Perfect Collaborators: How Membrana is Building Trust Between Traders and Investors

Many investors know how difficult it is to find a trustworthy and professional trader who will be diligently working to increase their capital. Even traders from renowned financial institutions were caught and prosecuted for illegal trading and playing with customers’ money.
For example, in 2011 a UBS rogue trader scandal caused a loss of over 2 billion USD as a result of unauthorized trading performed by one UBS trading director.
And here’s the most recent case highlighted on March 28th, 2018 by The Chicago Tribune. A 24-year-old Chicago trader was caught allegedly stealing $2 million in Bitcoin and another cryptocurrency from his employer.
While a traditional trading is subject to rigorous internal controls and external regulation, cryptocurrency practices are still quite young and in many cases controls and regulations are not in place. Investors interested in fund safety and obtaining complete and reliable information from traders act on their own risk and are not protected in case of losses or fraud.
In their pursuit of setting up cooperation with a reliable trader investors experience the following concerns:
  • limited control and safety concerns over invested fund;
  • access to fact checking past a trader’s performance;
  • risk of violation of contractual terms from a trader’s side;
  • lack of a convenient tool for trading on different exchanges at the same time

It’s no surprise that a solution for the problems described above that concern investors in the blockchain world came from a blockchain project. The project is called Membrana and it sets new rules for investor/trade relations protecting investors, providing traders with new opportunities and building trust between investors and traders.
By utilizing Ethereum smart contracts, Membrana has developed a unique algorithm that allows investors to form relations with traders based on principles of transparency, control of trader’s actions/earnings and security of investor’s funds.
To start with, the investor may filter traders based on their such as trader’s reputation, profitability, contract amount, contract duration, history of trading. Each trader is assigned a rating.
Relations between investors and traders are managed by Ethereum smart contracts. Contracts are automatically terminated if the target profit is achieved or, alternatively, to stop loss recorded in the smart contract. A trader’s commission is paid by a smart contract only if the target numbers are achieved.
The investor and traders are both protected by the Membrana platform.
The investor’s money is protected by the Membrana technology via a specially developed API. The API key is not transferred to the trader, but stored on the Membrana’s platform in a secure database. The trader trades on an exchange via the Membrana single trading terminal. Consequently, the trader does not have access to the investor’s assets.
The Membrana platform provides the type of distribution in which the trader can only trade the agreed amount. All other funds remain under the full control of the investor.
The investor is not allowed to withdraw money from the exchange account above the limits set by the contractual terms.
Additionally, the Membrana has the following advantages for investors:
  • All terms of a transaction are set by a smart contract and cannot be changed;
  • Choice of accounting currency: BTC, ETH, and USD;
  • Distribution of funds on one exchange account between several traders for trust management;
  • An option of only a partial transfer of funds from the exchange account for trust management allowing for self-management of remaining funds;
  • An option to work with the Membrana platform via mobile phone.

Membrana has the following advantages for traders:
  • Possibility of finding new clients among investors and attract investments in trust management;
  • Single trading terminal inside the platform supporting various exchanges;
  • Support of all major crypto-currency exchanges in one trading terminal;
  • Result based rating system for the best traders;
  • Terms of a transaction between the trader and investor are set by a smart contract and are unchangeable;
  • Trader’s commission fee is set for transaction at the moment of contracting;
  • Access to trade on exchanges and work with contracts via mobile phone.
The Membrana platform is a unique opportunity for traders and investors to build mutually beneficial and low risk relations, by utilizing the best in class blockchain and other supporting technology. It will fundamentally change the world of crypto assets trading.

Comments


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