One key service that we will offer via the Saturn protocol is to give you an easy to use interface for managing your funds. We believe that there is still so much untapped potential for using smart contracts on Ethereum's blockchain - mostly because for the average user setting them up is too tricky and frustrating.
An interface to manage your money quickly in a trustless way will allow people to truly unleash the full benefits that decentralized technology is able to provide. Namely, we see smart contracts as the perfect way to solve the legal problems of fund management. In the banking world, setting up money management contracts for an investment company or a professional trader carries costly legal overheads - and it just takes too much time! Having this all set up in a smart contract means you no longer need to worry about the legalities because your money management agreement is being regulated by Ethereum's blockchain.
Smart HODL Contracts Solve Panic Selling
To truly understand how this could be of benefit, let's have a look at one the most known downfalls to all traders: panic selling. Panic selling happens when there is a wide-scale selling of an asset, which causes a sharp decline in prices. Normally it starts with a steep drop in price, which could be a market correction, which leads traders to believe a further fall is imminent.
The reaction? Fear makes you pull the trigger and sell off in attempt to stop your losses or protect profits.
The consequence? The panic drives the price down even more!
The true problem with panic selling is that you start to sell just out of pure emotion and fear: without any anaylsis or keeping true to your fundamental trading strategy. Reacting emotionally to sudden changes in the market is almost always the wrong move to make. In fact, it is one of the main arguments for why a trading bot can have much better long-term results than a human trader: a trading bot never succumbs to emotion.
What is the Saturn Network's proposed solution for panic selling?
The answer is to never give yourself the option to do it. We have to face the facts, as humans, we will always at some point be governed by our emotions. As you watch the chart of your investment dip, you may be able to HODL one day or maybe even two days, but could you HODL the month needed for the bounce back? Not to mention the underlying factor of increased stress of watching those trade charts.
We believe, it is better to formulate your trading plan from the start and then remove the option to deviate. At the end of the day, if you have analyzed a project and believe in its long-term success why should you not HODL? A smart HODL contract gives you this ability. And do not think this means we believe you should always be thinking long term, no with our decentralized fund management you could even set your smart HODL contract to be just a couple of hours - it will be that easy.
Lets Look At Some Real Smart HODL contract scenarios
Obviously, hindsight is twenty-twenty, but let us put together a hypothesis scenario from Bitcoin's past.
- Let's say you bought into BTC at $3000 in June 2017, with your friend a professional trader telling you to HODL for six months.
- Well if you listened to your friend you would have maybe sold on December 17th, 2017 when Bitcoin was over $19000.
- But let's be honest you probably would have panic sold in September 2017 when it dropped to $2970 from $4000.
Now if you had simply removed your panic selling emotion from the equation, then you would have been smiling all the way to the bank. That is where we see the benefit of Saturn's fund management smart hodl contract coming into play - you could make your own anaylsis or you could follow the advice of a professional trader.
Either way, all you would need to do is set the number of tokens you want to HODL and enter for how long. The Saturn protocol will take care of the rest, setting up a code audited smart contract that will securely HODL your tokens until the release date. It will look much like the smart contract source code we released yesterday. This allows you to stick to your fundamentals, stay true to your market anaylsis and never lose yourself in your emotions.
All you have to do is set up your one click smart HODL contract sit back and maybe even crack open a beer, because remember: the future is bright and the Saturn Network is on the way.