A Review of Spectre.ai
If the stock market is the destination, brokers would like be the drivers who help you get there. Seems easy and straightforward right? Well it's not always so. There are thousands of brokers that broker the stock market, and whenever a "layman" wants to trade on the stock market, they often need to employ the services of a broker.
Certain financial institutions like banks can serve as broker agents, they meet up with the client who essentially establishes the guidelines for the trade and the agents take it from there. However, while it may seem convenient to access the stock market through the professional agents, it is not always so - at least financially.
This process usually comes with requirements like account minimums, commission fees for withdrawals and of course the substantial fees the brokers charge to the account for their services. This is excluding the potential risks of falling into the hands of fraudulent brokers. At the end of the day, wouldn't it be best if one could deal in the stock market directly without the help of these middlemen? Imagine if there was a platform that eliminated the need for middlemen while trading in the stock market. Let me to introduce you to Spectre.ai, a platform that gives power to the trader.
What is Spectre?
SPECTRE, an acronym for Speculative Tokenized Trading Exchange is the world's first broker-free, financial trading platform. The platform incorporates the smart contracts of the Ethereum blockchain with a wide variety of assets trading options like digital/binary trading, forex, CFD, and crypto trading. Nevertheless, Spectre.ai is a lot more than a trading platform or signals provider for commodities. Like with any blockchain powered system, Spectre.ai aims to disrupt the trading world as we know it.
The most distinctive feature of the Spectre.ai platform is the broker-less factor. No intermediary broker is needed as the system functions as its own broker, allowing uses to directly trade in financial markets. The system doesn't just eliminate the role of a broker, it has several features in place to ensure users aren't scammed or defrauded of their investment on the platform, as it is common with pro-broker systems. The broker is replaced with a decentralised, autonomous liquidity pool owned by the investors who participated in the token sale of the platform. With a new level of transparency and decentralization, Spectre is bringing a revolutionary change to the financial services sector.
The financial trading world is plagued with problems arising from the action of brokers in the industry. There is a thin line between legal trading activities and what unacceptable and these brokers are often found on the wrong side of the line. From manipulating stock prices, prohibiting withdrawal of funds from the account by the trader and a host of other conflicting interest based on possibly fraudulent reasons, brokers are arguably the top reason behind collapsing trader finances.
One doesn't need to look closely into the matter to understand what is happening. The more money a trader loses, the more beneficial it is for the brokers. There are several reports of brokers flagrantly refusing to allow traders withdraw their winnings. The outrageous manipulation of market prices is at the cost of traders and to the benefit of brokers. As if that isn't problematic enough, trading with a broker entails that one has to deposit money with them, in essence you are trusting the broker with their assets.
There are several examples of brokers who were ejected from the system for defrauding clients - Banc de Binary, a digital options broker and FXCM, a forex broker are some famous examples. Nevertheless by the time of these brokers are ejected from the system, the traders involved with them would have already lost a considerable amount of money.
How does Spectre.ai work to address these issues?
The role of the brokers in the Spectre system is replaced with a Decentralised Autonomous Liquidity Pool (DALP), a pool of funds to cover users' trades. The liquidity pool is "tokenised" because it is run by the funds from the ICO. This is how the “liquidity pool” works; when a user trades, they are required to indicate how much money they want to “invest” and the period of time in which are investment will run. At the end of a fixed trading period, after the market buys or sells, the users are left with either a profit or loss. The price feed utilized by the system comes from frequently audited and trusted sources leaving no room for market price manipulation.
The liquidity pool is powered by a verifiable and auditable smart contract which enables a seamless and frictionless trading experience by eliminating the chances of human manipulation of the market. When trading with Spectre, there is no actual exchange of money until a transaction is completed. The trader opens a gateway wallet on the Spectre platform which can be linked to other crypto-wallets regardless of the type of coins it holds. When the trade yields profits, the money is credited to the wallet and when there is a loss, the deficit is withdrawn from the account. Basically, at no point is a trader's money held by an exchange or broker agency.
The investors from the token sale get their dividends whenever people make transactions, in other words, Spectre's fees are generated based on the volume of transactions (all transactions, losses or winnings) removing the conflict of interest model. The online trading market is a lucrative one, the retail FX market is worth over $81 trillion on an annual basis. In that case, Spectre doesn't need to do more than capture a tiny fraction of the market to be established.
