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What is a Marketplace Provider?

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A marketplace provider specializes in providing a trading platform for blockchain based digital securities.  These platforms act as a secondary marketplace where investors can buy/sell digital securities.  In doing so, these assets gain higher levels of liquidity, which would not be attainable otherwise.

Antoine Tardif is the founding partner of Securities.io, the CEO of BlockVentures.com, and has invested in over 50 blockchain & AI projects. He is the founder of Unite.AI a news website for AI and Robotics. He is also a member of the Forbes Technology Council.

Stocks

How to Buy Stocks – A step by step guide to investing in the stock market

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How to Buy Stocks – A step by step guide to investing in the stock market

Investing in stocks is the most accessible way for the average person to participate in the growth of the economy. For more than 100 hundred years, the stock market has outperformed other asset classes like bonds, commodities, and real estate. Yes, there are thousands of stocks available to investors, and investing can be complicated – but it really doesn’t have to be. There are very simple ways to invest, and you can get started with relatively little capital. If you find the idea of buying stocks daunting, the following step by step process will help you get started.

1. Decide on your investing strategy

Your first step is to decide on an investing strategy, as this will help you decide on the best broker for your needs. If you plan to use a hands-off approach like buy and hold, passive, or value investing you will be making very few trades, so the commission you pay won’t have a big impact on your account. You also won’t need a very sophisticated platform to execute trades, though access to some research may be helpful.

On the other hand, if you plan to adopt a hands-on investing style, like momentum or growth investing, you will be trading more often, and your trading commissions will add up. So, the commission rate will be an important factor in choosing a broker. You may also need a platform with more features, and access to up to date research.

It’s also important to make a distinction between investing and trading. If you are investing, you are concerned with the value of a stock, whether the value will increase, and how much the stock price differs from its value. Your timeframe will typically be from one to five years, and you will not react to short term price movements.

Trading is all about the short term, supply and demand and price action. Traders have much shorter timeframes, ranging from minutes to months. Traders often use leverage to improve their returns too.

Trading can be very profitable but comes with more risk and is a lot more time consuming. If you plan to trade actively, you may want to choose a broker that gives you access to a margin account or derivatives too.

2. Choose a broker

To buy shares in a listed company, you will need an account with a stockbroker. Strictly speaking, it is possible to buy shares in other ways, but it’s a lot easier with a trading account at a broker. Stockbrokers are firms that are members of exchanges and are responsible for sending your buy order to the exchange where it will be matched with a sell order from a client of another broker. Stockbrokers are also responsible for settling the trade after it has matched.

In this day and age, online brokers are almost always the way to go. Commissions are lower, and online trading platforms give you a lot of control over your orders. If you are prepared to pay more, you can open an account with a full-service broker, allowing you to place orders over the phone and ask for advice.

The largest online Brokers in the US are TD Ameritrade, Fidelity, Charles Schwab, and E*TRADE, though there are other very good online brokers too. Several brokers even offer commission-free accounts now, though you may need to pay other fees to maintain the account.

When choosing a broker, you will need to consider commissions and other fees, the platform, tools, and research they offer, and the level of support you can expect. Try to find a few independent reviews on each broker to find out what their strengths and weaknesses are. You should then be able to make a decision on the right broker for your needs.

A broker that we recommend is Firstrade.

3. Open and fund your account

Once you have decided on a stockbroker, you will need to open an account. Most brokers make this as easy as possible. You will need to provide a few personal details, and a few documents to prove that you are who you say you are. The entire process shouldn’t take more than a few minutes.

Once your account has been verified and approved, you will be able to fund it. A wire transfer is typically the fastest way to get money into your trading account, but you can also fund your account by check.

4. Learn how to use the trading platform

Typically, an online broker will allow you to open a demo account. This is an account with fictitious money in it, but with access to live prices and all the same tools as a live account.

The main reason for demo accounts is for active traders to practice trading, also known as paper trading. This is more relevant to short term traders than to investors, but it also gives you an opportunity to get to know the platform. You can practice entering orders, set up a watchlist, and find out which tools you may want to use in the future.

When you are entering ‘practice orders’ it’s important to ensure that you have in fact logged into your demo account, and not your live account.

