Copy-trading

Copy-trading is the main feature on the Covesting platform. As mentioned in the introduction, copy-trading allows you to mirror the portfolios of knowledgeable traders automatically.

Each trader on the platform has the option to make their profile public — in doing so their profile displays portfolio performance, asset allocation and trading history publicly. Traders can also provide a boi/summary of their trading strategy along with links to their personal social media accounts. Lastly, there is an option for investors to message traders directly from their profile if you happen to have any questions.

As an investor you can browse as many trader profiles as you wish. After finding a trader that meets your requirements following them is as simple as clicking a button and allocating an amount of funds from your COV holdings (COV is the platform’s native token).

What happens next?

After choosing a trader and allocating some tokens, your COV is automatically liquidated to match the traders current positions (minus a 2% following fee).

To illustrate this process let’s imagine 1 COV token is worth $1 at the time of investment and you want to allocate $100 to this position. The trader in question currently has their portfolio split 50/50 between Bitcoin and Litecoin.

In this scenario the copy-trading process would be as follows:

You follow a trader whose portfolio is 50% LTC and 50% in BTC

You allocate 100 COV tokens ($100) to mirror this trader

You pay a 2 COV ($2) fee to the platform

49 COV ($49) is exchanged for LTC

49 COV ($49) is exchanged for BTC

After this, your portfolio mirrors all future trades performed by this trader on a like-for-like basis up until the point you stop following the chosen trader. It’s as simple as that.

Now imagine, 2 months later — the trader you followed has made a whopping 100% return on their portfolio and you want to collect your money back with a healthy amount of profit. To do this you simply click to unfollow the trader and the rest is handled automatically by the platform — returning your investment and profit (minus a success fee).

This is how it works:

Your portfolio value has now doubled to $196

You click to unfollow your chosen trader

All asset positions are liquidated into COV at market rate ($196 worth)

Fees are paid on the profit

The remainder is returned into your available balance

The total fee you pay is equal to 27% and is only incurred on profit. 17% of this is paid to the trader whom you followed and 10% goes to the platform of which 5% is burned (taken out of circulation).

In this example fees would be collected like so:

Total after unfollowing = $196 in COV

Trader commission = $16.66 in COV

Platform fee = $9.80 in COV

Of which 50% ($4.90 worth) of COV is burned

This leaves you with $169.64 worth of COV from an initial investment of just $100. Not a bad return after browsing a few trader profiles and clicking the follow button!

Copy-trading from the trader’s perspective

As a public trader on the platform the process is simple, you just carry on trading as normal. In addition to normal trading profits you also gain an extra 17% of any profits your followers make. Aside from this, you get the added benefit of advanced charting/trading software to make sure you trade as best you possibly can.

Further reading:

There are a few more intricacies to the copy-trading process but this is a summary of the main aspects. For more information you can take a look at this article on Covesting’s knowledge base.

Liquidity Aggregation

Often when new exchanges crop up liquidity proves to be an issue — having the best exchange in the world with little to no liquidity deters users almost immediately. This often leads to higher prices, bigger spreads and slow trade execution time. Combating this issue and giving users a massive order book from the get go, Covesting use what’s known as liquidity aggregation.

Liquidity aggregation means combining the order books from various other cryptocurrency exchanges to bring them all into one location. Using API’s from some of the largest crypto exchanges in the world, buy/sell orders can be directly executed from the Covesting platform as if the liquidity were there in the first place. On top of this Covesting have their own liquidity which they aim to build up over time to slowly replace the aggregation service.

This is a great idea to get the platform up and running and gives users the best prices from a variety of sources — ensuring important trades are never missed.

By using liquidity aggregation Covesting automatically jumps one of the biggest business hurdles that is presented when starting a cryptocurrency exchange.

DLT Regulation

Regulation looks set to be one of the defining features of the crypto space over the coming years. With exchanges being rife with hacks and scams dominating the news, regulated exchanges appear to be leading the way and those that fail to comply are likely to be left in the dust.

Since their ICO Covesting’s approach has been quite unique— voluntarily subjecting themselves to the scrutiny of the new DLT license in Gibraltar — a move that has since been followed by other large exchanges. This means that from the day Covesting open the doors to the public they will be fully regulated.

From the GFSC website, here are the nine requirements a business must meet in order to obtain a DLT license:

Conduct their business with honesty and integrity.

Pay due regard to the interests and needs of each customer and communicate with customers in a way which is fair, clear and not misleading.

Maintain adequate financial and non-financial resources.

Manage and control business effectively, and conduct business with due skill, care and diligence; including having proper regard to risks to said business and customers.

Have effective arrangements in place for the protection of client assets and money when it is responsible for them.

Have effective corporate governance arrangements.

Ensure that all systems and security access protocols are maintained to appropriate high standards.

Have systems in place to prevent, detect and disclose financial crime risks such as money laundering and terrorist financing.

Be resilient and must develop contingency plans for the orderly and solvent wind down of its business.

