Our clients know that innovation and evolution are in our DNA. Darwinex Zero (D-Zero) was created to enhance our offering in areas where we believed we had room for improvement. We are convinced that D-Zero reinforces our vision and the ecosystem we have created over the years.
Next, we’ll cover the main reasons why we choose to develop this new subscription service. If you want to read more in depth about the ins and outs of Darwinex Zero and how it works, you can read this blog post.
Better alignment of incentives
There is nothing more credible in a company than aligning its vision with its business model, especially in the financial sector. We were born 11 years ago with the goal of allowing profitable traders without capital to generate more income from their skills, without resorting to leveraging their own capital. This is how Darwinex was born, a marketplace in which we make the best trading talent available to investors, always striving to maximally align incentives between the parties in order to establish the required trust to launch a fair and meritocratic market.
In 2014, we made the strategic decision to create our own broker to offer the most comprehensive experience for our traders, control the flow of orders from traders and investors without the need for technological dependencies and third-party adaptations, and offer the best returns to investors by reducing the chain of intermediaries. While this decision allowed us to create what we are today, it also continues to generate some mistrust among clients, who may rightfully consider that there are cleaner ways to achieve our vision.
In 2020, we chose to eliminate broker intermediary revenues for investors, adapting our model to that of any fund manager. With this step, we demonstrated our intention to eliminate any incentives that could pervert our vision in the medium or long term, because it is evident that as long as we did not do so, there would always be doubts that Darwinex could favor DARWIN providers who generated more commissions than others who traded less, such as long-term managers. It was a huge blow to our bottom line, but time has shown that it was the right thing to do. Today, there is three times more investment than three years ago, and we have grown 80% in investor assets in the last year.
The truth is that we still generate a lot of income from the commissions our traders generate. This fact may lead potential clients and employees to think that our commercial focus is on capturing any trader regardless of their talent and that it could influence our strategic decisions, diverting us from our existential reason. As founders of a long-term-oriented company, we are aware that we must manage the company based on values in order to attract the best employees, who can credibly transmit the values to the rest of the organization and the world. A company like ours cannot depend economically on traders who generate a lot of volumes or lose large amounts of money; it is unsustainable.
With Darwinex Zero, we completely eliminate this misalignment of vision. We earn the same from any trader for sending us their signal, and it is demonstrated to clients and employees that our efforts must be focused on making traders do better at Darwinex, in order to generate income from investor assets under management.
Greater focus on the beginning trader
As mentioned earlier, Darwinex was designed to help profitable traders who don’t have their own capital. While that has been our target customer, we also believe that our product is ideal for those traders who are just getting started. We believe that there is nothing better to stimulate someone who is starting out than having references that pushes them to work hard every day and help them persist in the path towards profitability. However, over time, we have discovered that Darwinex can be improved even further to make the path to profitability more attractive and less costly.
Firstly, we wanted to make access to the D-Zero service as affordable as possible so that the greatest number of people can get started in the world of trading. We offer a single price for everyone, the minimum necessary to give them access to our infrastructure. We provide the same opportunities to as many people as possible. We eliminate the psychological bias of loss aversion that leads most inexperienced traders to ruin. We remove all emotions from their trading, and we believe that this will enable many more traders to achieve profitability, not because it is easier, but because many more traders will persist in the process without losing too much capital. We are convinced that D-Zero provides traders the reward that comes from noticing that one’s efforts are paying off; it completely eliminates the negative emotions of losses that we have all experienced in our learning process.
Secondly, in order to encourage traders along the way, we have created two versions of DarwinIA, SILVER, and GOLD. Until now, to achieve allocations from DarwinIA, it was necessary to have a winning track record for many months, even years, which could demotivate clients starting out. Thus DarwinIA SILVER was born, designed so that traders receive allocations even with only one month of operation. In change, DarwinIA GOLD on the other hand is more exclusive, for traders with consistent track records in the medium to long term. It is also fairer than DarwinIA because once in DarwinIA GOLD, only the profitability of the month is considered. Among equals, it is only a matter of demonstrating who is capable of beating the market month after month.
We don’t believe that there’s a better alternative to Darwinex Zero for clients starting out in trading, especially for those who are ambitious and know that this activity requires effort and dedication. Furthermore, once a client considers that they are ready to take the leap to a real account, we allow them to migrate their track record to Darwinex, thus maintaining the trader’s most precious asset, their track record -their life as a trader- which will allow them to generate investor confidence and thus scale their income.
Access to more talent worldwide
Requiring traders to open a real account with our broker to send us signals prevents us from capturing talent in countries where we don’t have a brokerage license. Obviously, the more talent, the better for all Darwinex clients.
In Darwinex Zero, every trader is welcome, even those who send us signals from countries where we cannot offer our brokerage services, including, for example, the US, Canada, Japan, and India.
In the first phase, every trader in Darwinex Zero must reach the GOLD level to open the DARWIN for investment. Later on, we will allow historical data to be migrated to Darwinex Zero from other brokers, thus qualifying for participation in GOLD without having to start with a new track record from scratch.
Darwinex and Zero Integration
If you want to try Darwinex Zero, you can login with your existing Darwinex credentials and then complete your checkout. In the future, Darwinex Classic and Darwinex Zero will coexist in order for any client to decide which one best suits their circumstances (country of origin, confidence in their strategy, availability of their own capital). We believe it’s important to offer the same opportunities from both platforms. Thus, in a short time, in Darwinex, we will replace DarwinIA with DarwinIA SILVER and DarwinIA GOLD. Darwinex Zero and Darwinex Classic clients will participate in the same programs.
The only difference between the two platforms will be that in Darwinex Classic, trading is done from a real account, there is no subscription fee, and DARWINs are open for investment from day one. In Darwinex Zero, trading is done from a virtual account, there’s a monthly subscription fee, and to open the DARWIN for external investment, the GOLD level must be reached.
The Darwinex team has worked enthusiastically on D-Zero because we truly believe that it strengthens our ecosystem and can revolutionize the world of trading, making it much more attractive for those clients starting out. Time will tell if we are also able to make the new incentives help many more traders achieve profitability.
We hope you like it as much as we do,
The Darwinex Founders – Javier Colón, Juan Colón and Miguel Sato.