Before you get started, it’s worth knowing the following terms which will come up often:

  • Bid – A bid is an order to buy stock.
  • Bid Price – The price of the highest bid is the market bid price.
  • Offer – An order to sell a stock is an offer. The price of an offer is the ask price.
  • Ask Price – The price of the lowest ask/offer is the market ask price.
  • Spread – the spread is the difference between the market bid and ask price, also known as the ‘bid-offer spread’. The bid and ask price are also known as the ‘double.’
  • Market order – A market order is executed immediately at the current market price. A market order to buy will be executed at the ask price, while a market order to sell will be executed at the bid price.
  • Limit order – a limit order is an order to buy or sell a stock at a specific price, or limit. Limit orders are only executed when a corresponding order at the limit price is entered into the market.
  • Stop-loss order – A stop-loss order is executed if the price crosses a threshold level. If you buy a stock you can enter a stop-loss order to sell if the price falls below a certain price. This is done to limit losses.
  • GTCGood till canceled orders remain in the market until they are canceled.
  • GFD – Good for day orders remain in the market for the remainder of the trading day.
  • FOK – Fill or kill orders are automatically canceled if they are not filled immediately.

5. Create a watchlist of stocks

A watchlist is a list of stocks, or other securities, along with their prices -either live prices or daily closing prices. All online brokers give you the ability to set up a watchlist. Besides the price, you can add other columns like volume, bid price, ask price, and daily percentage price change to your watchlist.

You should also add a few indexes to your watchlist so that you can compare the performance of each stock against the performance of the overall market. The important indexes to watch are the S&P 500 and the Nasdaq 100. If you can’t add the index itself to your watchlist you can add an ETF that tracks the index instead. The performance of the SPY (S&P 500) and the QQQ (Nasdaq 100) ETFs will be just about identical to the indexes they track.

The stocks on your watchlist are those that you will track and learn more about, but not necessarily buy. Start with companies you like and admire – because these are the companies you probably know a little about.

Once you have a handful of stocks on a watchlist you can begin to compare their performance to the market. You should also start learning more about the companies and how well they are doing. Find out whether their revenue is growing and how profitable they are compared to similar companies. While you do this research, you will probably come across other stock’s worth investigating, and you can add these to your watchlist too.

If you are unsure about picking individual stocks, you could consider ETFs. An ETF, or exchange-traded fund, is a basket of stocks that can be traded just like a stock. You can learn everything you need to know about them from our in-depth series of articles on the ETFs.

6. Decide how much to allocate to each stock

Investors are rewarded for taking risks, but that risk needs to be managed. Regardless of how much research you do, you can never be sure of the future. The most important step you can take to manage risk is to make sure one bad investment doesn’t wipe out your portfolio. Diversifying your investments across a portfolio of stocks is the equivalent of making sure you don’t have all your eggs in one basket.

There are two rules of thumb you can use to decide how much of your portfolio to allocate to each stock. The first is that a properly diversified portfolio should have at least 15 to 20 stocks in it. That means you shouldn’t invest more than 6.7% of your account in each stock.

The second rule of thumb is that you shouldn’t risk more than 2% on each stock. That implies that if you are prepared to lose up to 20% of the value of a single stock, you should limit that stock to 10% of your portfolio (20% of 10% comes to 2% of the portfolio). This approach is more appropriate for active traders who use stop losses.

To further reduce risk, you should spread your investments across a few different sectors. Stocks in each sector tend to be highly correlated, so your risk is higher if all your stocks are from the same sector. An even simpler way to diversify is to invest the bulk of your portfolio in an ETF. That way you will be spreading your risk across the entire market. You can still keep 20 to 40% of your account for individual stocks you really want to own and invest the rest in an ETF.

7. Decide which stocks you will buy and when you will buy them

By now you should have a good idea of the stocks you want to own or may want to own in the future. Rather than rushing out and buying these stocks, you should formulate a plan. Your plan should be based on your reasons for buying the stock, and your time horizon.

