Imagine a future where corporations and artificial intelligence dominate the market; where individual traders, developers, and investors are locked out and outcompeted for the opportunities, resources, and ultimately the profits that they seek for their investments and their labor. Anyone that has spent significant time in the world’s markets can confirm that this future has already arrived.
Large institutional investors and algorithmic trading firms have a monopoly on the current markets. As an individual, you have little choice but to accept your disadvantage or become a cog in the machine.
Here at Mercor, we aim to radically change this dominance. We aim to democratize the algorithmic trading market. We will provide its users with the instruments to develop and invest in what is known as the black box of trading — algorithmic trading. On the one hand, we supply developers with data and licenses to develop their own algorithms in the Mercor environment, on the other hand, we make investing in algorithmic trading accessible to everybody.
We believe in the power of creative people, students, and hobbyists to create value with their self-built algorithms. We promote teamwork and the creation of advanced (AI) algorithms. We hate to see brilliant ideas and pure creativity go to waste. We understand that there are many talented individuals that are currently working for institutional investors, which could use the Mercor Environment to make magic happen. With the power of the crowd, we create an environment in which no individual is restricted by expensive data or high entry barriers. We are supplying ordinary people with the tools previously only available to a handful of institutions.
“The least scary future I can think of is one where we have at least democratized AI… — Elon Musk
Algorithmic Trading in the Crypto Markets
While the dominance of algorithmic trading is not yet as strong in the crypto markets as their traditional counterparts, the consensus is that crypto markets are moving in that direction, playing into the hands of large institutional investors currently entering the market.
Within crypto, there is an increasing emphasis on passive income. Mining, the first “passive” income that’s been around since the inception of Bitcoin, staking, and now Decentralized Finance (DeFi) with its lending platforms and yield farming, have captured the interests of market participants. Investing and automatically receiving interest via algorithmic trading (for a modest fee) is very relevant.
Unlike traditional markets, crypto markets are accessible 24/7, every day of the year, and are well known for their extreme volatility, low fees, and barriers to entry. The ability to respond quickly and without emotion at any time is critical to a trader’s success. Even in bear markets, algorithmic trading is successful, which means that passive income can be generated while most, if not all, cryptocurrencies are losing value.
Why on the Blockchain?
Mercor Finance is a decentralized algorithmic trading platform where trades are executed on decentralized exchanges by utilizing smart contracts. This environment provides many advantages over traditional market algorithmic trading.
As there is no central authority on the platform, crypto assets remain in the user's hands. Trades are initiated through signals coming from the algorithm storage. These signals will communicate with a blockchain oracle that calls upon the smart contract on the Binance Smart Network. The smart contract performs the trade directly on a decentralized exchange. The developer and transaction fees are handled by the smart contract. In addition to security, this setup provides a great deal of privacy to Mercor’s users.
The decentralized blockchain environment levels the playing field for everyone involved. No one is refused entry and there are fewer costs and regulations than in a traditional market environment. Also, as all transactions are immutably stored on the blockchain, all trading activity is easy to follow and assess.
Advantages of Using the Mercor Platform for Algorithmic Trading
Traders and investors face several problems when attempting to invest with the help of algorithmic trading tools. Comparing and backtesting algorithms is extremely difficult, making it nearly impossible to objectively study different algorithms. Being forced to rely on biased information originating from the creators or parent company is less than optimal. Fees and subscriptions are often extremely expensive, demanding high minimal investments, limiting accessibility to only certain individuals or companies. In addition, entering the algorithmic trading market typically requires a lot of knowledge.
The Mercor platform addresses these issues in a number of ways. As algorithms are created, they are audited by the Mercor security and fraud module. If approved, they will be encrypted and saved in the algorithm storage. Developers can then test the effectiveness of the algorithms using the Mercor platform backtest environment. Developers will also have a tier available for which they can host their own secured container which will communicate with the Mercor API to trigger smart contract trades, this gives the developer the possibility to not share their code directly with the platform.
In regards to fees, the Mercor platform provides free access for both developers and investors. Developers will be charged in Mercor Tokens (MRCR), based on computational power used and total trading volume. Traders will be charged competitive trading fees. We will be committed to a fee structure that is fair, straightforward, and as transparent as possible.
To lower the barrier of entry, almost no knowledge of algorithmic trading is required to begin using the platform. The platform has an academy module that includes a demo environment where users can practice and perform fictitious trades. This also allows new users to test the platform without any commitment. Developers can also create academy modules for more advanced trading algorithms and strategies.
The MRCR Token — Backbone of the Mercor Platform
Mercor aims to be a platform that connects Python-based algorithms with the crypto market and makes them available to the public. Both the investors and the developers will need MRCR tokens to make use of the Mercor platform.
Developers will earn fees by deploying their algorithms onto the Mercor platform. The amount of fees gained by the developer will be calculated by a capped variable fee that is set by the developer. We do this to create a free market effect, in which the best-performing algorithms can demand the highest fees.
Developers can stake MRCR tokens in tiers that will allow them to unlock tools that can be used to create more advanced trading algorithms. Furthermore, developers can use MRCR tokens to purchase additional storage and computational power to train and run their algorithms in more advanced environments.
Investors need MRCR tokens and a native coin to invest in an algorithm. The MRCR tokens need to be staked and depending on the amount staked and the corresponding tier, certain benefits will be available. Once an investor chooses an algorithm, a fee will be applied which will be used to pay the developer fee.
The Mercor platform will have two main burning mechanisms to create a stable coin value. Early staking withdrawal burning will be imposed on traders who withdraw their MRCR from the staking contract. Transaction fee burning will occur as a fee that includes the spread of the exchange and a Mercor platform fee. This fee will consist of a percentage of the total value traded by the algorithm. 25% of all trading fees will be used to buy back and burn MRCR tokens. MRCR token holders may also stake MRCR tokens to receive staking rewards and benefits.
In today’s global market, corporations and institutions — those with the most money and power — have access to the best algorithmic trading tools. Mercor aims to disrupt the status quo using blockchain and smart contracts to democratize algorithmic trading so that average investors and developers alike can benefit from those same tools. The MRCR token will be the key to unlock the features of our trading platform. We are excited to introduce algorithmic trading to cryptocurrency investors, and to see what the network effect will bring as the number of developers and investors grows exponentially.