Zignaly, a Crypto social investment platform, has been connecting retail investors with expert traders under its flagship profit sharing service since 2021. In a short period, the project has reported more than 350,000 real global users, US$ 120 Million in assets under management with US$ 4 Billion of volume traded since inception.
With the restrained acknowledgment of Crypto in India, interest in the sector is at an all-time high. Crypto projects are rushing to capture the Indian market. As for new investors, they are similarly making their way to different platforms searching for making their fortune.
The Indian government may have chosen to tax Crypto gains similar to the tax rates on games of chance. This, however, does not mean that retail investors share this view. Allocations to this segment are not gambling money for retail investors. They crave the safety of their principal & to make educated investing decisions.
If you are concerned with making it in Crypto but are not sure where to start, this article is for you.
If you know about Crypto but cannot give Crypto trading the requisite time and effort, this article is for you.
Alright then, let’s begin
- What is Zignaly?
- What Problem Statement is Zignaly Aiming to Solve for the Crypto market?
- Who is Zignaly Profit Sharing For?
- What are the Services offered by Zignaly?
- What is Zignaly’s Crypto Profit Sharing Service?
- What are the Key Features of Zignaly’s Crypto Profit Sharing Product?
- How to Invest with Zignaly Profit Sharing?
- What is Zignaly’s Profit Sharing Fee Structure?
- Is Zignaly Profit Sharing Safe?
- Is Zignaly Legitimate?
- Could you Lose money with Zignaly’s Profit Sharing Service?
- How does Zignaly Make Money?
- How does $Zig Coin Fit In?
- What are the Project’s limitations?
- What About the Competition?
- Final Verdict?
What is Zignaly?
Zignaly is a social investment platform connecting retail investors with expert Crypto traders.
In its simplest form, consider it to be a marketplace where vetted expert traders offer digital assets trading services to clients.
What Problem Statement is Zignaly Aiming to Solve for the Crypto market?
At the heart of the Zignaly thinking is the understanding that trading in the Crypto markets is volatile & driven by market technical factors in the short term. These conditions present two major problems as follows:
- Investors lack the knowledge and skills to undertake Crypto trading, leading to suboptimal decision-making.
- Investors lack the time to undertake Crypto trading, which leads to execution risk.
Who is Zignaly Profit Sharing For?
The Zignaly problem statement appeals to:
- Beginners, as they lack the knowledge and time to undertake educated investing decisions;
- Traditional portfolio managers that are allocating own and client assets to Crypto and would like to delegate research and/or execution to experts while they focus on other aspects of client investing;
- Expert traders who would like to supplement their earnings through the provision of asset management services to others.
What are the Services offered by Zignaly?
Zignaly offers three broad services – Signals, Copy Trading & Profit Sharing. As per the latest updates, Zignaly is closing down both Signals & Copy Trading to focus completely on the profit-sharing service.
This article deals solely with the surviving flagship service.
What is Zignaly’s Crypto Profit Sharing Service?
Profit-sharing is an asset management concept whereby various investors pool their funds with or exclusive of an asset manager’s funds. The asset manager invests the pool to a stated strategy and generates returns on behalf of the entire pool.
If the asset manager makes a profit, part of the proceeds goes to him as a success fee. If the asset manager incurs a loss, he is not rewarded for his efforts.
What are the Key Features of Zignaly’s Crypto Profit Sharing Product?
The Zignaly profit-sharing product is Crypto focused and has the following key features:
- Invest with as little as US$1 hence no barrier to entry;
- A wide range of strategies is available from different service providers. These include spot vs futures, high-velocity trading vs passive trading, sector vs market focus, etc;
- No monthly fee or hidden charges – success fee is based on the service provider making a profit;
- Flexibility to compound returns or withdraw them;
- No disincentive to deposit or withdraw funds except gas fee, which is true for all exchanges;
- Risk management through the ability to set co-investing limits per trader. Also, the ability to follow different traders across varying strategies;
- Stringent vetting procedures for service providers ensure that performance-based rankings are provided to investors for ease of decision-making.
How to Invest with Zignaly Profit Sharing?
Getting started is a simple three-step process as follows:
- Registration – Takes up to 60 seconds, with no personal information required;
- Deposit Crypto or buy through a credit card into your Zignaly exchange account (a Binance / Bitmex powered subaccount available on the Zignaly platform);
- Choose a trader & set the amount to co-invest. Investors are provided with key service provider attributes to help their decision-making process. These include strategy employed, return performance over the past 90 days & their profit-sharing fee.
