that users have spent on buying a blueprint, while the remainder will go to the blueprint maker.
- In the case of a blueprint being assessed as good but missing in customers, a 5 percent transaction fee is charged on the total amount of HEDG tokens.
- If the blueprint is deemed incomplete, a 50 percent transaction fee will be paid on the total amount of HEDG tokens that the developer has staked, with the rest being sent to the users who have bought the blueprint.
HEDG Token Distribution
HEDG tokens are not available for direct purchase or sale from the HedgeTrade Platform. Alternatively, they can be obtained by depositing BTC into a user account wallet, followed by the use of these funds to purchase HedgeTrade blueprints that may include payments in HEDG tokens.
An alternative option is to buy HEDG tokens from one of the cryptocurrency exchanges that support it, such as CoinTiger, STEX and other markets.
As of August 2019, the market cap of the currency was estimated at USD 255 million. At the same time, some 288 million HEDG have been detected in circulation, out of the estimated expected availability of 1 billion tokens.