HedgeTrade (HEDG) is an Ethereum-based platform targeted at the best cryptocurrency traders. It enables experienced traders to create trading predictions, called "blueprints," in Ethereum smart contracts. Less experienced users can stake lesser amounts (equal to 10% of the initial blueprint stake) to support a trader's blueprints.
This prediction platform is nothing new - Augur (REP), for example, is a similar prediction platform on Ethereum - but it did break into the top 100 cryptocurrencies on CoinMarketCap within its first year. The launch of its closed, invite-only beta propelled it into the spotlight in 2019, and it has a lot of buzz going into 2020.
HedgeTrade also supports hedging, a common risk management strategy to insure against investment losses. Hedging, through derivatives, futures, and shorting, doesnt' fully negate the consequences of a negative market, but it can be used to make up for losses. This is a great benefit for cryptocurrency traders who have seen volatile Bitcoin (BTC) pricing range from $3,000 to $18,000 in value over the past two years. These wild fluctuations are among the principle hurdles stopping the widespread adoption of crypto as currency and investment vehicles.
Financial advisors working for big investment firms still won't recomend cryptocurrency as an investment. This keeps a high bar raised, and HedgeTrade hopes to get newbie investors over that bar to become more comfortable with trading. The platform supports three crypto exchange markets so far (Bitstamp, Bittrex, and Coinbase) and allows predictions on a variety of trading pairs across them, including BTC, LTC, ETH, and XRP to USD, EUR, and GBP.
It also helps experienced traders open a revenue opportunity by convincing users to follow them in HedgeTrade. Social platforms like Telegram, Twitter, YouTube, and Discord are great for building a crypto community. Monetizing those channels, however, is difficult in the current regulatory climate. The deluge of fraud crypto projects makes it hard for even legitimate business to advertise on channels like Facebook, so HedgeTrade gives crypto influencers the same opportunities influencers in other industries have.
This is just the start - the platform is still in closed beta, and the team hopes to expand the feature set throughout 2020 and 2021. Let's examine their chances of success by starting with an analysis of the cryptocurrency market performance of HEDG, HedgeTrade's proprietary ERC-20 cryptocurrency token.
HEDG Cryptocurrency Summary
The total supply of HEDG is 1,000,000,000 HEDG, according to CoinMarketCap, the industry-leading cryptocurrency price tracking tool. This is a fixed supply, and the peak price so far was $1.82 on December 29, 2019. It began tracking on January 3, 2019.
No ICO was held for HedgeTrade. Instead, the project raised funding through private capital. The current circulating supply of ~290,000,000 HEDG will be increased by the time the project hits its full release. As it stands, the project's developers hold over 70% of the token supply, making them very rich, should HEDG become ubiquitous and easily tradeable among crypto markets.
HEDG may be purchased with BTC, and it's used to create and purchase blueprints. When a blueprint is created, the user determines how much HEDG to stake to create the contract. Users can then purchase the blueprint for 1/10 the staking price to essentially put money on whether you believe the blueprint will succeed.
If an investment prediction is correct, HEDG dividends are paid by the HedgeTrade platform to both the blueprint creator and purchasers. If the prediction is incorrect, the first seven blueprint purchasers receive a refund paid by the blueprint creator. This ensures a trust-based system where blueprint creators are held accountable for making bad predictions.
The more often you're correct with predictions, the higher your trust rating will go, and, when the platform is fully completed, the higher you'll rank on the leaderboard.
Nearly $1 million worth of HEDG is traded on a daily basis, and the tokens are tradeable on CoinTiger, STEX, Bittrex, HitBTC, and Livecoin. HEDG trading pairs include BTC and ETH.
As an ERC-20 token, HEDG may be stored on any ERC20-compatible cryptocurrency wallet, including Coinbase Wallet, Trezor, and Ledger.