Very broadly speaking, there are three approaches you could use:

  • Long term investments in blue-chip stocks

Blue chips stocks are the stocks of very high-quality companies with long track records and relatively predictable earnings. They are usually leaders in their industries with a distinct competitive edge. The prices of these stocks don’t typically appreciate a lot each year, but compound steadily over the long term. Buying blue-chip stocks should be a long-term commitment of 10 years or more.

If you are buying blue-chip stocks to hold for a long time, there is little to gain by trying to time your entry. If you don’t want to buy them in one go, you could stagger your buying over a few months – but ultimately your objective is to own the stock for a long time, and there is no point overthinking your entry price.

  • Buying growth stocks and stocks with momentum

The stocks that tend to appreciate the most over shorter periods are those of rapidly growing companies. Often, the price momentum alone will attract more buyers causing the momentum to continue. Buying these types of stocks requires a more hands-on approach as the momentum is unlikely to continue forever. If the price is too high, the long-term return is unlikely to be very good, and the stock price may fall substantially.

If you are buying growth and momentum stocks, you need to weigh up the company’s earnings growth, the valuation, and the stock’s price momentum. Often, you will need to buy the stock when the price is already in an uptrend. If the price stops rising, you will need to pay close attention to the company’s growth and valuation to decide whether you will remain invested.

  • Buying after a stock price correction

The best time to buy most types of stocks is after a market crash or a sharp correction. This is when the entire market will be ‘one sale’. This is the best time to buy shares in any company with a good business model and not too much debt.

Individual stocks may also offer an opportunity when their stock falls out of favor with investors and the stock price declines substantially. But not every stock recovers, so you should carefully consider the company’s long-term prospects. It’s also a good idea to wait for the price to stabilize before buying – prices can fall a lot further than you might think they can.

Before you actually buy a stock, you should also decide on the criteria you will use to exit the stock. Having a plan before you buy the stock will prevent you from making impulsive decisions later.

Your exit criteria should also be related to your reasons for buying the stock in the first place. If you buy based on price momentum, then you may want to exit if the momentum stops. But, if you buy based on the company’s fundamentals, then you should only sell if those fundamentals change, not because of the price action.

8. Enter your first buy order

Sooner or later a stock will meet all your criteria for investing and it will be time to make your first investment. The first thing to do is to calculate the number of shares you will buy. You have already decided how much you are going to allocate to each share, so you just need to divide that amount by the share price. Making sure you are dividing a dollar amount by the dollar price and not the price in cents.

Before you enter your buy order, you will need to decide whether you’re going to use a limit order or a market order. Usually, a limit order is safer. A market order might result in paying too much if the bid-offer spread happens to widen when you enter your order. But, if the market is moving very fast, a market order may be more appropriate.

Decide on a reasonable price given the trading range for the last few days and for the current day.  This will be the limit price for your order. In most cases, your limit will be a price that you think has an 80% chance of being filled.

A higher limit price will give you more chance of your order being filled – but will eat into your profit.

A lower limit price will give you less chance of the order being filled – and this may result in you having to then pay an even higher price. However, if your time horizon is short and you are looking to turn a quick profit, you may need to aim for a lower price.

Now that you have bought your first stock, you need to manage the position according to the criteria you used to buy it. You may begin to doubt your decision if the stock price falls. You may also be tempted to sell if the price rises and you find yourself with a profit. Remember to keep your long-term plan in mind and stick to it – the price will rise or fall each day, but that doesn’t mean you need to act.

Conclusion

Now that you have bought your first stock, you can carry on slowly adding new stocks to your portfolio. There should be no rush though – investing is a long-term game. You should also keep learning and reading as much as you can about investing and stocks. Start out with ETFs and blue-chip stocks and add slightly riskier stocks later. Keep your long-term plan in mind and avoid impulsive decisions – the market rewards patient investors.

