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district0x / district-proposals

Proposals for new districts to be built by the district0x Team.
https://vote.district0x.io/
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QuantCollab - Match-making traders and coders #257

Open ykgoon opened 6 years ago

ykgoon commented 6 years ago

Name:

QuantCollab - Match-making traders and coders

Purpose:

Match-making between quantitative traders/researchers/analysts with software developers to collaborate on producing trading algorithms.

Description:

It takes a variety of skills to produce money-making trading algorithms. These skills may include data-science, risk-management, quantitative analysis, software engineering, among others.

An increasingly competitive trading landscape requires a trader to acquire every skill possible in order to stay afloat in the market.

A better way is to put together different domain specialists to develop trading algorithms, test, iterate, deploy, and share the product among group members.

This district facilitates the forming of countless amout of small-groups. Within each group, members collectively own the produced trading algorithms (aka trading-bots).

User story

Here's a typical imagined use-case.

  1. A quantitative trader has an idea for exploiting a market inefficiency, but does not have the code chops to put it into a system.
  2. Trader comes to this district, found a developer who is interested to work with a quantitative trader.
  3. Developer and trader form a two-person group within this district, start collaborating and develop a trading bot.
  4. A new trading bot is produced, but only the developer and the trader are able to run it. This district provides the facility to lock a trading bot from outsiders.
  5. Developer get confident enough with the results, proceeds to run this trading bot on his own, using his own capital.
  6. Trader does so similarly and make profit for himself.
  7. After some profit, they decide the trading bot needs better money management.
  8. Two of them decide to recruit a new person into the group to help. To do so they propose and design a tokenized-incentive for new members.
  9. A new money-manager joins, contributes and gains the permission to use the trading bot.
  10. The trader comes up with another idea for an algorithm. The group comes together again and produce the second trading bot.
  11. However this time trading-bot-2 loses money (nothing is guaranteed).
  12. The developer (while staying in the group) decides to explore with another trader. He found another trader in the district and form a new collaboration group.

Special district facilities

This is first and foremost a marketplace to form algo-trading collaboration groups.

However collaboration has a life cycle. It first starts from match-making, then proceeds to discussion, execution, testing, feedback to delivery.

This district should ideally provide value by facilitating each phase of the life cycle.

Most collaboration tools (discussion rooms, version control, etc) already exist. Not much imagination is needed to put them together for this district. However there are some aspects that need special treatment.

Ownership of trading bots

A trading algorithm is a special class of software that defies the convention of "information wants to be free". It very much wants to be the opposite. (The scope of why so is beyond the discussion of this proposal)

A trader would be wary of sharing alpha ideas if there's a risk of end product being leaked to the wild by fellow group members. Or worse, being sold for profit without a cut.

Therefore I propose a tokenized multi-signature mechanism to be embedded into trading bots. This mechanism comes in the shape of a library, using it does a few things:

  1. It associates ownership of the bot with the group.
  2. Trading bots can only be read, written and executed by group members.

That said, I acknowledge that weak-link still lies with the coder. There's nothing stopping the coder in the group to create a similar but separate trading bot independent from this district altogether. This weakness warrants further discussions.

Ethereum Address:

0x5D4B67faB585eC9Ccd341eA9cE32C4A71840747D

Bradymck commented 6 years ago

Interesting. I like this, a token registry for developers, reputation staking, or even traditional legal solutions could fix the issue here. I'm not entirely sure what the legal ramifications of this type of market could be so I'm not sure what solutions would be best.

What do you think about a token registry for bot developers?

Surely the trader won't leak the bot and if the bot is found in the wild I'm sure people would know who leaked it. I'm not sure how developers would feel about being placed into a TCR. This opens the door for many moral discussions about tokenizing people. There are a lot of issues with it.

I keep thinking of how this would work for musicians, it's the same issue. We need to tread lightly because tokenizing people can lead very quickly to something like a curation market like Stiffs.com. It's a genuine worry I have. Especially considering the fact that decentralized future's markets are coming online. It's a hop skip and a jump to a decentralized assassination market.

However, if the issues can be solved without devolving into a dystopian nightmare, this could empower a lot of people. Not just developers.

ykgoon commented 6 years ago

@Bradymck thanks for chiming in.

Surely the trader won't leak the bot and if the bot is found in the wild I'm sure people would know who leaked it.

Be that it may, I think we shouldn't make that assumption as a rule of thumb.

token registry for bot developers

I only get a vague sense of what this means. Is any an analogy to this, or something that is practiced by other crypto projects?

I just looked at stiffs.com and I get the moral hazard you mean, but I fail to relate it to this proposal.

Bradymck commented 6 years ago

Apologies for the delayed response.

Let me clarify. Basically, a token registry could be something similar to the game Crypto Celebrities, which lets you speculate on the popularity of an individual as an ethereum based token.

As far as a registry it takes this type of crypto economic game a step further and allows a community of token holders to dictate what becomes a token through an incentivized voting game.

The main concern I have is admittedly a concern with a lot of disconnect from the current models.

However, assassination markets are a concern that everyone building curation markets has.

Mike Goldin even expressed this concern in the stream I did with him recently: https://youtu.be/xw0DVdzbjo8?t=21m34s

So tokenizing people has some interesting aspects to it that I would love to try for music but it really opens this door up to a really dark place if we are not careful.

Bradymck commented 4 years ago

Hey @ykgoon

I'm not sure if you're aware but we recently launched a new bounty to migrate your proposals to the actual District Registry: https://registry.district0x.io/

We're replacing the old voting app with the registry. Let me know if you need help but I would love to see you migrate this over so you can claim your DNT.

It does take a 10,000 DNT submit to submit your proposal but this gives you an extra 2000 you can stake in the registry beyond the deposit amount.

Hit me up on Telegram or Discord if you need help or have questions.

Telegram: https://t.me/district0x/75217 Discord: https://discord.gg/P9RQejv

PS, please excuse the canned response. I am encouraging everyone here to start migrating so they can claim their 12000 DNT.