The world of social trading has been evolving for more than a decade and is dominated by several major players. BitMEX, a major crypto derivatives exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, wants to change this balance of power and has unveiled a novel approach to social trading named ‘Guilds’. In its beta testing phase, Guilds is open to all BitMEX users, allowing active engagement and collaboration among traders.

BitMEX Wants to Redesign Social Trading with Guilds

Guilds provide a social trading platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term for users to form teams with other traders, enabling them to trade competitively as a collective and share trading strategies. The goal for each Guild is to outperform others, earning a top three position on the leaderboard and claiming a share of the weekly prize pool, known as the ‘Guild Pot’.

The creation and identity of each Guild are managed by its leader. Once established, Guild members can communicate in a private chat room that's fully integrated into the trading UI. Social trading solutions have been developed for more than 15 years, with the largest player in the market being the Israeli-originated, eToro platform. However, the concept presented by BitMEX is something new, which may be of interest to some traders.

“Guilds is not just designed to drive collaboration amongst the BitMEX trading community, it stands as a testament to our commitment to helping our traders thrive and recognises the power of social trading,” Stephan Lutz, the CEO and the CFO of BitMEX, commented. “By being part of a Guild, we hope that our traders can unlock their full potential by learning from their cohort.”

Early Results Seem Encouraging

The beta launch of Guilds on 29 June attracted over 230 beta testers. Traders participating in Guilds earned nearly $330,000 in profit and loss (PnL) in one week. According to BitMEX, this initial result is promising and stands as a significant milestone for the crypto exchange.

“The initial success of BitMEX's latest offering gives me the confidence in the direction we are taking with product development and in our ability to empower and support traders through our comprehensive ecosystem” Lutz added.

Any verified BitMEX user can join a Guild, either as a leader or a member. Each Guild can host up to 49 members, with leaders required to stake at least 10,000 BMEX tokens. Guild leaders have the authority to manage their Guild's membership and distribute the ‘Guild Pot’ if won.

More Companies Join ‘Dead’ Industry?

BitMEX is not the only financial company trying its luck in social trading. Over the last two months, Match-Trade Technologies has partnered with ZuluTrade to expand its existing social trading services. Meanwhile, Brokeree Solution has introduced a mobile application for social trading.

Moreover, eToro has announced a partnership with Twitter to integrate real-time asset prices with the $Cashtags feature of the social media platform. eToro told Finance Magnates that Twitter owner Elon Musk was not directly involved in the transaction.

However, according to data gathered by Finance Magnates, the peak of social trading popularity was in 2017. Currently, social trading volumes account for only 1-3% of total volumes (excluding typical social trading companies, such as eToro or NAGA). Among the largest brokers in terms of monthly volumes, every third one offers some form of social trading. However, for most, this does not yield a significant profit.