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Thought Leaders

Evolving Trends in Token Powered Networks: Part 1

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Evolving Trends in Token Powered Networks: Part 1

by Mara Schmiedt, Global Strategy and Business Development Lead, ConsenSys Codefi

Summary

  • Regulatory scrutiny has increased, which has resulted in initial token distributions taking place in private rounds of accredited investors. Proposals such as the Safe Harbor present a first step in the direction of formal regulatory guidance that bridges the gap between regulation and progressive decentralization
  • Private infrastructure and capital providers are increasingly evolving into Web 3.0 native business models, uniquely positioned to support early stage bootstrapping and ongoing participation in decentralized networks
  • The road to Proof of Stake is transitioning from its lengthy research phase and genesis implementation to growth

Since 2016, a range of different token and network launch models have been deployed in an attempt to increase network participation and grow their respective communities. To date there have been +4000 attempts, test runs, and failures to efficiently and fairly distribute tokens to users that strengthen participation in a decentralized network, while avoiding a security-impeding concentration of holdings.

Have these attempts led to a golden blueprint for the right way to launch a network? The truth is, there is no archetypal, one-model-fits-all model, but one thing is certain: as the industry matures, token launches will increasingly evolve and coincide with actual network launches. What could be more fruitful than utility tokens with actual utility?

What is the outlook today? Let’s take a look at ecosystem trends and how these have evolved over time in the light of recent regulatory, technical developments, and the emergence of new players on the token-powered playing field.

 

Trend 1: The Regulatory Landscape

WHO IS ALLOWED TO SELL WHAT, TO WHOM AND WHEN…

The once proliferating, open-to-all token sale landscape that attracted early users, speculators, innovators and scammers alike, is a thing of the past and has seen recent shifts as regulators catch up to innovation.

‘It is during the development phase that questions about the securities/non-securities line seem to be most difficult to resolve.’ – Hester Pierce, SEC Commissioner

Arguably, with a fully functional network there is less need for participation restricting and complex legal agreements when ambiguity can be mitigated by ensuring that tokens are actually used instead of simply bought. Yet this requires the availability of a fully-functional network.

In an attempt to address impending compliance concerns, initial token distributions are therefore increasingly taking place in private rounds of accredited investors. Some have pointed out that these recent developments undermine what open-source protocols set out to achieve in the first place: putting tokens in the hands of users whose incentives are aligned with utility maximization of the network, rather than profit maximizing investors and private companies.

Finding a viable, compliant, and distributed funding model to finance the development of a to-be decentralized network, while ensuring tokens end up in the hands of long-term participants presents an ongoing, two-fold challenge. Proposals like the Safe Harbor and the proactive setting of rigorous, industry-leading standards, present a first step in the direction of potentially bridging the gap between regulation and decentralization.

 

Trend 2: The Rise of Proof of Stake

…AND WHY 2020 IS A MONUMENTAL YEAR FOR THE FUTURE OF PROOF OF STAKE

As of September 16 2020, the cumulative market capitalization of stake-able crypto-assets is $35.7 billion, with over a half (~52%) of this value currently locked in staking.

Evolving Trends in Token Powered Networks: Part 1

Source: Stakingrewards.com, 2020

Proof-of-Stake (PoS) networks utilize staking rewards, which are minted by the protocol, as an incentive mechanism to ensure users participate honestly in validating on-chain activity.

Today, it’s all about Proof-of-Stake chains entering the market. With layer 1 blockchains such as Tezos and Cosmos, as well as layer 2 solutions such as Matic and Loom launched in 2019, the lengthy research phase on the road to PoS is finally transitioning from genesis implementation to growth. In 2020, the long-anticipated launch of eth2 and Ethereum-powered DPoS layer 2 solutions such as SKALE mark a pivotal moment for the future of Proof-of-Stake adoption.

Moreover, the recent developments in Proof-of-Stake systems reveal the importance of designing and optimizing the initial launch of the network to achieve desired participation rates and ensure long-term viability. Within this context it is critical that pure or delegated Proof-of-Stake protocols distribute tokens so that a sufficient number of different actors can stake tokens and run nodes to secure the network. Poor and disproportionate distribution across individual actors can impair the network’s security or influence the general perception of the legitimacy of the networks’ governance.

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Cryptocurrency

Investing In Kava – Everything You Need to Know

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What is Kava?

Kava is a next-generation decentralized lending platform that seeks to bring new flexibility to the market. The network is known for its cross-chain capabilities and unique lending strategy. Today, the platform offers a range of products with its two main being collateralized loans and stablecoins. To date, Kava has paid out $1,129,883.32 in interest payments to its users.

