Mindtrade.ai : Biometric insight for crypto trading

[GENERAL] Name and surname of main applicant

Dr. Gabriel Axel Montes, Ph.D.

[GENERAL] Email address of main applicant

cardano@gabrielaxel.com

Additional applicants

N/A

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Sensitive data related to user privacy will not be shared. General/broad relationships between data types and functionalities will be made open-source.

[METADATA] Category of Proposal

DeFi

[METADATA] SDG rating

SDG Goals

3 - Ensure healthy lives and promote well-being for all at all ages

8 - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

SDG Subgoals

3.4 - By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being

Key Performance Indicator (KPI)

3.4.2 - Suicide mortality rate

#sdg

[IMPACT] Please describe your proposed solution.

Fostering a Sustainable Trading Journey

Through Augmented Trading

Gabriel Axel Montes, Ph.D.

Crypto trading has been shown to demonstrate characteristics in users similar to problem-gambling (addiction). Traders, exchanges, and regulators all grow weary as a result: users have moral and fatigue issues and pause trading when funds are emptied; exchanges lost these users; and regulators are tempted to crack down on operators who do not show positive efforts. Mindtrade.ai sits at the intersection of these interests and proposes to create a toolkit/dashboard for traders and potentially exchanges to generate more sustainable trading behavior and trader retention. Mindtrade will use psychology and biometrics to give users a view into how their unconscious mind really sees a trade, and to potentially offer views on classical trading strategies in a non-compulsory way.

The present proposal aims to build a functional prototype toolkit and/or dashboard that users (traders) -- and possibly exchanges themselves -- can use. The project will initially aim to leverage existing SDKs/APIs from Cardano DEX's with whom we have been in conversation.

(Pitch deck HERE.)

LANDSCAPE:

• Trading of emerging crypto-currencies one of the fastests growing markets worldwide
• More than 106 million people currently use crypto exchanges (in comparison 300 million gamble on regulated markets)
• Market size (number of coins x market prize) over 1.2 trillion USD (April 2023)
• Crypto-trading shares fundamental characteristics with gambling: coin value difficult to assess objectively, driving mechanisms substantial randomness, high volatility, available 24/7, hedging impossible, rapid changes in market price
• New entries into crypto market accelerating, e.g. Netflix, Nike

PAIN:

• New traders enter the crypto market with little knowledge of trading strategy and huge exposure – unaccredited investors using wage income and often life savings, affecting their livelihood and creating economic opportunity costs.
• Portfolio volatility leads to mental health vulnerability
• Regulators lack insight into degree of problematic gambling behavior, whereas conventional (non-crypto) gambling industry has more maturity in this regard.
• Exchanges risk losing trading volume when traders retreat after suffering outsized losses
• Exchanges’ lack of tools for fostering sustained trading behavior by users
• Exchanges missing clear signs of demonstrating to regulators that they are proactively taking into account the best interests of their customers.

DOCUMENTED RELATION TO PROBLEM GAMBLING:

• Trading decisions are often based on limited information, short-term motives for gain, and highly volatile and uncertain outcomes. Therefore overlap with problem gambling anticipated
• People who gamble are significantly more likely to engage in day-trading
• Trading crypto-currencies is strongly correlated with problem gambling severity
• Trading cryptocurrencies appear to attract same demographic groups: (1) Younger males with higher education and income and (2) similar personality traits

CRYPTO-TRADING FALLACIES SHARED WITH GAMBLING:

• Illusion of control
• Preoccupation
• Fear of missing out (perhaps stronger than in gambling) – leading to excessive buying
• Anticipated regret (commision, rather than omission, leading to stronger feeling of regret) – leading to omission to sell

WITH INDUSTRY PARTNER:

• [Company name redacted] established as number of regulated markets increasing (from 30 to 100 in 5 years) and regulatory control tightening
• Industry-developed solutions for protecting customers inherently risk of being biased, hence need for third-party solutions
• Purely data-driven techniques at risk of inheriting bias from data and will typically not yield a standard risk scoring across the industry 
• Psychological, neuroscientific and clinical experience integrated with routine trading/gambling data yield optimal potential for detecting early signs of addiction and allowing personalized education and timely intervention while in combination with AI allowing scaling to real-time monitoring of large customer bases 
• 
  

SOLUTION FEASIBILITY:

• Founders established technology from concept to production. Currently more than 4 million users in 14 countries. Technical feasibility therefore high
• Due to demonstrated similarities with gambling characteristics the feasibility of a conceptually similar solution is also high
• Founders already identified relevant psychologists and clinicians for first human-AI based product 

EXPECTED MARKERS OF HARM:

• Deposits into account frequency
• Type of coins
• Frequency of login
• Risk per trade
• Session duration
• [Remainder of list redacted]

SOLUTION ADVANTAGES:

• Automated monitoring and risk assessment
• Individualized acknowledging specific investment styles
• Based on state-of-the-art scientific knowledge
• Explainable, informative feedback to customers
• Independently developed and maintained, benefits regulatory demands
• Performance can be independently validated (audit)

MICRO-INTERVENTIONS:

• Short practices (30 seconds - few minutes in length) that target specific psychological and emotional functions and tendencies
• Address underlying nervous system states
• Delivered throughout the user experience of trading on tailored intervals
• Arrangeable using AI based on individual trading behavior profile
• Holistic approach: intervention delivery begins early to cultivate sustainable trading from the get-go
• Interventions integratable into trading platform
• Use of biometrics and biofeedback (e.g., heart rate variability from smartwatch/FitBit)
• Goal: cultivate 

Micro-interventions are based on the guided direction of attention associated with particular target psychological and emotional states.

