Cryptoassets continue to attract increasing amounts of investment as the entire world begins to understand in regards to the technology behind the assets. Actually, the data show the cryptocurrency market recorded 600% growth year-to-date and is worth $2.8 trillion at the time of writing. However, as large financial institutions such as Microstrategy and Grayscale continue to invest considerable amounts into cryptoassets, price volatility can also be on the increase. This increasing volatility presents a challenge for amateur investors.
Mercor Finance is the first and only exemplory instance of a decentralised automated copy trading platform. Mercor aims to democratise the entire world of copy trading by giving investors the capability to invest via user-created trading strategies. How a Copy Trade Works This grants individual investors use of similar tools which can be commonly used by those large institutional investors. But before we dive into Mercor’s solution, let’s have a closer go through the definition of automated copy-trading and why it is the future of investing, both in the crypto space, and the mainstream financial sector.
Mercor Finance: A Closer Look
An automated trading strategy is a set of rules that determine when to get and sell assets. When those rules are met, orders execute. This really is defined as algorithmic trading. It has several advantages over investing manually. First, it may operate 24/7 with little downtime, allowing amateur investors to fully capture the absolute most value out from the 24/7 crypto asset market. Second, automated programs never deviate from the guidelines set in the trading strategies, theoretically making no mistakes. Finally, human emotion is never involved; a trait which can be likely the reason for many to reduce their entire portfolios.
Mercor allows developers to generate new trading strategies and customize those rules at will via the Mercor dApp’s developer dashboard. Investors using Mercor can invest funds into those strategies via the Mercor dApp’s investor environment.
Currently, there are 60 trading strategies which can be available for users to invest in. Many of these have now been produced by high-level developers employed in investment or software firms, ensuring that the trading strategies have expert influence. Mercor Finance’s dApp is currently deployed on Binance Smart Chain. The project’s native token MRCR grants holders increased use of the Mercor platform, with respect to the quantity of MRCR they stake via the Mercor dApp.
Users purchase MRCR to invest in the most used / highest performing algorithms. Naturally, as an individual base increases, demand for use of these algorithms increase together with a consequent influence on the demand for MRCR. Moreover, Mercor includes a unique staking mechanism, unseen in the DeFi space before and plans to improve the utility of MRCR further in the future.
Upon launch, the Mercor dApp greets investors with a pleasant page containing links to some of the core elements of the protocol. This includes an academic portal, as well as charts displaying the recent performance of some of the trading strategies available on the dApp. On the dApp’s sidebar, the ‘Buy MRCR’tab offers users the capability to directly swap between BNB or BUSD and MRCR, or buy BNB with fiat. The ‘Stake MRCR’tab allows users to stake any MRCR tokens they hold in order to get access to higher tiers of functionality on the dApp. Stakers of MRCR may also earn an annual percentage yield as high as 20%, paid in MRCR.
More details on the benefits of the different tiers of access and how many staked MRCR required to gain access to those tiers could be on the ‘Tiers’page of the dApp.
Creating Algorithmic Success
The ‘algorithms’tab allows investors to gain access to all the trading algorithms created on the platform and their details. Investors can easily see everything they have to know to effectively manage their automated trading strategies and portfolio. This includes their real-time trading history, profit or loss percentage, the assets it trades between, the developer who managed to get and the current level of equity managed by it. The algorithms page is but among the ways Mercor demonstrates its emphasis on transparency, a key feature lacking in other automated trading strategy protocols.
The users dashboard provides information on the performance of the investments, such as their total amount invested on Mercor, total earnings from those investments and the current value of the portfolio. Finally, Mercor‘s comprehensive educational portal, containing user manuals and other information for both investors and developers, as well as their social networking profiles, could be accessed via the dapp’s sidebar.
When creating an algorithm, developers first give it a few key parameters like a title, the set of assets it trades between, a short description of how it works and some category labels. Algorithms created on Mercor are deployed as smart contracts to the BSC blockchain. After deploying a Mercor algorithm, the developer is given a secret API key allowing the algorithm to communicate with Mercor’s API. The developer can then use Mercor’s Python package together with the API to create their algorithm.
Once an algorithm is deployed and ‘live’on the Mercor platform, the algorithm’s developer can track its performance via the dapp’s developer dashboard. Your home screen of Mercor’s developer dashboard shows developers their total earnings from the algorithms they’ve created, the full total level of equity managed by their algorithms, the full total quantity of investors with funds inside their algorithms and quantity of created algorithms which can be ‘live’on the dapp. There is also a table on the developer dashboard, just like the investor dashboard, which displays a few key statistics on the performance of every algorithm that the developer has created.
The team behind Mercor has been hard at the office establishing partnerships with investors and development teams alike, with firms such as BlockBank, Ramp and GD10 Ventures. Developers such as Bot Capital, Moonquant Capital and LX Trading are actively developing on the platform.
What Sets Mercor Apart?
While there are always a few other projects attempting to tackle decentralized algorithmic trading, Mercor Finance has several advantages. First, Mercor includes a first mover advantage in this space. The team behind Mercor Finance have now been trying to fix this issue for longer than some other development team, giving them intricate understanding of the difficulties in the area.
Second, Mercor creates an appealing social dynamic, allowing investors to touch base to developers. This creates rapid iteration, allowing algorithms to be fine-tuned for maximum performance.
Finally, the performance of some of the algorithms open to investors on Mercor is noteworthy. Despite recent price downtrends across many crypto assets, the most truly effective performing algorithms on Mercor Finance have continued to generate positive returns for investors.In fact, several single-pair strategies have achieved as much as 70% return on investment within a single month, with multi-token trading strategies reaching over 1,200% annually.
Combined, the innovative platform is already positioning itself at the forefront of development in the automated copy trading space.
Mercor is Developing at Pace
Mercor Finance has been on a developing spree in recent years. Their roadmap includes upgrading existing features within the Mercor dApp, increasing the utility of the MRCR token and partnering with an increase of organisations to further increase Mercor’s exposure in the DeFi space.
Mercor aims to incorporate the functionality for developers to generate multi-asset pair algorithms, essentially allowing developer created indices. Moreover, the MRCR token will become available via more decentralised and centralised exchanges, rendering it possible for traditional market assets to be added into Mercor algorithms.
With one of these goals in your mind, Mercor Finance is proving to be a pioneer in both crypto investing world and the algorithmic trading world.
For more on Mercor’s innovative service, native token and how it is disrupting the cryptoasset investing world, look at the dApp here.