Looking back at 2017
Every year offers reasons to celebrate and lessons to be learnt, so here’s the review of the year… in a spirit of thankfulness.
In a nutshell – 2017 began to proof:
- How technology, 5 years in the making…
- Powers Alignment
As you’ll gather, the more alignment, the better results… the more technology!
The rest of this post expands on the above. Happy X-Mas & Thank you for a great 2017!
The Power of Technology
The team – now counting 45! – worked very long hours to re-load Darwinex, which went live on April 1st.
As part of the general “re-load” the team re-vamped the:
- Entire private site. The new UX makes DARWINs trade-able everywhere in the interface. The UX & technology is a better foundation to add and improve future functionality.
- Risk manager. Intervenes less than the previous, but decisively when needed. Default VaR scaled down to 10% VaR.
- Investable attributes. Added 6 (not all were new, we unbundled some sub-algos). Re-coded all 12 for efficiency, from scratch. This is crucial to eventually analyse strategies trade-by-trade – instead of end-of-day feedback.
It wasn’t a walk in the park. Complete overhauls are sexy, but dangerous. In hindsight, we’ll think twice about re-loading in the future… we spent the better part of three months ironing bugs and finalising stuff!
By which point it was time to launch the Android App. Apologies to all those 75% of mobile DARWIN trading addicts checking their portfolio 15+ times a day 🙂 You should have thought before requesting mobile trading 🙂
- DARWIN limit orders: Buy Limits, Buy stop, stop losses & take profits. DARWINs are increasingly trade-able!
- Candle charts
- Order execution disclosure, providing transparency
- Lots of lower level improvements.
Believe it or not, most product improvements in the second half of the year went under the hood:
- Improved stability, robustness and future scalability,
- Done lots of efforts to comply with MiFID2,
- Worked on an instant bank payment gateway,
… All while ironing out a zillion tiny bugs – thank you EVERYONE for your patience with the process.
We’d be nowhere without it.
The Power of Alignment
All of which begs the question: where are we? Fancy as the new software may be – was the customer satisfied?
As the wise man said… the proof of the pudding is in the eating. The DARWIN Exchange matches customers in an IP for capital profit-exchange:
- Traders supply DARWINs (their intellectual property in form of trades by their strategy). Traders earn a 20% success fee from,
- DARWIN “Investors” who replicate trader IP – retaining 80% of trading profits
Like every 2-sided exchange, it’s potentially powerful once both sides re-inforce each other. Caveat-emptor the “once” – for network effects to kick in, both sides must beat huge chicken & egg problem:
- Good traders only join if there’s investors,
- Investors only stay with good traders
To kick-start liquidity, Darwinex launched Darwinia in 2016. We became the first investor in our own product to attract traders and lead investors by example.
Looking back we can say:
- The Darwinian capital allocation worked. 350 strategies (about 10% of the active trader base) received at least 1 allocation. This attracted enough good traders to get things in motion!
- Success fees paid out to traders topped USD 1 Million in 2017
- Individual traders earn respectable sums – both monthly & cumulative
- 2018 will add Darwinian Dividends to the mix
Luckily, 3rd party AuM are growing. Even more important: they grow without meaningful promotional investment. They have grown FIVE-FOLD in 2017. AuM growth is accelerating – because investor returns improve steadily.
With everyone pulling on the same string, the alignment that brought the first DARWIN full circle is poised to continue into 2018 and beyond.
This is good for traders: several have now crossed AuM 1MM mark and approach 5 digit monthly success fees at speed.
The Darwinex team takes the opportunity to THANK everyone for making our dream possible.
But that’s the subject for 2018. We’ll share New Year’s resolutions. More on which in a week’s time 🙂
Meanwhile, happy X-Mas everyone!