Here on El Dorado Exchange (EDE), we aren’t just wanting to be a normal competitor in the decentralized perpetual exchange market, but a leader in our own right. How we intend to do this is by exploring the untapped potential that decentralized social trading will bring. Offering just a top-tier leveraged trading platform wasn’t enough for our grandiose vision, what we saw was a place for not just the individual to make their wealth, but the individual acting for others to make everyone rich.

In our previous article, we discussed the concept for our Soul Bound Token (SBT), the ESBT. When designing ESBT, we weren’t just considering what benefits it can provide to individual traders who are loyal to our platform, via airdrop & trading fee discounts, but how ESBT can act as the adhesive to bring everyone together under one trading umbrella. In this article, we will discuss how we intend to piece together this intricate puzzle.

What is social trading?

To start things off and clear the room of any misunderstandings, let’s talk about social trading as a whole. To simplify it, it is effectively a system where a principal agent makes trades on behalf of others, who provide the principal trader with liquidity for the trades.

For example, in a typical platform like Etoro, as a principle trader, I would be tested and pass a series of trials to prove myself capable of acting as a principle trader to others. By doing so, it enables me to trade with other users’ money, splitting the income share between me and them. Users who use Etoro, but are uncomfortable with trading, can instead provide liquidity to me to enable my trading. From my wins, both the user and the principal trader share in the spoils of victory.

Pretty simple concept right? An experienced trader trades on behalf of an inexperienced trader and both walk away happy if profit is made. You see the potential here I hope, as not just traders are interested in this offering, but a typical user inexperienced with trading also can participate.

Here comes the hard bit, how is this done within the wild wild west that is the crypto space? Whilst the CEX Binance is pushing forward their Soul Bound Token called ‘BAB’ that acts as a KYC on-chain for each wallet, we decided we wanted to do things differently that embraces the wild wild west of crypto, not trying to civilize it.

This is where our ESBT comes into play.

Decentralized social trading is the concept of making an investment platform for a community. Right now, copy trading and social trading are the closest things to freedom funds. These two can be enhanced further when combined with blockchain technology. Just like the bank is considering using blockchain tech to reduce costs, funds, ETFs, and other investments will soon follow this trend.

Crypto social trading is a disruptive phenomenon that’s making ordinary investors think big in terms of consistent and profitable trades. Now, anyone can join the trading frenzy by learning from expert traders and following their unique investment strategies.

Social and copy trading tools are a relatively new phenomenon in the cryptocurrency investment scene.

In a nutshell, while the former allows you to engage with other traders on the investment site you are using — the latter enables you to mirror the positions of an experienced investor like-for-like.

In this article, we will discuss the ins and outs of EDE social trading.

What benefits can Social Trading bring to EDE traders?

Social trading has changed the dynamics of financial trading. Once dominated by hedge fund managers, the contemporary trading landscape is influenced by expert traders, automated systems and cryptocurrencies. If you’re still undecided, take a look at the following advantages and drawbacks of social trading. It will help you decide if EDE social trading is worth the hype.

Low Barrier to Entry

EDE social trading lets you generate positive ROI regardless of your knowledge of financial markets. Automation also offers a psychological boost so you can continue earning without worrying about the existing sentiments and market conditions.

Time Management

EDE social trading saves time and energy by letting others trade for you. There’s no need to sit in front of the trading terminal, managing trades.

Trading Education

EDE social trading is a great tool for learning new trading techniques and strategies. If you’ve spent some time trading financial instruments, looking at the trade history of an expert trader can reveal important information about their strategies, and how they control risk.

Enhanced Transparency

EDE social trading is transparent. Unlike hedge funds, signal provider services and copy trading, EDE social trading platforms offer in-depth and immutable blockchain information on each trade. As a result, it’s almost impossible to manipulate performance data.

Group Trading Power

Becoming an EDE trader is not only your way to show your individual trading prowess but a way to create a following from your existing network to boost your earnings! EDE social trading enables you to invite friends to join, and you get rebates/commissions from rewards, such as token airdropping and rebates.

What are EDE Social Trading functions?