Each requirement also includes a sub-set of standards that must be met, so it is clear to see that obtaining a DLT license is no mean feat. It takes time, it means a lot of effort but most importantly it means the company is dedicated to serving and keeping their customers safe.

Further reading:

More information on the DLT license can be found here.

Fiat Gateway

Anyone who has a little bit of experience in the crypto space knows just how much of a pain it can be to trade back and forth from fiat. Be it processing times, bad trade prices or other options like Tether that have proved controversial, it seems no company (or at lease very few) have managed to master the moving of funds between the fiat and cryptocurrency worlds.

Covesting addresses this problem with both a fiat gateway and various fiat pairings. This means no more ‘stable’ currencies like Tether, just good old fashioned-fiat. From launch, Covesting will provide a fait gateway with USD, EUR and GBP — allowing users to purchase the COV token (and a handful of other top cryptocurrencies) directly with fiat.

Deposits and withdrawals in USD, GBP and EUR are set to be in place from day one which is a massive milestone by any crypto standard. The team will also be looking to implement more currencies as time goes on.

Tokenomics

Many companies boast a highly integrated utility token but COV delivers above beyond on this front. The COV token is an integral part of the platform and has extensive use cases making it a very attractive investment choice due to the potential rise in demand once the platform is launched.

Here are just a few advantages of COV:

COV is required to copy-trade

Staking COV is required for algorithmic trading

50% of platform earnings go toward a COV buy-back and burn program

A 50% fee reduction on the exchange when using the token

By making COV the only accepted form of payment for the platform’s main feature (copy-trading) and all forms of algorithmic trading the token should gain a healthy amount of liquidity once the platform launches.

Along with this 50% of all platform earnings go toward a buy-back and burn program — gradually taking more and more COV out of circulation. This should theoretically raise demand and therefore the price over time.

Also, worth an honourable mention is the fact that the supply of COV is very low; weighing in at just 20 million.

Algorithmic Trading

As if there wasn’t enough token utility already, Covesting aim to implement a feature where users can stake their COV for arbitrage bot trading.

Arbitrage trading takes advantage of price differences across multiple exchanges, buying and selling simultaneously and then pocketing the price difference in the middle. In the context of Covesting this means users with a certain amount of COV will be able to “stake” it for the arbitrage bot to utilise. The amount you stake will be weighted percentage wise against the community stake to determine a reward ratio.

For now, the minimum staking amount is yet to be defined but it will be announced nearer to the release of the arbitrage feature (toward the end of 2018 / start of 2019).

After arbitrage trading is developed the company also seeks to create a public API upon which users can take advantage of Covesting’s liquidity aggregation to run their own trading bots automatically all from one location — taking out the need to work with multiple exchanges. This feature is still in the works and won’t be available for some time but certainly worth a mention.

Intelligence Portal

The Crypto Intelligence Portal acts as an entire standalone education/news system for all things crypto related.

Some features include:

Latest crypto news

Trade ideas/videos from the pros

Extensive learning materials related to blockchain

Market data, charts and prices

The best way to describe it is if you combined TradingView, Coin Market Cap, Udemy and Coin Desk all into one easy to digest website.

So far, the trade ideas sections has garnered a great reception with users already adamantly following the technical analysis of various knowledgeable traders that submit ideas on a daily basis.

24/7 Multilingual Support

Covesting have gone above and beyond in customer service — with a 24/7 multilingual support team who are very helpful. The live chat on the company’s website is always on and has a support member at the other end within seconds to help users out.

This is something that is unheard of within the cryptocurrency space but needed more than ever. Often crypto businesses are shrouded in a reputation of bad customer service which ultimately — when dealing with valuable assets — can be alarming at times. Covesting seems to understand this sentiment and as such has hired many support members to attend to customer concerns as quickly as possible, because at the end of the day these are their customers.

Mobile Application

Mock-up of Covesting’s iOS app design

Covesting currently have their iOS app undergoing approval from the Apple team and are also in the process of developing an Android version too.

The app boasts the ability to track personal portfolio performance, gain market insights and trade cryptocurrency assets directly from mobile. Users can also view detailed analytical data on trader profiles to get an idea of past performance.

Once an investor finds a trader with a strategy that suits them, they can simply follow the trader — mirroring their portfolio and future trades automatically.

In addition to these promising features, the most notable takeaway is just how well-presented the UX design is. One of Covesting’s business cornerstones is their aim to lessen the learning curve for newcomers looking to trade cryptocurrencies and the app stays true to this mantra — providing a fresh, user-friendly design within a space that is notoriously tech orientated.

Community

Often it is cliché to say how amazing the community of a certain crypto project is but with Covesting this cliché reins true. Mostly residing on the Telegram group, you will find the community having insightful discussions every day, providing ideas to better the platform and generally helping newcomers. It is refreshing to see a community that is not entirely focussed on prices but more interested in discussing developments, regulation and innovation within the blockchain space.

Along with this you will find a host of knowledgeable admins and even the CEO answering any questions that arise — even some of the more difficult ones. The whole team runs transparently turning even the biggest of skeptics into valuable community members.