It may be daunting for the average trader to even consider investing in emerging asset classes such as cryptocurrency. As it stands, many see the value of the crypto market, but are hesitant to diversify their portfolios into the digital asset because of the steep learning curve.
In other words, most understand that crypto has the potential to generate profits, but are concerned with the risks of getting started and converting their hard-earned money into volatile digital assets. Fortunately, new crypto wealth management platforms like Zignaly are pushing the boundaries of who can safely invest their money into crypto through innovative trading solutions.
Zignaly’s platform is a central hub that offers value to both expert traders, beginner traders, and the overall crypto exchange. Expert traders are able to monetize their skills and industry knowledge by acting as fund managers, while beginner traders are able to select an expert to grow their portfolio. Ultimately, new investors bring much-needed “new money” into the crypto market, which is essential for the future of the asset class.
How Does it Work?
Having an expert trader manage your crypto portfolio on Zignaly is quite similar to employing a traditional fund manager. Users are able to choose expert traders to manage their crypto based on a variety of factors including their track record, strategy, portfolio size, and existing followers. The key distinction here is the middleman organization between users and expert traders. In traditional fund management, there is typically a financial intermediary such as a commercial bank or an investment bank. Zignaly replaces this platform by prompting users to communicate with pro-traders directly, thus allowing for lower fees and increased trading efficiency.
Once users choose an expert trader to manage their portfolio, their work is done. All that’s left to do is track the trader’s performance and make adjustments accordingly.
On this front, Zignaly does a good job of being transparent with its users, offering metric tracking and customizable settings on their wealth management interface.
Key Considerations to Get Started
So you want to get started- what are the considerations you need to make when placing your digital assets in the hands of an expert trader?
Determine what you want to get out of your investment. What are your primary and secondary objectives? These might include rapid growth, stable income, safety, liquidity, or a combination of the above. Your objectives will help you determine which expert trader will best manage your assets. For example, an investor with a high-risk investment method might not be suitable if you are looking to be risk-averse.
Every official asset manager on Zignaly is assigned a “drawback percentage”, which acts as a snapshot of their trading history. It is a metric based on an updated 3-month moving average of the trader. In short, this statistic will give you a good idea of how they typically react to market volatility and perform under diverse market conditions, making it an important consideration to make when choosing your fund manager. The drawback percentage also works in tandem with Zignaly’s plans to implement insurance NFTs, which will be touched on later in the article.
Security is a crucial part of entering any asset exchange. That being said, here’s what Zignaly does to keep your money safe:
- The Zignaly Exchange is currently part of the Binance Broker program, a trusted collaborator for crypto brokers across the globe. This means that Zignaly’s users will have their funds covered by their security layer and the SAFU (Secure Finance Fund for Users).
- All API keys are RSA encrypted before they are stored in a private database. These keys are encrypted and decrypted using a certificate which is kept in a separate location outside the database.
- Zignaly offers 2FA (2-factor authentication), which must be used for all account withdrawals. This acts as an extra security layer to better protect your digital assets.
The Primary Benefits of Having a Crypto Fund Manager on Zignaly Zignaly differentiates itself from other wealth management platforms by utilising a Percent Allocation Management Module, or PAMM for short. Essentially, PAMM ensures that all user portfolios will gain profit proportionately to the earnings of a trade. For example, let's say user A allocates $2,000 to be managed by an expert trader, while user B allocates $20,000 to the same trader.
Essentially, if the expert trader makes 20% in gains, both user A and B will profit proportionately. User A will make 20% of $2,000 ($400), while user B will earn 20% of $20,000 ($4,000). Since the trader made a gain, both users pay a success fee out of their profits and keep the rest. This system eliminates the need for high initial capital when entering the market. As long as the PAMM model is used and gains are paid out proportionately, risk-averse users are able to delegate small amounts out of their portfolios to be managed by expert traders.
Still Doubtful? Zignaly’s Future Plans for an NFT-Based Insurance Protocol Moving into the second half of 2021, Zignaly is prepared to offer more unique solutions for new crypto investors, most notably their insurance NFTs. NFTs (Non-fungible tokens) are unique assets that can be traded for a predetermined value. Zignaly plans to offer asset insurance plans sold as NFTs in order to further mitigate the risks of trading cryptocurrency for new investors. These insurance tokens will be sold by the same expert traders that a user can select to manage their funds. If an insured user incurs losses greater than the expert trader’s aforementioned drawback percentage in any given month, they are then able to claim the contracted coverage amount. This industry-first insurance NFT solution further appeals to new crypto investors, ultimately satisfying the needs of low-risk investors.
In summary, Zignaly’s solutions for lowering the risk of investing in crypto allows for new investors to effectively diversify their portfolios using digital assets. That wraps up today’s article on Zignaly’s expert traders - As always, we look forward to seeing more innovative solutions to help the average citizen break into crypto.