Benefits of Spectre
• Broker free
The broker free feature is one feature everyone can appreciate on Spectre. Brokers are expensive, can be fraudulent and there is bound to be a conflict of interest down the line. With the Spectre software, enabled by verified and secure smart contracts of the Ethereum blockchain, traders can directly trade against other traders or Spectre's DALP. The smart contracts controls the pay-outs and outcomes, thus, the system is as transparent and as fraud-free as possible.
• Deposits
The Spectre system allows users to connect their Ethereum wallet to the platform from where funds can either be credited or debited or via a secure portal on the platform. The trader does not have to deposit money into a broker account and there is no point where the money is held by the system either. There are no account managers, no agents, no sales rep etc. Only the trader can access their funds so users do not have to worry about being defrauded by the platform.
• Verification
By function of the blockchain technology, every transaction is verified and authenticated before it is recorded on the immutable digital database. The verification is enabled by a community verification process where a network of nodes (computers) all over the globe confirm the credits and debits to trader accounts.
• Liquidity Pool
The liquidity pool is funded by funds crowdsourced from the token sale and owned by ICO investors, traders can either trade against the liquidity pool or against each other. This liquidity protects traders' investments such that irrespective of if there are a million traders or a single trader, every investment is secured. Additionally, only the smart contracts can add to or withdraw from the liquidity pool.
• Tradable assets
If you can think of a one stop shop that caters for all your trading needs then you have an idea of what trading with Spectre offers. Cryptocurrencies, fiat currencies, bonds, binary options CFD, FX, ETFs, stocks and a wide range of other assets can be traded on the platform 24 hours a day as allowed by Spectre's one-of-a-kind balance sheet model.
Trading models on the Spectre Platform
There are three ways of investing on Spectre (users must hold Spectre utility token to invest).
• Smart Options
Spectre allows traders to trade Smart Options, a high risk/high reward investment with pay-outs as high as 75% -90%. Here, traders have a wide range of asset classes to pick from including regulars like traditional currency pairs and cryptos to commodities like silver and gold.
• Smart CFDs
As the liquidity pool is decentralized, traders can invest in a broad variety of CFDs without the worry of an arbitrary time frame, like in smart options. CFDs investments are low risk/low reward investments. Here, traders can also set stop loss and profit levels before committing their assets to any trade.
• A-Book Trading
Here, traders will be able to trade between equities, assets, and forex. Unlike the other two trading models on Spectre, A-book trading is regulated and centralized which enables the use of fiat currency on the platform. It is however a low-risk/low-reward trade, like smart CFDs.
The Spectre Token
Spectre issues two different types of tokens; the Dividend token (SXDT) and the Utility token (SXUT). The essence of having different types of tokens is to give the investors options on how they want to invest on Spectre. While some investors may prefer token liquidity over yield, others yet would rather go for the token with a more valuable yield. Either way, the double-token system sees to it that every investor is catered for while remaining compliant to trade regulations.
The Utility Token (SXUT)
The SXUT is the regular token whose functions are akin to the native token of any platform. This is the Spectre token that users buy or trade it for another token on exchanges. This token will also give users access to Spectre's unique resources like a special educational course, market/investment indicators, expiries on smart contracts and an extra 5% on pay-outs. This higher pay out is the Utility token's main advantage over the Dividend token.
Dividend Token (SXDT)
The dividend token can also be called a reward token as users are rewarded for holding it. Spectre pays SXDT holders a 2% dividend at the end of every month. This 2% is from the fees generated from every trade executed on the platform. Thus, more transactions on Spectre means more dividend pay outs for dividend token holders. At the end of every financial year, if the SXDT hits a fixed amount of money, dividend token holders receive a special dividend in form of a year-end bonus. Profitability on the exchange is a lot more beneficial to SXDT holders than SXUT holders because of this reward system
The ICO of Spectre Tokens
Spectre held a successful ICO were Spectre tokens were exchanged for Ethereum. The token sale was first announced on September 11th 2017 with a hard cap of $30 million. A total number of 240 million tokens were issued for the token sale. The presale was officially launched on October 27, 2017, it operated for over a week ending on the 5th of November 2017. All participants in the presale were expected to sign up for the whitelist; to ensure all willing investors were given an opportunity to purchase the tokens and to verify the potential investors. The tokens were sold at $0.11 with a 33% bonus, over $6.6 million was realised at the end of the presale.
