How Copy-Trading Can Help Investors Catch Up With The Decentralized Crypto Market

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Decentralized Finance (DeFi) is getting harder to ignore. It’s now responsible for locking in sums marching towards $200 billion and higher. 

The total value locked (TVL) in DeFi has skyrocketed in the last year, and the number of new wallet addresses interacting with DeFi protocols increased by 65% in the first half of the year on one blockchain alone. Adding to these figures, MetaMask, arguably the most popular crypto wallet in DeFi, reported a little over 10 million active users in August 2021, and these user numbers represent an 1800% rise from 545,000 active users in 2020. 

This is, by all means, explosive growth for DeFi, but the estimated number of users who own some form of cryptocurrency worldwide stands well north of 100 million people, and DeFi protocols are nowhere near logging this many participating addresses. One must conclude that the potential growth for DeFi is still nowhere near meeting its potential.   

As a consequence, a wealth of market synergy lays dormant as the booming DeFi market waits to attract new users looking for the next place to make their biggest returns on investments. Therefore, it becomes increasingly necessary for projects to bridge the gap between DeFi and the holders of untapped capital. 

How Copy-Trading Can Bring New Users to DeFi

Copy-trading has historically served as a way to educate new investors. It’s a powerful tool that allows users to follow the buys and sells of experienced traders in order to learn how markets work. However, copy-trading, in its current form, exists primarily as a centralized service, and this introduces several inefficiencies when applied to trading crypto.  

A centralized copy-trading platform often operates off of the blockchain. By operating off-chain, these centralized platforms can juke the stats of their traders and charge hidden fees that eat away at an investor’s profits. On top of these fees, platforms often have users sign a contract for difference (CFD), which means users don’t own the crypto they are trading, but instead, the platform holds onto it for them. 

In this scenario, the middleman acts as a keeper of information, takes enormous profits, and if the middleman goes out of business, investors have no way to recoup their assets. This runs counter to the principles of DeFi, where transparency is a given, revenue is redistributed to users within the community, and users maintain custody of the crypto they own. 

Consequently, the next step towards building a copy-trading platform that works in line with crypto’s decentralized values should be one that utilizes the power DeFi through a decentralized application (dApp).

Decentralized Applications Bring Fairness to Finance

The origin of dApps is traced to the second-generation blockchains that were developed after Bitcoin. These blockchains, like Ethereum and Binance Smart Chain (BSC), are considered Turing complete systems that can run programs like a computer. 

The programs that run on these blockchains are called dApps, and they operate on the same secure, transparent, and immutable properties that power blockchain technology. Blockchain dApps are dependent on smart contracts, lines of immutable code executing “if, then” logic that create a level playing field for DeFi’s users. 

This code cannot be altered by anyone once it is launched, so the rules of the contract are the same for everyone. This reliance on code means the DeFi community is shielded from something like the Gamestop debacle, where a platform unfairly altered its terms and conditions without warning. 

FNDZ Supercharges Copy-Trading with the Power of dApps 

Smart contracts and dApps might sound rather technical, but they can be outfitted with user-friendly interfaces, so anyone can use them to interact with DeFi. As a result, copy-trading dApps like FNDZ, a fully decentralized copy-trading platform, are lowering the barriers to entry for DeFi through an easy-to-use platform linking users to experienced traders.

FNDZ allows users to follow over 100 different traders handpicked for their ability to succeed in DeFi. Each trader sets their own transparent fees for following their trades (at a maximum management fee of 3% and a maximum performance fee of 30%), and data concerning a trader’s PNL (profits and losses) can be accessed through FNDZ’s trader dashboard. 

FNDZ’s Operation & Tech Lead Valentino Cremona explains, “Since PNL is verified by on-chain data, following a trader’s ups and downs can be done with the highest degree of certainty. Investors who follow traders through FNDZ retain 100% custody of their assets as they learn how to trade on DeFi’s most trusted decentralized exchanges (DEXs).” 

Robin Ubaghs, Marketing & Growth Lead at FNDZ adds, “We are confident that copy-trading dApps like FNDZ could be the starting point of DeFi’s mass adoption.”
To encourage new users, FNDZ is running a year-long liquidity mining program on PancakeSwap. A total of 700,000 $FNDZ tokens will be distributed to liquidity providers who help FNDZ build long-term value for its DeFi ecosystem.

Image Sourced from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.