Eliminating Broker Fraud: Trading in the Blockchain

Blockchain refers to a shared, distributed, and immutable ledger that records transactions and tracks tangible or intangible assets. You can think of it as a type of operating system that runs various applications. 

The term ‘blockchain’ comes from the way data is stored by the system. Transactions are stored as ‘blocks’ and they form a ‘chain’ by linking together. All blocks contain a time-stamped transaction entry called ‘hash’ that prevent blocks from altering and stop the insertion of transactions between two existing blocks. 

The Need to Eliminate Frauds

Blockchain technology can leave a huge impact on the future of trading. So, it is important to protect it from fraudulent practices. Brokers are found to be responsible for most frauds. You need to know that brokers earn profits from traders’ loss. So, they often maintain an unhealthy dynamic with dishonest reporting of market prices, hyped strategies, trade without permission and by creating hindrance in withdrawals. It creates distrust in the financial market. So, it may be better to opt for a broker-less online trading platform. These platforms handle trading differently and thus eliminate fraud from blockchain through various strategies.

A great strategy is letting the traders own the tokenised and decentralised liquidity pools directly. This way, both the management team of the trading platform and investors of funds receive a percentage of every trade. Thus, a system is created that does not only make profits from the losses of traders, but also from the complete volume of trades taking place on the platform. The trades and their profits are monitored by smart contracts to ensure the fairness in trades and to encourage transparency.

Secondly, a wide range of algorithms is used in the adaptive trading program on these platforms to provide protection to traders. These algorithms assist traders in risk management, trade opportunity recognition, emotion control and more. Thus, the strengths, weaknesses, and other stats can be tracked and used to alert the traders when they are about to make costly mistakes. Traders can also monitor the real-time value and fluctuations of the liquidity pool as well as the dividend payouts. So, the traders can be certain whether a fraud has occurred or not. 

These platforms also take actions to promote trading and growth within their system by promoting different tokens. One such token is the Dividend Token, also known as the D-Token. Every time an individual initiates a trade, this token pays out a dividend of 2% to all token holders. The platform also receives 2% of the overall trade as a technology fee at the same time. Another token is known as Utility Token or U-Token. This token does not pay financial dividends with all trades, but it has 1% – 5% higher pay trade outs when compared to the D-Token. U-Tokens also provides traders with access to exotic trade types like ladders, knock-in-knock-outs, barriers and other open smart contract options. 

These tokens within the liquidity pool are often safely protected by bug and security bounty programs. These programs can protect the liquidity pool from short and long term threats like DDOS attacks, bots attached to trading accounts, Trojan strategies, and site and liquidity pool hacks. The main objective is eliminating any security issue to provide utmost security. They also provide demo versions so the traders can try the program before using it. 

There are many platforms that are coming up with these solutions for greater and safer trading for traders without facing broker frauds. One such platform is Speculative Tokenized Trading Exchange or Spectre.ai in short. Created by Neuchatel Ltd, this disruptive and innovative platform applies all strategies written above, and thus eliminates fraud by removing brokers from the equation entirely.