What is Zignaly’s Profit Sharing Fee Structure?
The project’s earnings as detailed above come from sources apart from the investors. Therefore, Zignaly is free for the investing public.
Investors share in profits with expert traders. These are variable & depend from trader to trader. The typical range is 30% to 40% of gains generated. To repeat, the fee is success-based, meaning that if no profits are made, no fee is due.
Is Zignaly Profit Sharing Safe?
The profit-sharing service has no custody of assets for Zignaly, which is managed through partner exchanges (Binance & Bitmex).
Service providers have no access to the underlying funds & can only take trading actions. If a service provider decides to cease operations, there are strict disclosure requirements in place & closing all open positions is a prerequisite. All balances in profit sharing main & subaccounts are covered by the exchange’s insurance.
The platform has strict vetting procedures in place for onboarding traders. Their performance & strategy is regularly reviewed and presented as part of the marketplace. This ensures that investors are connected only with the best service providers.
To top it all, the platform’s wallet is additionally secured by a US$5 Million insurance.
Is Zignaly Legitimate?
Similar to 99% of all Crypto projects, there is no regulatory supervision of Zignaly. The project does have the backing of some of the leading investors in the Crypto Space, which speaks of the robust due diligence by third parties, including:
The project has passed the checks of tier-one exchanges, that is Binance & Bitmex, for brokerage & Houbi for listing. This adds further comfort. Leading international publications (see below) have favorably covered the project:
Could you Lose money with Zignaly’s Profit Sharing Service?
Unfortunately, yes. Investment returns are subject to market risk, as any trader you invest with is just another market participant.
Therefore, he is likely to make the same mistakes as any other trader & has no control over the market except for his actions. As for losing money due to fraud, this is an insurance-backed, technology-driven & noncustodial solution. Hence, there is minimal risk of loss due to fraud.
How does Zignaly Make Money?
Zignaly makes money through two means:
- Charging 5% off expert trader’s earnings for the opportunity to host their profit-sharing services on their platform;
- Rebates from exchanges on directing client trades through them. Currently, the platform is part of the Binance & BitMex broker programs.
How does $Zig Coin Fit In?
$ZIG coin is the heart of everything on the Zignaly platform. 3 utilities are common from a blockchain perspective:
- Representing ownership of the platform;
- Staking for purposes of securing the network;
- Voting on governance proposals.
The team did not stop here and decided to add more utilities to $ZIG coin as shown below:
The focus of the founders & their investors seems focused on increasing the user base of the project. This growth when tied directly with $ZIG coin makes it an inherent part of the ecosystem. Ultimately, demand for the coin should increase by the aforesaid actions. This should lead to a price surge with supply limited.
What are the Project’s limitations?
The project lacks direction with its simultaneous offer of three competing products – Signals, Copy trading & Profit Sharing. This would leave any new investor confused. Also, services like copy trading have suffered from a lot of bad press in the past & been labeled as scams. This is a credibility problem the platform could do without.
The app website needs a major upgrade to be able to provide a simple interface for interaction. The present theme makes the whole experience a bit difficult and would put off any new investor.
The project lacks a mobile application, with the mobile browser view not up to the mark. In today’s fast-paced world, the need to log in via a laptop is not exactly appealing.
What About the Competition?
From my research, I have not found any direct competitor to Zignaly in the profit-sharing sphere. These findings are endorsed by Team Zignaly in various social media appearances as well.
Profit-sharing and/or co-investing services are offered by many independent expert traders. The trust barrier has been the biggest obstacle for these service providers to grow. Hence, there has been a gradual shift to Zignaly’s platform which resolves the trust barrier & brings a wider market to the disposal of these service providers.
The closest competitor in terms of the idea is NeoFi but their focus is on long-term investing as opposed to Zignaly’s trading focus.
Crypto is a relatively new, and still misunderstood, asset class. Therefore, the growth of the whole class depends on the ability of the space to attract new investors, users, and adopters. In this regard, Zignaly’s Crypto Profit Sharing services help bridge the understanding gap & allow for easy onboarding of new users.
The lack of viable competition in this new space makes the analysis one-sided. Therefore, it is important to look at how the service could improve. In this regard, the transparency and security protocols are robust, but the user experience as highlighted above could do with some changes.
All in all, the rapidly growing Indian Crypto space should benefit from Zignaly’s curated marketplace. This is an easy, transparent & secure manner to commence your Crypto journey.