Betting on (or Against) the Blockchain
Cryptocurrency is a major business entering the 2020s, but it's still not fully accepted by the mainstream. This is because the industry has been ravaged by accusations of price manipulation, phony pyramid schemes, and unlicensed companies avoiding financial accountability. It doesn't help that wild and rapid price fluctuations plague the industry. HedgeTrade hopes to bring trust back to crypto trading, while giving successful traders a road to audience monetization.
The project is based in Singapore and Canada and was created by Rublix. I spoke with Rublix CEO and Co-Founder David Waslen and Developer & Project Manager Rhys Boulanger about the project, and they have high hopes for its development. The team consists of a well-rounded background that includes finance, investment, and digital marketing.
Blueprints are at the heart of the platform, so let's discuss the layout and payouts.
A blueprint can be created by setting an entry and exit price. A chart is shown within the dApp showing historical price, and you can set blueprints to cover both a profit or loss. For example, if the price of BTC to USD is currently $8,000, and you think it'll go down to $4,000, you can create a blueprint to short the price for $4,000. A the same time, if you believe it'll jump to $12,000, you can set that exit point. Either way, the profit of $4,000 is a 50% profit over the starting price of $8,000.
When creating a blueprint, you choose a timeframe. For the purposes of this review, I was given 200 HEDG to bet and, after safely storing 100 HEDGE off the platform, I mostly bought other's blueprints to get an idea of how the platform's investors were doing. Because it's an early closed beta, there are only about 500 users right now, and they have a mostly decent grasp on the market. I had about a 50% success rate by choosing random blueprints with none of the due dilligence I would've performed if using my own money.
On the blueprint market, the trading pairs and profit margins are the only parts you can see. You won't see the entry or exit points until you purchase the blueprint, so you won't know if your 50% profit is a bet on the price going up or down. This means you have to essentially trust the investor you're backing, although as a backer, your stake is hedged either way.
If the entry and exit point are proven correct, HedgeTrade charges a 50% commission fee against the total amount spent on the blueprint. The remaining amount is paid to the blueprint creator. If the entry point is correct, but the exit point never hits, the payouts are reversed, and the blueprint buyers receive the profits, minus the HedgeTrade commission. In the event the entry point is never hit, or nobody purchases the blueprint, a 5% commission fee is refunded to the creator.
In future iterations, the company plans to further gamify the userbase through a multi-level marketing referral program and leader boards showing the top traders. Lower-ranking traders with incorrect predictions find themselves shuffled to the bottom to create more overall trust in the platform. The team also hopes to expand the underlying prediction market model to traditional investment tools, like stocks, along with gambling and sports betting platforms.
HedgeTrade Summary
HedgeTrade (HEDG) is a cryptocurrency investment platform built on the Ethereum blockchain. Over a dozen trading pairs are currently supported, including BTC, ETH, and LTC on the crypto side and USD, GBP, and EUR on the fiat side. The platform is currently in closed beta, and it reached into the top 50 cryptocurrencies by market cap within a year of its inception. HedgeTrade's success relies on these key factors:
HEDG is an ERC-20 token on the Ethereum blockchain. It's easily storable on ERC20-compatible wallets, and this will make it easier to exchange with other tokens across OTC platforms that support Ethereum.
HedgeTrade lets users deposit BTC to create HEDG, which is staked in a smart-contract "Blueprint" predicting the start/end value of a pre-defined market in a set period of time.
The Blueprint Market gives experienced traders a source of revenue generation, while inexperienced traders can piggyback on trading strategies of the pros.
With these pieces in place, HedgeTrade already has the attention of the crypto community. It's ending 2019 with healthy gains that already insure anyone involved against a declining market overall. If it delivers on its proposed expansion plans and attracts enough users (a feat that has thus far eluded even the most successful crypto dApps), this is a smart bet to diversify your crypto holdings.
Cryptocurrency can be risky if you don't know what you're doing. Check out our comprehensive coverage of over 100 of the top crypto and blockchain projects across Thought for Your Penny.