What Problems Does Kava Attempt to Fix?

Kava developers seek to streamline the decentralized lending sector via the integration of a variety of proprietary technologies. Developers specifically developed the system to provide stablecoins and decentralized lending against all major crypto assets in a more transparent and simplistic manner. Consequently, Kava is a pioneer in the DeFi sector that continues to draw international media attention.

How Kava Works

Users of the network can collateralize their crypto assets in exchange for USDX. USDX functions as Kava’s stablecoin in the network. To receive USDX loans, users just need to lock up their crypto in a smart contract on the platform. This locked up cryptocurrency serves as collateral against your loan.

Investing in KAVA

Users may take out multiple collateralized loans to create synthetic leverage for any supported crypto asset in the system. For example, you could choose to lock up your Bitcoin or XRP using the protocol. You would receive an equivalent amount of newly minted USDX to purchase more Bitcoin with. In this way, you gain a leveraged position in the market.

Kava also encompasses a wide variety of community-built applications. Each of these Dapps adds to the overall UX of the platform. This interoperability allows you to store your assets using a variety of hardware wallets and institutional-grade custodians. This flexibility is one of the main draws to Kava versus the competition.

Decentralized Loans and Leverage

The main product of the Kava platform is decentralized loans. All Kava users gain open access to loans, leverage, and stablecoins for hedging. In this way, Kava acts as a powerful tool for investors in the market.

Stablecoin Hedging + Interest:

Another unique feature of Kava is its stablecoin’s capabilities. You can stake and bond USDX stablecoin to start yielding a healthy passive income.

Expansion

Kava features a unique open architecture that enables future growth. The platform will support a wide range of new crypto assets and offerings in the coming months. These new synthetics and derivative products will push Kava adoption to new heights.

Dual Tokens

Kava utilizes a dual token strategy to ensure that each user gains the maximum flexibility and usability possible. Dual token platforms are more common than ever in the market. This strategy allows developers and users to maximize their functionality without detracting from either sector. The two coins that are critical to Kava are USDX and KAVA.

KAVA Tokens

KAVA is the native token for this blockchain. This coin functions as the governance token within the ecosystem. Users need these tokens to vote on critical parameters. These votes are what guide the network’s upgrades. They are also used for proposals and voting on specific parameters of the collateralized debt position (CDP) system.

Security

This crypto also plays an integral part in maintaining the network’s security. Users stake KAVA to accomplish this task. Notably, only the top 100 nodes in the network validate blocks in this system. The top token holders are determined using an algorithm that examines each user’s weighted bonded stake in KAVA tokens. For their effort, stakers earn crypto as block rewards.

Staking Asset

Stakers in the network hold a couple of responsibilities as well. Aside from securing the blockchain, these users can further stake their holdings utilizing bonding curves of network validators.  Malicious nodes can lose their Kava. Actions such as failing to ensure high uptime and double signing transactions are sure to get you removed from this network. Kava is known for its zero-tolerance of malicious nodes.

Last Resort Lender

KAVA can also function as a reserve currency for the network. If USDX becomes over collateralized, the network will mint new KAVA to utilize in the purchase of USDX. This allows Kava to ensure its stablecoin retains its value.

USDX- Kava

USDX is the stablecoin for the Kava network. This financial instrument is what you receive and pay back your loans in. It also functions as a general payment system. USDX features fast transaction times making it an ideal stablecoin for payroll and other corporate-related payment processes.

Margin trading/leverage

Kava users will also utilize USDX to purchase additional crypto assets on the platform. This strategy permits skilled investors to effectively leveraging their exposure in new ways.

Hedging with Interest

You can also hold USDX as a stable asset. In this way, USDX functions as a safe haven during times of market volatility. Keenly, when USDX holders bond their tokens, they receive accumulate interest equal to the current USDX savings rate.

COSMOS Blockchain

Kava resides on the futuristic Cosmos blockchain. Cosmos is a fourth-generation blockchain that seeks to help categorize and leverage the growing number of blockchains in the market. Specifically, the platform was built using Cosmos-SDK. This protocol is an open-source framework for building public Proof-of-Stake blockchains. Cosmos has a native token called ATOM.

