DeFi asset management platform HyperDex is betting on significant market demand for the idea of effortless and easy-to-understand, decentralized crypto futures trading. To that end, it aims to make futures more user-friendly by marrying the optionality of derivatives with the simplicity of sports betting.
HyperDex is the pioneer of a new kind of simplified cryptocurrency trading model it has termed “crypto race trading.” The idea is to make it easy for less technical users to speculate on the future price of an asset and know precisely how much profit they stand to gain if they guess correctly.
Crypto race trading is just one component of HyperDex’s DeFi platform, enabling low-risk fixed-income investments and algo-trading investments. Those are automated trading protocols based on a pure statistical arbitrage algorithm.
All three of HyperDex’s products are designed to be straightforward to understand. Still, the biggest potential rewards by far are to be had from crypto race trading, which is comparable to existing but more complex cryptocurrency price prediction markets available on platforms such as Binance.
What Is Crypto Race Trading?
“Race trading is a crypto derivative, except that it’s far more user-friendly because it’s a hybrid of sports betting and futures contracts,” said XXXXXX.
For new investors, futures contracts look tempting, but they can be tricky to understand and carry a lot more risk. New investors will not be put off, though, so it’s that segment of curious traders who want to make more complex bets but are unsure how to do so that HyperDex hopes to appeal to.
“Futures are hard for new traders because you have to set the proper leverage, stop loss, target, and so on,” XXXXX said. “Most new traders over-leverage because they think they can gain quick profits, and 80% of the time they are wiped out.”
To place a bet on HyperDex’s crypto race trading market, investors select one of multiple available “Race Trading Cubes.” Each cube enables users to speculate on the future prices of select crypto assets. The investor predicts the future price; then, the HyperDex Race Cube will automatically calculate the necessary information for the user’s stops, long or short position, and the proper leverage according to the user’s risk level.
With each HyperDex Race Trading Cube, the prices are all predetermined. So if a user wants to bet on the price of Ethereum and it’s currently trading at $3,000, they can select a cube with a $4,000 target and a $2,000 stop or liquidity price. The leverage will also be predetermined, so the investors will know that if ETH goes to $4,000 before the cube expires, they stand to make a 25% return on their original investment.
“This is why it’s similar to sports betting. If you bet Man United to win at odds of 1.25, you know you will win 25% of your stake,” XXX said. “If the price of ETH reaches $4,000, you also make 25%, but if it drops to $2,000, you lose everything.”
Investors can also extend their crypto race trading bets by investing in a “HyperCube” to earn additional rewards. To create a HyperCube, investors must deposit HyperDex’s native HYP token in addition to the asset they’re staking, for which they’ll generate an additional return in HYP tokens that’s equal to the return on their original investment. In other words, they’ll be able to generate “parallel” revenues.
HyperDex insists on these benefits in two ways: first by boosting an investors’ total return and secondly by increasing demand for HYP tokens. By encouraging users to stake with HYP, HyperDex believes it will lead to higher token prices and a boost in the value of whatever additional returns its investors win.
With HyperDex Crypto Race Trading, new users get not only an easy entry into the world of crypto derivatives and futures but also the prospect of some very attractive returns that will only grow if they choose to extend their bet with a HyperCube. Moreover, those rewards will grow bigger the more popular the platform becomes. It means HyperDex crypto race trading can even be a viable option for more experienced traders, too, potentially as a hedge or as part of an options trading strategy.
That said, HyperDex promises crypto race trading will always retain its simplicity.
“The idea is to make it very easy to set futures’ trades that are very easy to understand, especially for the Asian market that enjoys fast, small bets,” XXXX said.