EDE social trading includes fund pool, copy trading and built-in bot functions, however, those functions will be delivered to users one by another.

Principal Traders (Fund Manager)

Principal traders are available to open trading pools to allow other traders/investors to contribute funds to it. Principal traders make a commission from this trading pool profit.

Prior to the release of this system alongside the ESBT, as a proof of concept, the community will approve several influencers to become principal traders and compete against one another for a grand prize pool.

After this initial event and the proof of concept is tested, becoming a principal trader is permissionless and investors will invest in him based on their trading performance record. However principal traders can only operate their fund pool within the EDE protocol, they can not withdraw the fund from other investors.

For more details check the documentation.

Copy Trading

Copy trading is simply a part of the much larger social trading phenomenon.

Any traders can “follow/subscribe” to any principal traders. By introducing a control panel where EDE follower traders could define risk parameters. Follower traders could tell the system to stop the trade if it goes against their risk-taking appetite, similar to setting stop-loss and take-profit, irrespective of the strategy.

Trading Bot

A bot also could be an ESBT, for instance, if you like a grid trading bot, you can simply follow this account or invest in its pool.

Grid trading and other trading strategies, which help you buy low and sell high, can be implemented on EDE and enable constant trading done automatically 24/7 while you spend time doing the things you love with the people you love.

All of these features make EDE social trading a truly “social” phenomenon whereby everyone can benefit from the combined knowledge of the entire community.

How does ESBT achieve Decentralized Social Trading?

As mentioned previously, for social trading to work, there needs to be a trust system between who is capable of being a principal trader and who isn’t. Using the concept of the Soul Bound Token (SBT), we have created ESBT, the El Soul Bound Token. The ESBT acts as your unique identity within the EDE ecosystem.

We have discussed ESBT in previous articles, but as a quick recap, as users continue to use the protocol, their participation is rewarded with points. These points level an ESBT from 1–7. Each level of ESBT rewards the user with a trading discount fee, as well as eligibility for monthly airdrops.

Now, how does this enable our vision for decentralized social trading? Think about it, cause the answer is there. Each ESBT is unique for each wallet. Each ESBT tracks user performance & usage on the EDE platform. Higher level ESBT indicate active traders. Higher active traders with good performance indicate a candidate to become a principal trader.

Based on strict criteria of performance & ESBT level, we have created an on-chain credentialing system akin to that of other social trading platforms. Not everyone can become a principal trader, but everyone is capable. Active traders with high trading performance would have an incentive to trade with more liquidity. Inactive traders or inexperienced traders can trust the principal trader as there is an on-chain record of their performance attached to their ESBT.

We can say that the ESBT is the most suitable solution to solve the social trading trust problem and solves it well. ESBT enables KYC in a non-KYC and decentralized manner.

Is EDE Social Trading Worth Trying?

The concept of crypto social trading is very new compared to traditional trading models.

One reason to try EDE social trading is that institutions and millionaires have consistently relied on similar models to rack up profits through hedge funds. It’s only now that technology has allowed everyone to join the party.

The social aspect of EDE trading also lets individuals learn from others. Social signals generated by the community are similar to “insider news” that can propel hordes of people to get in on the trade at the right moment.

Apart from these similarities, there are many reasons why crypto social trading makes a lot of sense. EDE social trading, via blockchain technology, is transparent, enables everyone to participate, and allows individuals to actively control their investment portfolio while learning from expert traders.

So is EDE social trading worth trying? The simple and direct answer is yes!

The Bottom Line

Experts are already talking about social trading replacing other forms of investment. Due to flexibility and control, the model is a natural successor to traditional investment strategies. If you’re still hesitant, try a demo when we release this offering on our test net to get an idea of the endless possibilities that EDE social trading platforms can offer.

EDE stands not to be just a competitor, but a leader and we will lead through what we believe to be the next revolution for giving traders more power as we believe that trading is social!

Necessary Links

Join the community first: https://discord.gg/HEEtCBRjYp
Website: www.ede.finance
Docs: https://docs.ede.finance/
Twitter: https://twitter.com/ede_finance
Medium: https://medium.com/@ede_finance