I'm going to start a new side project! I've been hard at work consulting for Parabolic AI, helping them develop algorithmic trading systems and tools. I've also gotten my productivity tool Pomish (post on this sometime...) to a spot that I'm happy with. That means it's time for something new!
I'd appreciate it so much if you reached out to ask questions and let me know what you think about the following two ideas!
Idea #1: Crypto Trading Chatroom Matchmaker
Context
Technologies built on blockchain are exploding. They can act as currencies and stores of value, allow improvements to existing products, or empower the creation of brand new products. As this technology is still in relative infancy, growth is happening so fast, and the industry feels like the wild west, with massive opportunity to capture value.
The Problem
Cryptocurrency and tangential technologies are developing at an incredible pace. It's a full time job to keep up with Ethereum, let alone all other cryptocurrencies, let alone NFTs, DeFi, and Dapps too. Those who can keep up will perpetually (and increasingly) have an edge over those who can't.
The Solution
Cryptocurrency group chats allow for specialization, which allows users to guide each other to minimize learning curves.
Does Anything Like This Exist?
Absolutely! There are numerous large cryptocurrency groups on platforms like Discord, Telegram, and Slack.
So What's the Idea?
Existing groups have hundreds of users, so most are left to be viewers only, as the majority of posts are ignored anyway. Ideally, you'd have a few friends all passionate about cryptocurrency, who had the same goals, risk tolerance, and commitment level that you do. Most people (including me) don't.
I'm considering building a simple group matchmaker. Users would take a quiz to determine their risk tolerance, desired trade lengths, platform of choice, ideal number of group members, and most importantly, their existing competency level. Users could then be matched into a group that closely met their preferences.
What Value Does This Add?
Participating in a group that's a great fit for a user's goals should make it as easy as possible to gain knowledge on everything crypto. This should translate directly to dollars, as they'll make better and better trades.
How Will This Make Money?
Ideally this would be a subscription, but it seems like that would be easily gameable, as users could go off on their own as soon as the service paired them up. A one-time payment also seems to work, and has the added bonus of increasing the chance of getting committed users, who will make their groups better.
Weaknesses?
- It would take ~100 users up front in order to be able to create groups that were a good fit for everyone, which is a chicken and egg problem of sorts.
- I question whether or not people would be willing to pay up front due to the uncertainty of the group they'd end up with. This could be potentially mitigated by making it clear that users could join a new group if needed
Idea #2: Polymarket Follow The Leader
Context
Polymarket is a platform that creates binary options predictions markets. I've linked sites that explain all the buzz words more thoroughly, but in short, market participants are asked a question like "Will Donald Trump be the 2024 Republican Nominee for President?". They can then choose to purchase shares of "Yes" or "No", which fluctuate in price between 0 and $1. The sum of the prices always equal $1. As participants buy more shares of "Yes" (demand increases), price of "Yes" goes up, and price of "No" goes down. A resolution date is set, at which point the shares aligned with the correct result are worth $1 and the other shares are worth nothing. This incentive structure creates a prediction market because the market is determining the likelihood of an event occurring (much like sports betting yields a "line").
The Problem
There's a spectrum of participants in Polymarket spanning from data scientists building predictive models with inside information to people with strong opinions on specific topics. (In case you didn't guess, the data scientists have an edge.) Just like any investing, trading, or betting ecosystem, there are stronger traders and weaker traders due to information asymmetry, time, and technical skills, among other things. There's massive inefficiency (read opportunity), but it takes a large commitment of time and effort to be a successful trader on Polymarket.
The Solution
What if you could receive an alert every time the best traders on Polymarket make a trade so that you could copy them?
Does Anything Like This Exist?
Investment alerts systems, including "follow the leader" style, are common place in the traditional stock market, and now in the cryptocurrency markets. Polymarket is a relatively small niche where nothing like this exists yet.
So What's the Idea?
Polymarket is built on a public blockchain, so all market, transaction, and user account information is accessible. This means that one could find the trader who is averaging the highest return per trade, has the highest Sharpe Ratio, or wins the most often and simply copy them every time they make a trade.
I'm considering building a website that neatly packages metrics on top traders, making it easy for users to pick a favorite trader and receive an alert (or even have a trade automatically executed) every time that trader enters or exits a position.
What Value Does This Add?
This simultaneously minimizes the time requirement, while maximizing the return on investment for Polymarket users.
How Will This Make Money?
The value proposition of this idea is so dollarizable© that a relatively high (~$50) monthly subscription seems viable.
Weaknesses?
- This idea would largely rely on the success of Polymarket, it wouldn't be entirely under my control to succeed, so I would want to evaluate their trajectory (which I believe to be positive) prior to investing time and money into this idea.