I’ve wrote about and invested small amounts in quite a few ICOs recently but the Covesting ICO genuinely has me more excited than most. https://covesting.io
They’re planning on launching the first social mirror trading platform in the crypto currency market. Similar to etoro, the platform will involve letting investors watch and automatically copy crypto currency traders trades in real time.
The crypto market has grown massively in 2017, with the combined market cap currently above $140 billion. With developments in blockchain technology its made launching an ICO (initial coin offering) simple for start ups, which has led to there now being over 1000 coins available and dozens of new currencies launched every month.However there’s still massive room for growth in the market, the following companies market caps dwarf that of the entire crypto currency market still:* Alphabet (Google): $650 Billion* Microsoft: $566 Billion* Facebook: $495 Billion* Alibaba Group: $437 BillionThis shows that the market cap of Alphabet alone is 4 times the size of the entire crypto market, showing that there’s still massive room for growth.
Once people hear about crypto currency they’re left with the daunting task of trying to buy into it. Many of the exchanges have a terrible user experience, making it hard for users with limited knowledge to understand and also charge high fees. There’s also other problems, such as:* Needing to use multiple exchanges to change different currencies.* Different sets of rules on them.* Long, drawn out verification process.This has meant that getting involved in the market is too complicated for the average person, meaning that experienced traders coming from other backgrounds such as FX trading are the ones left to profit.Many potential investors also worry about the security of exchanges, with some of even the biggest exchanges facing problems in the past, such as the well documented Mt.Gox hack.
Digital asset managers also face their own set of problems:
Requires a lot of technical knowledge to launch their own platform and programming.Complicated legal issues.Having to market themselves, a whole new world for many.
The main issue is acquiring trust, in the crypto currency market this is even harder with so many scams going on due to the anonymity.Due to these issues, a lot of private traders continue to just trade by themselves with limited start up capital.With the market growing so fast, their whitepaper estimates that their will be 300 managed crypto funds in just 2 years time.The solutionThe new platform is aiming to connect investors with professional traders, whilst providing a more secure a trustworthy environment.
Every investor on the platform will have the option to diversify and lower their risk by copying up to 20 traders at a time.
Model managers will receive an 18% commission from the profits that their followers generate.
The platform will collect a 10% commission, meaning that investors will be left with a 72% commission, just for selecting which traders they wish to follow.
Model managers won’t be aware of how much capital is following their trades, only the amount of investors they have following them. Investors on the platform are allowed to use an alias as a screen name to conceal their real identity.
The new platform will allow any private trader to start their own career as a digital asset manager and compete with others for the best track record on the platform to entice more investors to follow them.
Mirror trading allows users to automatically ‘mirror’ trades that other traders make.Tradency claims that they became the first company in the market in 2005 by allowing users to copy their strategy to make trades.Mirror trading is often also called cop trading, however copy trading is slightly different as the asset manager often has access to the investors funds directly.eToro are one of the most well known social trading platforms with over 150 employees.
The platform will aim to be simple for investors to use. All they have to do is register on the website and fund their account with Bitcoin or Ethereum. Find the best traders on the platform by checking their track record and previous trades. Copy their trades- after the investor has selected the person they wish to follow. They can then choose the amount they wish to invest with each trader. All they need to do after that is monitor the results and unfollow anyone that they’re not happy with.
Covesting are aiming to have a prototype of the new platform ready by the 20th of November, ready for investors to check out before the ICO starts on the 24th.Here’s some of the features they’re aiming to have when they go live:
Registration: It will be easy to register by just providing an email address or logging in through a social media account.
Account and wallet: The new platform will have their own wallet which all users will be able to use. Each wallet will contain BTC,ETH and COV addresses. It will only be possible to use their own COV token to subscribe to traders.
Exchange fee: COV can be purchased from the platform, there will be a 2% fee charged to generate new tokens.
Model managers: Model managers will simply need to link their external exchange accounts to the platform using the API, then all of their trades will be posted on the platform for users to follow and copy.