The main crowdsale kicked off on November 17th 2017 and was scheduled to run for three weeks, until the 10th of December 2017. There was no whitelisting for the public sale although investors were required to register on the site. The presale had a minimum contribution of 1 ETH, the tokens were priced at $0.22 with an 11% bonus for every contribution in the first week of sale. Over $16.5 million USD was raised at the end of the token sale. The ICO was decentralized, fairly paced and priced to avoid whale investors who usually buy out a huge number of tokens leaving a relatively smaller amount for the rest of the investors.
Investors in the token sale automatically received new Spectre tokens in their respective ETH addresses used during the ICO at 6pm GMT 12th December, two days after the ICO was completed. On that same day, from 9pm, the secure portal was opened, allowing investors to login and send their Spectre tokens SXS2, to either Dividend token or Utility token smart contracts, which ever they preferred. Note that SXS2 are cloned tokens and not the original tokens from the ICO which were SXS tokens.
SXS2 were disproportionately distributed based on number of SXS tokens an investor held in their wallets using a 1:1 ratio. The tokens sent to the smart contracts will be converted to either SXDT (dividend tokens) or SXUT (utility tokens) respectively. There is currently a total supply of about 43 million SXUT with over 24.5 million SXUT in circulating supply. SXDT on the other hand has over 82 million tokens in circulation out of a total supply of 140 million tokens. The dividend and utility tokens are available on the following exchanges;
- Bibox (SXUT)
- IDEX (SXUT)
- Crex24 (SXUT and SXDT)
- EtherDelta (SXUT and SXDT)
- ForkDelta (SXUT and SXDT)
The Roadmap of Spectre
The financial services sector is an industry ripe for disruption and with the advent of blockchain technology, Spectre is disrupting the outdated model of online trading. The development of the platform was divided into a four stage roadmap. The first stage started from the last quarter to 2017 and extended to the first quarter of 2018. The first stage covered the ICO and the testing of the platform for the Ethereum blockchain.
The second stage which began in the second quarter of 2018 saw to the expansion of tradable assets on the platform with the inclusion of stocks and commodities like gold, silver and platinum. In April, the system was opened for traders to begin testing the decentralized wallet accounts for trading Smart Options against other traders or against the multi million dollar decentralised autonomous liquidity pool. The first 100 users also tested other functions like account opening process, trading from offline Wallet accounts or on-platform regular accounts, utility token privileges, withdrawals etc.
The CASET (Creation of Account, Storage, Exchange and Transaction Mechanism) also commenced in mid-April. CASET will allow for currency conversion and opening of trading wallets between fiat and cryptocurrency on Spectre. The rest of the month was used to fill up the affiliate whitelist and while applying for regulatory framework for blockchain based financial systems like the European Union MIFID FCA broker/dealer license. In the third stage of the roadmap which is expected to run through the third quarter of 2018, Spectre will connect with major liquidity providers, giving traders the ability to bet on the direction of markets as well as buy and sell the underlying. New asset markets like sports betting may also be introduced to the system.
In the final stage scheduled for the first and second quarters of 2019, the management will introduce order matching capabilities, a D-App Store and sports betting decentralised applications which will be funded by Spectre's DALP.
The Spectre Team
The Spectre Team is made up of individuals combining a wealth of experience and expertise from the fintech and investment sectors including industry veterans with banking experience at the J.P Morgan, Deutsche Bank and Goldman Sachs. The team also consists of Harvard MBA graduates along with graduates of B.Sc and M.Sc holders from the London School of Economics. Essentially, is well skilled and qualified to take Sceptre to greater heights. Some of the key team members include; Karan Khemani – CEO, Zisis Skouloudis – financial forecasting and risk management, Elena Drakos – accounting and financial planning, Menelaos Scouloudis – Advisor.
Conclusion
The current trading model for the traditional financial trading industry is fundamentally flawed. Spectre offers a workable solution as comprehensively reviewed in the Spectre.ai whitepaper. With a broker-free system, as provided by Sceptre, every opportunity for fraudulent broker activity is checked. Beyond that Spectre offers what is perhaps the safest, most reliable and versatile platform for online trading. The platform is quite easy to use and like it has been described by blockchain news outlets, it is "a system developed by traders, for traders."
You can check out the official Spectre website for more information and regular updates.