Background

The world of retail investment has fundamentally altered the behaviors of small and large investors, across sectors, across asset classes and across various demographics.

Individual retail investors are investing in stock markets and cryptocurrencies directly using apps such as Coinbase / Robinhood without the expert guidance of institutional investment firms. They are listening to advice from so-called finfluencers or individual retail traders on Twitter, YouTube, TikTok etc. While not all influencers are bad, the good one’s do not have the means to establish or prove their legitimacy and there’s no way to separate the wheat from the chaff. Today’s retail traders, online trade advisors, youtubers, and finfluencers are attested solely by their own claims; there is no true way to verify the competence of individual traders or online trade advice nor is there a reputable firm backing these individuals and their claims.

This results in two primary problems: spurious trader behavior engaging in unregulated internet competition coupled with spreading of false claims and a lack of vetting and legitimacy in the burgeoning finfluencer and investment “guru” space. Because of the nature of this space, regulators lack the resources or tools to manage this effectively. On the plus side, these trends will essentially result in events such as the GameStop short squeeze that are a great retail trading success story, which also shocked the system earlier this year. Today, tens of thousands of finfluencers promote trading of various financial assets, without a detailed analysis, by using a variety of social-media platforms and millions of their followers are making snap investments, after only watching a short Tik-Tok video or by reading a tweet.

While there are several attempts to solve this, including impressive projects such as COPE1 that are approaching this problem by taking the trader calls made on social-media such as twitter, we believe this still doesn't solve the root cause of the problem, as there are plenty of impostors that copy trader positions and trader market calls. This invariably leads to an obfuscation of the origin of the market analysis and makes attribution of trade success or failure harder and much more difficult. Whereas, participation in a competitive prediction market is verifiable, as it helps to track performance in a controlled, simulated environment. This in conjunction with tracking and ingesting data purchased through COPE reports2 offers a promising, holistic solution. Such a model directly enables verifying gamer accounts that are connected to social media account identities using COPE. The COPE data is used in conjunction with traders Stonk’ platform's performance metrics such as game stats, and this offers a robust and comprehensive trader performance score, and we believe that this model builds on the impeccable work done by other projects such as COPE in this space.

Probably one of the few relevant benefits of conventional financial advisors and institutions is their brand of legitimacy. Financial advisors are vetted by their parent firm and supported with its large staff of analysts. As a result, their clients receive quality advice and financial management competence with .

In contrast, today’s retail traders, online trade advisors, youtubers and finfluencers are attested solely by their own claims. There is no true way to verify the competence of individual traders or online trade advice, nor is there a reputable firm backing these individuals and claims. Because of the nature of this space, regulators lack the resources or tools to manage this effectively. The regulators lack the tools or the means to monitor such a fragmented space.

Similar to how Uber solves the problem of oversight and regulations, by using a dynamic rating system on each ride for both drivers and passengers, we believe our approach is the most comprehensive and the easiest way to solve this problem.