Following trades: When an investor decides to follower a trade, all of the traders trades will be copied with a percentage of the investors funds that they can set.
Segregated accounts: To increase security the platform offers segregated account, the model manager won’t have access to an investors funds.
Un-following a trader: An investor can decide to unfollow a trader at any time, once they do so their funds will be transferred back to their account, minus any commission fees that have been incurred. If a trader decides to stop using the platform then all of the funds that were following them will be returned to investors.
Profit commission: Investors will receive 72% of the profit that their capital makes, an 18% success fee is given to the model manager and a 10% fee is charged by the website.
The new website will use the COB token which is ERC20 token built on the Ethereum blockchain. COB token will be quick and easy to transfer between ERC20 wallets.The token will have a total supply of 20,000,000, 1,500,000 will be sold during the pre sale, 15,000,000 sold during the ICO, 2,500,000 distributed to the founders which will be locked in a smart contract for 3 months, with the final 1,000,000 distributed to advisors and bounty participants.The token will be used by investors for them to be able to follow traders, this will create a demand for COV which will depend on the success of the new website.COV will be generated by smart contracts when an investor purchases them using ETH or BTC which means that the new currency will be backed up by Ethereum.
Covesting are projecting that by the year 2020 there will be $50 million of capital copying trades on the website which should dramatically increase demand for their token.At the launch of the ICO the team will aim to recruit established funds and well known traders on to the website. They’re aiming to have 5000 members by the end of 2019.
The new company will have 2 main revenue streams:
Exchange commission: Every time a user wishes to purchase COV they’ll be charged a 2% fee.Platform commission: 10% will be charged on all profits that investors make by copy trading.
Instead of issuing dividends which create additional regulatory problems, The team is planning on using 50% of the revenue generated on ‘burning’ tokens, this means that tokens will be bought from exchanges and taken out of the available supply. This should then increase the value of the token.
October 2017: Pre ICO
November 2017: ICO and platform prototype.
December 2017: Finalizing development of the website.
January 2017: Exchange listings of the new COV token.
February 2017: Beta version of the website launched.
March 2018: Continuing to acquire new investors and traders to the website.
2019 and beyond: Goal of having over 4000 users of the website
* Dmitrij Pruglo, Founder & CEO: Has 12 years of experience in equity, derivatives and foreign exchange trading. Previously worked for SEB bank and Saxo bank.* Timofej Voronin: 12 years of trading experience, worked with Dmitrij at Saxo bank. Also worked for Swedbank, Orion securities and Argo traders.* Sergey Sevantsyan, CIO,CTO: Has 20 years of experience in the IT industry, founded the company IBW. Consultant and project manager crypto funds and previous ICO’s
The first opportunity to purchase tokens will be during the pre sale which will run from the 20th of October until the 19th of November. Buying tokens early will be at the discounted rated of 1 ETH=300 COV.Covesting state that they have the funds available for development but the funds raises from the initial sale will allow them to grow their team and guarantee that the prototype website will be ready before the official ICO.The pre sale goal is set at 2000 ETH with the max cap at 5000 ETH.The funds raised will be split, 65% for the product development team and 35% for additional marketing.
Dates: November 24th until December 24th
Price: Starts at 200 tokens per ETH for early investors and declines to 130 per ETH.
Hardcap: Set at 100,000 ETH
40% Development team: The team will consist of 15–20 engineers.
25% Marketing: Such as digital marketing and attending exhibitions etc.
15% Strategic partnerships: Mainly spent on API integration with other exchanges.
12% Operational: Employees excluding developers and office space etc.
5% Legal.
3% Owners and developers bonus.
Companies such as eToro have proven the social trading concept works well. With the crypto market growing so fast and attracting a lot of newbie investors it seems like a perfect market for mirror trading to thrive.I’ll personally be buying some tokens during the pre sale but I’ll wait until the ICO to make the bulk of m purchase so that I can see the working prototype.Website: https://covesting.ioWhitepaper: https://covesting.io/Covesting_White_Paper.pdf
