ZIGDAO White Paper

Since its first appearance 200 years ago, the traditional finance market has transformed to become an integral part of our everyday lives. Throughout the years, new products and concepts have consistently emerged to shape the market as we know it today. One of the most important aspects of the financial markets of today is cryptocurrencies.

It is often the first-time investors who suffer heavily in the market. A report by The Guardian explains the reasons behind their failures. ‘These new investors, the report found, used social media for tips, were overconfident, invested for short-term thrills rather than long-term gain, and often did not understand the hazards.

To dive deeper into this problem, we turn to data to shed light on the public perception of investing in crypto. According to statistics, 75% of Americans don’t trust crypto, and nearly half of traders say their investments have performed worse than expected. This isn’t something new. A survey by Forbes also mentions that 34% of people do not understand the market, and 21% believe that crypto performs poorly as an investment.

As outlined by research, the phenomenon of ‘Relying on Randomness’ is the most significant factor behind traders suffering massive losses. People look at the market, make a couple of trades in profit, and consider themselves to have an understanding of how the market works. This self-belief has clouded the judgments of most people interested in investing in cryptocurrencies.

If we look at it, it’s the inability of traders to trade successfully that has given the name ‘The Market of Speculation’ to the cryptocurrency market and not the other way around.

However, the story does not stop there. There is a deep underlying problem behind low crypto adoption in the masses. That problem is Income Disparity. Historically, those in lower income brackets have been excluded from investment opportunities.

They either don’t have the knowledge to start trading, especially in crypto, or don’t have access to fund managers who can manage their hard-earned money in a bid to help them achieve financial freedom.

The wealth is controlled by these 1% - Whether the market is in a bullish or bearish phase, these 1% are still earning. It’s the people with their life savings invested in the market that truly suffer the brutal impacts of the market cycles. These impacts are not just financial impacts but also impact the mental health of these often first-time investors. Similarly, for fund managers and investors, navigating the complex landscape of investment management brings its set of challenges. Accounting, tracking, and overall management tasks make the investment process laborious and complex. Moreover, the need for more transparent, standardized metrics complicates the process for investors to select suitable fund managers who align with their requirements. Furthermore, even the most skilled fund managers face constraints when it comes to monetizing their expertise, often missing platforms to showcase their capabilities or expand their reach. On the other hand, individuals or teams skilled in marketing, or those with active communities, seek avenues to benefit their communities and earn from it. However, creating and maintaining portfolios demands an extensive commitment, knowledge base, and time. However, time is something that our audience is always short on.

This ongoing cycle and the problems discussed earlier, form the core of ZIGDAO’s philosophy.