Users learn to better sense their personal, natural rhythms of behavior; where they tend to focus, how particular trading actions feel, gradually learning how to anticipate tendencies and patterns, becoming better able to pilot their trading behavior over time.

Micro-interventions can be generic, generalizable, specific, time-dependent, tailored to cognitive style – capturing various dimensions of users over time.

Early on, it is beneficial to introduce micro-interventions that guide the user to begin learning basic autonomic self-regulation. This will set the stage for their trading journey.

• Deep, relaxed, belly breathing technique
• Amplification of specific positive emotions
• Evenly circulating attention around their sense of bodily self
• Perspectival zooming

PROSPECTIVE OFFERINGS:

• Problem gambling detection
• Micro-interventions
• Education: micro-lessons to couple practice with theory
• Potential crypto-rewards, e.g. a new token, discounts on trading, unlocked deals on exchanges, etc.
• Downline possibilities: novel trading instruments/derivatives that depend on accumulated sustainable trading behavior through use of the product.
• Downline: neurotechnology for detection of trading perception using biometrics, e.g. brainwave technology (EEG)

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

The proposed project brings a novel technology to Cardano, making Cardano a first-mover chain in the space. This proposal poises Cardano to be used in a key technology in finance.

This proposal fulfills criteria of the Challenge, including the following metrics:

• Increasing the number products available for the community to use that help to enrich the ecosystem with new use cases.
• Increase the number of integrations that bring existing solutions together for a more seamless and connected experience between different products.
• Increased quality of existing products & integrations through improvements and new functionality.

[IMPACT] How do you intend to measure the success of your project?

The success will be measured by the production of a functional prototype toolkit and/or dashboard that users (traders) and/ or potentially exchanges would be able to use. Benefits include those mentioned in the previous section of the proposal.

Risk mitigation strategy:

• Risk (1): Immediate hiring need. Our team is actively searching for an appropriate engineer now. Due to global demand for specialised tech talent and in order to attract suitable talent in a timely manner, we are offering (in the budget) an above-average salary. This will also help to increase the chances of keeping a strong engineer beyond the scope of this proposal.

• Risk (2): Limited social/marketing reach.

• We have budgeted for a social media in this proposal in order to begin building toward this goal from the beginning.
• The proposer is a notable member of and leader in the SingularityNET community and ecosystem, respectively, which has multiple projects with existing and expanding user bases that could be marketed to and leveraged.

• Risk (3): R&D on the brain/biometric/hardware aspect(s) of the project not keeping pace with the software aspect of the project. As with any project that involves hardware, they tend to not move as fast as the software side. To mitigate this, in the R&D, we will use openly available data as much as possible (much of which has already been identified). This shifts the hardware logistics into more of a software matter.

[IMPACT] Please describe your plans to share the outputs and results of your project?

Sensitive data related to user privacy will not be shared. General/broad relationships between data types can be made open-source. High-level social media sharing will be included.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

This project comes on the heels of 4 previous Catalyst proposals that have all be successfully completed and closed-out. Future performance is therefore anticipated.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

Feasibility has been confirmed. Discussion with a major exchange confirmed the novelty and potential viability of the approach. The main goal of the project is to create a toolkit/dashboard to understand trading behavior.

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

Month 1:

R&D on biometric & brain responses to trading chart patterns (Part 1)

Discussion with potential (confidential) industry collaborator

Discussion with potential Cardano DEX's for integration

Acquisition of biometric hardware

Month 2:

Continued R&D (Part 2)

Month 3:

UI/UX basic development

Development of biometric coding

Month 4:

Develop loop between user and interface

Month 5:

UI/UX developed

Month 6:

Project prototype complete

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

Brief progress reports and high-level social media will be conducted on the milestones:

Month 1:

R&D on biometric & brain responses to trading chart patterns (Part 1)

Discussion with potential (confidential) industry collaborator

Discussion with potential Cardano DEX's for integration

Acquisition of biometric hardware

Month 2:

Continued R&D (Part 2)

Month 3:

UI/UX basic development

Development of biometric coding

Month 4:

Develop loop between user and interface

Month 5:

UI/UX developed

Month 6:

Project prototype complete

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

R&D and Project Management: $40,200 ($6,700 x 6 months)

Engineering: $22,200 ($3,700 x 6 months)

Social media: $10,800 ($1,800 x 6 months)

Product Design & Development: $28,800

Data analysis (cloud time and algorithm use): $18,000

Total: $120,000

An exchange rate of $0.28/ADA (reflecting the rate at the time of this writing) is used for budget calculation.

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

All costs will be commensurate to majority of wages and capital required to execute. Due to the high value-add scientific and engineering work required of the proposal, costs are above average in order to rapidly secure the human resource talent and equipment needed to conduct the work.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept