Firstly, on behalf of the whole Mercor Development Team, I would like to thank our community for its support over the past months. It is amazing to see all of you follow our progress and sign up to become part of the Beta. Mercor has the goal to democratize algorithmic trading, but we can only reach that goal with your help. We appreciate everyone who believes in us and we are looking forward to seeing you all utilize the platform.
As CTO, I have been working day and night together with my team to finalize the beta launch. Those of you who have taken part in the Early Staking program will receive access on the 1st of September. We are looking forward to the feedback you will provide us, this feedback is essential for us, as we aspire to create a product that brings value to all of you and introduces you to a new way of trading. I would therefore like to emphasize that all feedback even the smallest is much appreciated.
In this article, I would also like to explain from my perspective why I think the product we are developing is unique and can truly revolutionize algorithmic trading. Furthermore, I am looking to provide you with technical details as to how to use the beta.
In the past few weeks and months, we have reached out to many algo traders and developers from both the crypto as well as the traditional industry. Interacting with these talented developers has made me realize that the Mercor platform is now needed more than ever. Seeing the reactions of these individuals whenever we demo and show how easy it is to set up an algorithm through our platform is very fulfilling. Some of these developers have been waiting for years and spent tens of thousands of dollars for their legal approval which enables them to do (often very limited) algo trading, we enable them to create and market their algorithms with a push of a button (well maybe two including the MetaMask confirmation 😉).
Most developers cannot afford to spend big sums of money or to wait that long. Years back, as a student at my university in The Netherlands, I started to develop trading algorithms myself. It took me quite a while to get the hang of it and even longer to find people willing to trust me with their hard-earned money. This made me realize how hard it must be for people around the globe without any personal funds or who do not possess the network necessary to go through the whole process.
“A click on a button will make any trader into an algo trader”
Traders willing to invest their money in algo trading might be convinced by some big hedge funds or shady “trading gurus” telling them their money will be invested through trading algorithms. In almost all cases, this is a lie. Hedge funds have very strict restrictions, charging extremely high fees and demanding minimal investment of hundreds of thousands of dollars. All whilst keeping their algorithms and their actual results secret. Thus these “gurus” can claim as many fees as they deem fit as there is no decentralized place to really verify the past behavior and performance of their algorithms.
Mercor gives traders the possibility to verify the performances of algorithms, invest any amount with a clear and transparent fee structure. Again, just a click on a button will make any trader into an algo trader.
Of course, most algorithms do not outperform the market and there is nothing wrong with that. We do not live in a fantasy world and we understand our platform will not only contain winning algorithms. Mercor aims to be a platform that enables all people to participate in algo trading, either as an investor or developer. In that sense Mercor is not only the first decentralized algorithm marketplace but actually aims to be part of the decentralized philosophy, enabling all people to access something inaccessible before.
So just how decentralized is the Mercor Platform? The term decentralized has been used quite a lot in DeFi, but often this is an empty phrase just used as a marketing tool.
“Just mentioning decentralization or actually being decentralized, that's a big difference”
The few ‘decentralized’ algo marketplaces in the crypto space function by connecting your account with your account on a CEX, enabling algo traders to trade with your funds. This is by definition not decentralized as both the CEX as well as these platforms require personal data and have a central authority on every transaction. Just mentioning decentralization in your marketing expressions or actually being decentralized is a big difference.
“No sharing of personal data, no interaction with any entity, just pure decentralization, something we are proud of at Mercor.”
We have created the first truly decentralized algorithm marketplace. In order to directly invest in an algorithm or create an algorithm, you only need a wallet and nothing more, offering total anonymity. No sharing of any personal data, no interaction with any entity, just pure decentralization, something we are proud of at Mercor. The sole individual that can withdraw your funds from any algorithm is you and only you, as it should be. The developer, in control of the algorithm, can only swap your equity from one token to another, hopefully generating profit. Also, the Mercor employees are in no way capable of interacting with your funds or influencing the algorithms.
I would like to emphasize that this blog strictly regards the functionalities of the Beta, and some aspects are still being finetuned. Therefore, towards the main version, many aspects might change following the feedback received during the beta.
Our platform is divided into two main parts, the developer and the investor environment. Both environments can be accessed by anyone as of the 27th of September, early access will be granted as of the 1st of September to all participants of the Early Staking Program.
First, I would like to explain a bit more about the algorithms on our platform before diving into the separate environments and their functionalities.
So, what exactly are the algorithms that users will have access to on our platform? Each algorithm on our platform will have a unique smart contract which we call a ‘TradingContract’. These contracts are in fact just smart contracts from which you can stake and withdraw your funds. The big difference between these contracts and regular ‘staking contracts’ is that instead of your absolute investment being registered the fractions of the pool in the contract is registered. This pool consists of all previous investments from all investors into this algorithm. This means that you ‘own’ a certain percentage (relative to the total pool) of the tokens on the smart contract.
So where does the algorithm come into play? The developer receives an API key with which it can communicate through our API to the smart contract. With this API the developer can swap tokens in this pool. In this way, if the algorithm is effective it will grow the total value of the tokens in the smart contract and your investment will increase at the same rate.
And what if you want to withdraw your funds? The TradingContract will swap your equity to BNB and deposit it to your wallet. Following your withdrawal, the percentages in the smart contract will be updated to correspond to the new distribution of the pool inside the smart contract.
So how can you invest in these algorithms?
The investor environment will be the part of the platform which enables users to invest their funds in algorithms showcased on the platform.
The investor environment gives investors an overview of all algorithms available on the platform. All necessary details of these algorithms will be provided, and the functionality to invest or withdraw from each algorithm is nothing more than a single transaction to a TradingContract. Every developer can create a profile for themselves and write descriptions about their algorithms, explaining the approach and functionalities of each algorithm.
All investments can be monitored, and your total portfolio value will be shown in real-time.
The developer environment enables developers to create algorithms by deploying their own smart contract and subsequently communicating with it via our API, enabling the developers to give trading orders to the TradingContract. During the deployment of such an algorithm, the developer will set its details, such as the trading pair, max investment, and fees. Further information such as a name and description can also be completed at this stage. Once deployed the developer will receive an API token with which they can communicate to the API.
A dashboard and an overview of all algorithms will give the developer the capability to monitor the behavior of all their algorithms.
I hope this blog has given you a general overview of the functionalities of the beta platform and the uniqueness of the Mercor platform. For any future questions don’t hesitate to ask questions in our community channel. The development team and I are extremely excited to finally see our community use and benefit from the Mercor platform.
All the best,