Blockchain technology is the heart of cryptocurrencies with distributed ledger technology as the vessel. If one of these are missing, crypto becomes an incapacitated mess without hash technology as a means to hide sensitive data and without DLTs to have that data available to any participant on the blockchain. Thankfully, blockchain-based DLTs give us more insight than legacy systems could dream of.
The Wonders of Wallet Technology
A lot can be gathered by checking blockchain addresses or wallets. For example, someone can check the full transaction history of those wallets to see the contents – what kind of digital assets it holds or what it did hold. It can also be used as a tracking mechanism which can have major implications both good or bad. These two benefits can be used directly to peer into others wallets and discover some insights. This would typically be a nightmare for legacy systems as it forces major players like banks to have their monetary associations out in the open. However it’s also a good thing as it reveals cash flow on the network.
For example, there is a way to track Bitcoin wallets that are over eight years old that helps us track extremely old addresses from some of the first users of the Bitcoin blockchain. One of the oldest wallets was used not even a year ago and flashed on social media. This activity tracking is helpful as it notices a shift in legacy activity where Bitcoin was relatively inexpensive and contains some of the biggest wallets. You can also track the “Satoshi Wallet” in case he/she/they decide to move the original funds.
You can do much more with tracking by using it for fundamental analysis. Companies like Santinent and TIEIO specialize in analyzing wallet data, allowing perceived thoughts on what wallet activity could mean. They can report when trading activity for Bitcoin or Ethereum can reach all time highs or two year lows, indicating who’s selling and who’s holding. They also track wallet creation volume for perceived interest by crypto newcomers.
It’s an amazing thing.
This is also taken to more direct interaction with wallets in what’s called social trading.
DeXe – a social trading platform – has also brought this same interaction to a whole new level.
Blockchain Based Social Trading
Decentralized Finance (DeFi) has exploded this year and many projects have developed direct engagement of personal finances without touching the finances themselves. Token Sets is a recent project that gained traction, allowing users to add their own strategies to the blockchain while others users can add their portfolio on the same network for copy trading based on a strategy. Melon Protocol is another example where users can copy strategies of hedge funds automatically.
But this hasn’t quite achieved true peer to peer copy trading. Strategies can be made easily, but most importantly the users of those strategies are not obligated to use them. You have no way of knowing how trustworthy they are until hindsight comes along.
DeXe is taking this much closer to a true decentralized experience and authentic to social trading. Their platform allows users to follow wallet activity like in the above example, but also to trade based on that activity, allowing for custom ways to execute these trades.
Wallet to Wallet (W2W) Copy Trading
DeXe is taking the decentralized ecosystem in a whole new angle to help users take advantage of wallet activity. While such tools like Santiment and Zerion let you analyze wallet data and projects like Token Sets let you mimic strategies, DeXe actually lets you copy trades based on direct activity from inside someone else’s wallet. This is a crypto first where users can make automated decisions directly from wallet behavior. DeXe goes a strop further than all other wallet monitoring projects in this regard – they allow wallet activity to be acted upon beyond mere observation. And unlike strategy based projects, DeXe allows you to trade on the best strategy of all – wallet activity – where conviction is met and acted upon.
This copy trading system takes DeFi applications like Uniswap, DeversiFe, and others and analyzes them with a DeXe smart contract and plugin. This allows DeXe to read wallet activity and users can copy and paste desired wallets onto the DeXe dashboard to read its contents.
The copy trading works very simplistically. You connect a wallet of your own to the DeXe network which then takes you to the DeXe dashboard. From there you can paste in a targeted wallet – which would be a friend or any address you wish to mimic. Once this is complete, you can select which assets you want to copy and add customizations like how much profit taking you want to execute. This is beneficial for users in many ways – it allows someone else to do all the heavy lifting for you, especially if you consider them a profitable trader. Second, this removes any reliance on copy trading on a manual level where trades and screenshots can be manipulated. Blockchain addressed cannot be manipulated and reflect real world activity.
A Shift to Blockchain Centric Applications
The crypto space has always been about trust through verification, meaning we cannot take someone simply at their word, although we’d like to. Monetary systems have been corrupted with dealings under the table and companies that we haven’t been able to trust for decades. Crypto makes this shift by checking the blockchain to make sure everything is fair game. Trading strategies and copy trading takes this same concept and lets you decide – should you follow a strategy or copy someone’s trade solely based on what they are saying, or should you follow what their wallet is doing? DeXe brings the “trust through verification” home to users through their W2W product and helps users take advantage of what we should be focusing on – the blockchain.
The Daily Chain
*Disclaimer – DeXe is our Media Partner and this content has been sponsored. The above article does not represent financial, investment or trading advice and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.