WHAT IS THE TRADE.IO TOKEN AND SHOULD WE INVEST?
Up on my token watch list this week is a cryptocurrency called Trade.io traded as TIO. I rate the coins on a scale of 1 to 10 on the following categories.
. Innovation and concept
. Trust and transparency
. Team behind the token
. Quality of the white paper
What is Trade.io ?
Trade.io is a decentralised liquidity pool and trading platform. Trade.io has recently held a successful ICO raising just over 31.365million USD to fund the project. Their white paper can be found at https://trade.io/whitepaper/EN.pdf
The company behind it aim to release a decentralised trading platform and liquidity pool whereby token holders can pledge their tokens to provide liquidity for the platform as a whole. The users who provide the liquidity will be rewarded with dividends as a percentage of the profit. Users on the platform will be able to trade both crypto and traditional stocks, fiat currencies and indices over a block chain based platform. We expect the form of the trading platform to be based on MT4 (meta-trader) which is currently the industry standard software for Forex traders.
As a crypto trader I had difficulty trying to find a platform to trade with charts and graphics as powerful as those I get on the standard meta-trader platform. I am currently using Bitfinex. Their charts are some of the best out there. However, the drawbacks of Bitfinex are that new traders are required to make a 10000 USD minimum deposit and it is a centralised platform with a single point of failure. Basically my trade funds are at the mercy of the owners of the platform. Let's see if the TIO platform can set out to compete with the traditional exchanges.
Holders of the TIO token will be able to execute their own trades over the platform, while simultaneously making a share of the profits from the platform. Trade.io aims to cut out the third parties such as stock brokers, banks and financial institutions to deliver a genuine trading platform for traders, without all these third parties making profit at our expense. If the new Robin Hood app is a competitor to Coin Base, TIO could be a competitor to the major more advanced crypto trading platforms such as Bitfinex or Kraken.
The platform holds potential for business owners to tokenise their companies on a trade exchange. This is great news for medium sized companies where before, holding and IPO or floating on a stock exchange would have been practically impossible where now it may be possible to run an ICO through the trade.io platform.
All this is great in theory but how does the platform actually make money for the users?
The trade.io platform intends to make profit from the following sources
I. Spreads: The spread is the difference between the highest price (Bid price) someone is prepared to pay for an asset and the lowest price (Ask price) a trader is prepared to sell it for.
II. Commissions: The trading exchange typically takes between 0.25% and 0.5% from the buyer and the seller.
III. Aggregation: Orders can be matched to with one another to create bulk orders, potentially moving the price down by increasing buying power.
IV. Risk positions: Risk can be managed by the platform owners by taking an overall position based on all the open positions in the market place.
V. Margin interest: If someone wants to increase their bet on a position, they can borrow capital and the owners of the platform can take a counter position to hedge against loss, while making a commission.
VI. Transaction and placement fees: The owners of the platform can make money by assisting companies in getting tokenised.
The daily profits are shared amongst the token holders at a rate of 50/50 for the owners of the platform and the owners of the tokens.
My early concerns that the traders may loose money have been satisfied by the payout structure. Dividends are paid daily but will only be paid in the platform makes profit. If the platform makes a loss on one day, there will be no dividend the next day until the losses are recouped.
It is a 2500 token buy in to the liquidity pool and the dividends that token holders receive are calculated on a sliding scale according to how much original capital was staked.
What problems does trade.io solve?
The reason I choose to invest in the ICO was because of their mission statement and abstract. It is a true disruptive technology in that not only does it utilise blockchain which is intrinsically disruptive, but it has the potential to genuinely disrupt the market on trading platforms. They pretty much repeat everything I said in my own mission statement about the state of the markets and why they are pretty much begging to be disrupted in the wake of the 2008 global economic financial crisis.
The company behind trade.io operates in the mainstream financial sector, their political standpoint seems to be in line with the prevailing politics of the crypto community, unlike companies like Ripple, which is in my opinion a scam coin which was pre mined, is centralised with a single point of failiure, can hardly be describes as a currency, serves only to make the Director of Ripple richer than he already is and serves the banking sector which has traditionally only tried to stop the crypto revolution from gathering momentum. In contrast , trade.io comes from a genuine standpoint and is clear from the white paper what principles and values the organisation stands for. In recent years we have seen the near collapse of the European Union and major financial institutions such as Royal Bank of Scotland and Northern Rock. As Trade.io puts it in their white paper........,
''banks today are becoming bigger and more opaque than ever before and is trading and reporting still lacking the necessary transparency. As Arthur Levitt, the former chairman of the SEC noted
to Forbes Magazine just a few years ago, none of the post-2008 remedies have “significantly
diminished the likelihood of financial crises”.
On top of the lack of transparency and seeming disregard for investors, a whole ecosystem of
banks, advisors, markets and record keepers are extracting enormous fees from both investors
and companies. On top of the inefficiencies created by high fees and low liquidity, existing trading
platforms lack transparency, third party verification and often suffer from conflicts of interest. In
short, little has changed since 2008.
Given the unfairness, inefficiency and disappointment caused by a lack of change, forward
thinking traders and brokers are looking for a solution that will disintermediate and commoditize
today’s status quo – a revolutionary technology upon which to build the next generation platform
for exchange trading''
Here we can see that the team behind the project are sympathetic to the consensus amongst the crypto community, which is another reason I see the token as a good investment. The more people who like the ideas and concepts behind the token, the more it will sell out.
Who is behind the project and who are their competitors?
The project is managed by a strong and experienced team based in the crypto valley of Zug in Switzerland. I have done some background checks and there seems nothing untoward about the team. Early adopters of the platform include Primus FX based in the UK and of a reputable high profile.
Although the project is genuinely innovative, they are not the only people doing this. Major competition for this market comes from Qash, and Naga. Qash already has a margin trading platform and the Qash token is already being traded on Bitfinex. Similarly the Naga token has a strong team behind it, has trading apps already at market and is floated on the German stock exchange already. Although the TIO token is in its infancy compared to other similar platforms I think they have a stronger future. I will be following their progress closely and will move my own trades on to the platform as soon as it is ready.
The principles behind the TIO project sound great but I will be looking at them closely over the coming months to see how they are getting on hitting their milestones. Lets hope they meet their milestones and targets since the principles behind TIO seem to be more in line with the crypto community than their competition.
Should I invest?
As a strategic ICO investor and crypto trader, I give the following rating
.Innovation: 8/10
.Transparency: 9/10
.Team: 8/10
.White paper 9/10
Total Rating = 8.25/10
At the current rate, as a medium term investment the tokens should rise in value. I bought early because it is 2500 token buy in to enter the liquidity pool. At the time that was 2500 USD . My reasoning was that it was best to invest early because if the idea works and the tokens start to produce dividends , their value will go up . The token price took a bit of a dive in the recent blood bath but nothing that wasn't expected in the current market sentiment. In the wake of regulatory talk in Korea causing a slump in the cryptosphere, it may be a good time to invest fiat currency. In conclusion I think that the TIO token is a good investment. I look forward to being able to place trades on a decentralised platform
This article is for information purposes only and I do not give financial advice.
Copyright : CryptoLab Foundation.