Consensus

Kava operates with a Tendermint-based Proof-of-Stake (PoS) consensus mechanism. This upgraded PoS consensus mechanism utilizes a Byzantine Fault Tolerant consensus engine. Impressively, this mechanism is far more energy-efficient than early blockchains such as Bitcoin or Ethereum. In many ways, the network is similar to MakerDAO with the integration of CDPs. However, Kava better leverages the zones from Cosmos to add access to cryptocurrencies running on independent networks

KAVA Statistics

KAVA Statistics

Modularity

Cosmos is best known for its use of open-source modules. These protocols allow developers to quickly implement desirable functionalities into their Dapps. For example, Kava utilizes the Inter Blockchain Communication (IBC) module to provide the platform with the ability to communicate to all Cosmos-SDK blockchains.

Modules Used in Kava Ecosystem

There are four main modules in use within the Kava ecosystem. These modules help the network to function properly and provide users access to some unique financial tools.

Price-feed Module

The first module integrated into this network is a price feed mechanism. This module is a simple price oracle. Oracles are off-chain sensors that can provide data to blockchains. A group of white-listed oracles posts prices for various assets in the system. The protocol then determines the median price of all valid oracle prices. This data also determines the current price in the system.

Auction Module

The Auction Module allows users to utilize three types of auction protocols. The first option is the forward auction. This is a traditional auction where the buyer will solicit raising bids for an item. This strategy is employed whenever the platform sees a surplus in collected fees. This mechanism allows the system to convert the surplus into more stablecoins.

The next type of auction the network allows is reverse auctions. As the name implies, this auction consists of decreasing bids for a particular item or lot of items. Primarily, this protocol functions to sell governance tokens in order to mint new stable coins. This strategy is used to make up the difference between failed collateral auctions and debts.

CDP (Collateralized Debt Position) Module

The CDP module serves a critical function. It allows users to create, modify, and close CDPs for any collateral type. Additionally, this is the coding used to set the global parameters of the system. These settings cover items such as debt limits and the total circulation of stablecoins in the market.

Liquidator Module

The Liquidator Module is the repo man in the network. This is the protocol that is responsible for seizing collateral from CDPs whose collateralization ratio is below the threshold set for that collateral type. This module automatically tracks the status of CDPs to make determinations. The final decision of the module is based on prices received from the Price-feed module.

Seized Collateral

Any collateral that is seized by the liquidator module goes to the Auction module. Here, the collateral auctions for stablecoins using a forward-reverse auction. The goal of this process is to wipe out the debt held initially plus the addition of a small repo fee.

How to Buy Kava

There are a lot of platforms that offer KAVA currently. Binance currently shows the most trading volume. You will need to first register for these platforms to participate in trades. Once you are all set up, you just need to fund your account. Once you have Bitcoin in your wallet, you can simply go to the KAVA/BTC trading pair and select the amount you wish to trade. The entire process is quick and painless.

Fees

0.1%

Per Trade

Fees

0.09%

Per Trade

Fees

0.1%

Per Trade

Account Minimum

None

Account Minimums

None

Account Minimums

None

Promotions

10% Cashback

Discount Code: EE59L0QP

Promotions

None

Promotions

Free Airdrops

Exclusive to Securities.io

How to Store Kava

You have three options to consider when storing Kava. The first is a PC-based network wallet. You can download the Kava application for free. It’s secure and easy-to-use. There is also a multitude of mobile wallet options available. Make sure your mobile wallet supports staking rewards such as the JAXX wallet available on iOS and Android.

For serious investors, a hardware wallet is the best move. The Ledger Nano S is one of the most popular hardware wallets in the world and it allows users to earn their staking rewards. Hardware wallets are safer than other options because your crypto remains offline. This method of storage also goes by the name “cold storage.”

Kava – More Opportunity for Rewards

The latest DeFi craze has made the crypto sector even more profitable than initially imagined. Regular users are earning hefty rewards via these platforms. Protocols such as Kava make it possible for anyone to enjoy a reliable passive income. For these reasons, Kava is sure to be a major contender in the DeFi sector moving forward.

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Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies involves a high level of risk.

This risk is  higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

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