Since its release in early 2018, EOS became one of the major blockchain application platforms capable of competing with Ethereum for popularity. Its functionality closely matches the definition of a decentralized virtual computer that operates on smart contracts. The infrastructure of the EOS system makes smart contract implementation easy in all sorts of applications.
By definition, the primary purpose of smart contracts is to allow decentralized governance over specific functions and parts of the network while keeping it secure. One of the peculiar applications of the technology on the EOS blockchain was recently presented by CryptoFollow, a Maltese company that develops a decentralized ecosystem for crypto-brokers and investors. What we consider a broker in traditional trading and stock markets is referred to as an investment professional, a synonym for crypto-trader within the CryptoFollow system. In fact, it is a user of the platform authorized to create and execute orders on behalf of investors. Thanks to smart contracts, the company introduced an innovative method of crypto-trading with low entry-barrier for first-time traders and investors.
The agreements between the investment professionals and investors are governed by multi-signature (multisig) smart contracts on the EOS blockchain. They reflect the terms of the trade that the platform users have previously agreed upon. The parameters of agreements include the use of specific exchange that the investment professional and the trader decide to use. At the moment, CryptoFollow allows users to link their account to three popular exchanges such as Binance, Bitmex, and Coinbase. The basic contract between the parties also contains information about the investment professional’s fee that the investor will pay or profit-sharing conditions. It also includes the length of the trade, the maximum balance that can be used per trade, selection of traded coins and the investor’s signature.
The agreements are generated on CryptoFollow by authorized investment professionals. Afterwards, contracts are transacted onto the EOS blockchain and assigned to the creator’s network.
Investor’s signature serves as a validation of the agreement and seals it with an extra transaction when the contract goes live. Thus, signatures act as triggers for automatic order executions.
On CryptoFollow, a smart contract can only have one creator – the investment professional, while many investors can sign it at the same time. Both the investment professional and the investor are required to participate so that the trade gets executed. Investors are required to review and sign available contracts within the network. Signing the contract sets the automatic order created by the investment professional into motion.
Due to smart contracts’ high interoperability, CryptoFollow user’s orders can be placed directly on the connected exchanges. That makes the platform’s interface more intuitive compared to those the majority of today’s exchanges offer. That’s how you can catch a glimpse of what trading of the future will look like.
This mechanism makes day-trading very safe for beginner investors who are consistently provided with guidelines on the order execution. At the same time, it puts investment professional into a position of brokers acting on behalf of their clients on traditional stock exchanges. Smart contracts make the entire process run as Swiss watch that’s not prone to errors. They allow the two parties to increase their trading profits while the framework of the platform and its verification process keeps fraudulent actors away.
CryptoFollow’s approach has significantly minimized the investors’ risks associated with profit loss during crypto trading. It has also redefined trading for inexperienced traders who can learn from professionals in a fraud-free environment. With CryptoFollow, crypto-traders and investors are finally receiving the treatment and quality service that they deserve. This customer-centric vision puts the company ahead of many other enterprises that exist in the blockchain and crypto-sphere.