Sharing Our WhitePaper
A Quick Summary with Links to More Details
We are excited to release our WhitePaper! In it, we provide helpful detail on who we are, the motivation behind our creation, how to use Covey, and, most excitingly, explanation of our rewards system.
Motivation
The best investment managers are not managing our money. Dollars are not flowing to the right people to handle our investments. High minimums at hedge funds means access is barred all too often. And decades of mediocre returns at mutual funds without innovation means trust in performance is declining. These dynamics have forced the average investor to go up against the market alone. Covey is on a mission to empower everyone to create wealth. We are changing today’s investing model from exclusive and stale to
transparent and peer-powered. Because together we can make more
money than apart.
Basics
Covey is a community designed and owned protocol to find the best money Managers. Analysts can share portfolios, investment ideas, and compete in real time. The best Analysts are rewarded based on a transparent track record and community governed reward algorithm (we call it the “Alpha Algo”). Investors benefit from the shared wisdom and can allocate money to the best ideas.
How To Participate
It’s easy (and free)! Create an account or log into your account on covey.io, start adding equities, ETFs, and cryptocurrencies to your portfolio and click save. As a reminder, this is a risk-free, virtual portfolio. No actual money is required.
In order to receive rewards in the form of $CVY tokens, you will need to connect (or create) a MetaMask wallet. The monthly Alpha Algo competition resets each month so be sure to adjust your portfolio each month to qualify for the next competition.
How to Earn $CVY Tokens
The Alpha Algorithm offers a community governed approach of distributing tokens to the best analysts. It answers the question: Who is a great analyst?
Our first inclination was to payout monthly rewards based on percent monthly performance but that encouraged excessive leverage which rarely works out in the long term. So we needed a way to rewards analysts over the short term while thinking long term about their portfolio. The basics of the Alpha Algo are:
Rewards = (Monthly Performance + Idea Quality) * Stake Modifier
Check out the WhitePaper for more details on the exact math behind Monthly Performance, Idea Quality, and the Stake Modifier.
Staking adds skin-in-the-game for a virtual competition. It forces analyst to stake their account with tokens to 1) prevent spam accounts from registering thousands of times over and having random portfolios win all the rewards, and 2) introduce a risk to an account going bankrupt by slashing their tokens.
Of course, because you need tokens to Stake, and the token is not widely distributed yet, we are using Days Since First Trade on Covey as a proxy for an Analyst stake. Staking will be live in Q1 2023.
The $CVY Token
The best analysts earn rewards — tokens — which allows anyone to recognize the members contributing the most to the community.
However, tokens are much more complex (and meaningful) than reward payments. The purpose of the token is to incentivize the community of analysts towards becoming the best money manager AND to share governance and the value of the data created. The utility of the token is based on: governance, staking, and discounts.
Governance
Analysts are ranked and rise to the top of the leaderboard based on a member-governed Alpha Algorithm. Tokens allow users to vote in the 1) Alpha Algorithm, 2) assets to include in the monthly competition, 3) future blockchain networks to be added to the platform, and 4) a discount table for holding tokens.
Staking
At Covey, we pride ourselves on being a meritocracy. Therefore, anyone can post ideas (trades) to the ledger and participate in the competition. Staking prevents spam accounts from receiving tokens and improves manager discovery. Staking is an analyst confidence metric, pushing those with the highest confidence to the top.
Discounts
Token holders get discounted fees for any investment product built on Covey. In 2023, Covey will be launching an app to allow anyone to invest alongside the best analysts. This will allow retail investors to invest alongside the top performing analysts by copying their portfolio. Token holders will get a discount on the copy trading fees.
Next Steps
We are sharing the WhitePaper with our community because we want feedback on the protocol. We are embarking on a search to find and reward the best Analysts on the planet, this will require the help of the community. Head to discord and join our discussion: We are chatting about staking and the Alpha Algo this week!
See below for the full WhitePaper 👇
Big Thanks To Our Community
This WhitePaper was the product of team members at Covey working with our community of Analysts. We would not have been able to design this protocol, especially the Alpha Algo without your help. Many thanks!!
Together, we will beat the market.
Start trading today @ covey.io
