Detrader

[GENERAL] Name and surname of main applicant

Michael Cook

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Not Incorporated)

[GENERAL] Requested funds in ada

50000

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

9

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

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

A decentralized backtesting platform that enables users to share and test strategies, reducing redundant efforts, and offers robustness testing tools to mitigate overfitting and improve reliability.

[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 [*in practice], technically however we are building off existing opensource projects and implementing components of various opensource projects (in addition to various commonly imported python libraries (pandas, numpy, talib, etc.)) that are maintained independently. Our platform will be fully self-reliant and not dependant on the direction or development of any of these third-party projects, however we may collaborate with other projects where there is asynergistic advantage, and/or may decide to incorporate updates to project(s) we have forked and 'sync' certain features or bug fixes, etc. (ie. nautilustrader, quantfreedom, qstrader, etc.)

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

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

MIT License

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

Problems:

• Duplication of Effort: Traders often independently develop similar strategies and indicators, leading to redundant work and hindering collaborative innovation.
• Inadequate Backtesting Solutions: Existing platforms lack tools for robustness testing and often overlook the crucial aspect of addressing overfitting, resulting in unreliable performance estimates.
• Inaccessibility: High costs and complex interfaces with steep learning curves lock out many traders from utilizing effective backtesting tools.
• Limited Features & Paywalls: Many existing solutions offer basic functionality behind paywalls, restricting access to advanced features crucial for robust strategy development.
• High Technical Barriers: Current platforms often require extensive coding skills and infrastructure setup, limiting participation to a technically proficient minority.
• Centralized Data & Compute: Reliance on centralized data providers and computing resources creates bottlenecks and potential vulnerabilities.

Proposed Solution

This proposal addresses these issues by introducing a decentralized backtesting platform that leverages crowdsourcing to:

• Promote Collaboration: Enables traders to share strategies, indicators, and data, fostering a collaborative environment and reducing redundant efforts.
• Provide Robustness Testing: Offers tools to evaluate strategy performance under diverse market conditions, mitigating overfitting and improving reliability.
• Democratize Access: Utilizes a user-friendly interface and open-source codebase, making backtesting accessible to traders of all skill levels.
• Offer Comprehensive Features: Provides a wide range of functionalities, including advanced statistical analysis and risk management tools, without restrictive paywalls.
• Reduce Technical Barriers: Minimizes infrastructure requirements and simplifies strategy implementation through a user-friendly interface.
• Distribute Data & Compute: Users can contribute their data and computing resources to the network, creating a decentralized and resilient infrastructure.
• Incentivize Participation: A tokenized reward system incentivizes users to share their resources and contribute to the platform's growth.

Benefits:

• Accelerated Innovation: Collaboration and knowledge sharing foster the rapid development of robust trading strategies.
• Improved Performance: Robustness testing and overfitting mitigation lead to more reliable strategy performance estimates.
• Wider Participation: Increased accessibility empowers a broader range of traders to participate in algorithmic trading.
• Cost-Effectiveness: Open-source, community-driven development, and crowdsourced resources reduce costs and eliminate unnecessary paywalls.
• Simplified Development: User-friendly tools and reduced technical barriers streamline the strategy development process.
• Enhanced Security & Resilience: Decentralization reduces the risk of hacking and data breaches, ensuring platform stability.
• Community Ownership: Tokenized rewards align user incentives with platform success, fostering a thriving community.

Conclusion:

This decentralized backtesting platform, empowered by crowdsourcing, addresses the critical limitations of current solutions, creating a collaborative, accessible, and robust environment for developing and evaluating cryptocurrency trading strategies. By democratizing access to advanced tools and harnessing the collective power of the community, we aim to empower traders of all levels and foster innovation in this rapidly evolving market.

Sources

1. blog.amberdata.io/how-to-use-data-to-backtest-crypto-trading-strategies
2. ethz.ch/content/dam/ethz/special-interest/mtec/chair-of-entrepreneurial-risks-dam/documents/dissertation/master%20thesis/Master_Thesis_Gl%C3%BCcksmann_13June2019.pdf
3. github.com/Nathnael12/Trading-Engineering_Scalable-Backtesting
4. robotrade-ai.medium.com/elevating-backtesting-a-key-to-finding-effective-trading-strategies-f163afe5f530
5. www.coinbase.com/learn/tips-and-tutorials/how-to-backtest-a-crypto-trading-strategy

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

In general we hope to encourage wider adoption and promotion of Cardano as viable defi asset and network.

Positive Impact on the Cardano Community:

This decentralized backtesting platform has the potential to significantly benefit the Cardano community by fostering innovation, democratizing access to advanced trading tools, and promoting financial inclusion within the ecosystem. By providing a collaborative environment for developing and evaluating trading strategies, the platform can accelerate the development of robust algorithms, leading to more efficient and profitable trading practices. This can, in turn, attract more users and developers to the Cardano blockchain, further strengthening its position in the DeFi space.

The platform's emphasis on accessibility and user-friendliness can empower a wider range of individuals, including those with limited coding experience, to participate in algorithmic trading. This can democratize access to sophisticated financial tools, enabling more people to benefit from the opportunities presented by the Cardano ecosystem. Additionally, the platform's open-source nature and crowdsourced resources can reduce costs and foster a sense of community ownership, further promoting inclusivity and collaboration within the Cardano community.

Measuring Impact:

The impact of this project can be measured through both quantitative and qualitative metrics. Quantitative metrics could include the number of users, strategies shared, data contributions, and compute resources utilized. Qualitative metrics could focus on user feedback, community engagement, and the overall impact on the Cardano ecosystem, such as increased trading volume, developer activity, and user adoption.

Sharing Outputs:

The project outputs, including the platform's codebase, documentation, and research findings, will be shared openly with the Cardano community through GitHub, forums, and other relevant channels. We will actively engage with developers, traders, and community members to gather feedback, foster collaboration, and ensure the platform's ongoing development and adoption. This open and collaborative approach will maximize the project's impact and contribute to the growth and success of the Cardano ecosystem.

Value to the Cardano Community:

By democratizing access to advanced trading tools, fostering innovation, and promoting financial inclusion, this project can bring significant value to the Cardano community. It can empower individuals to participate more actively in the DeFi space, attract new users and developers, and strengthen the overall ecosystem. The project's success will contribute to Cardano's growth as a leading blockchain platform for decentralized finance and beyond.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

experience and skills

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Project Scope:

To develop a decentralized, crowdsourced platform for backtesting cryptocurrency trading strategies. The platform will address limitations of existing solutions by providing robust testing tools, fostering collaboration, and democratizing access through open-source technology and a user-friendly interface.

Development Plan:

Phase 1: Core Infrastructure Development (4 months)

Milestones:

1. Decentralized Data Storage: Implement secure and verifiable data storage using IPFS or similar technology.
2. Backtesting Engine: Develop a robust backtesting engine utilizing VectorBT for efficient and scalable computations, leveraging Pandas for data manipulation.
3. Smart Contract Integration: Design and deploy smart contracts for managing user contributions, rewards, and platform governance.
4. Basic User Interface: Create a user-friendly interface for strategy creation, backtesting, and performance analysis.

Deliverables:

• Functional backtesting engine with core features.
• Decentralized data storage and retrieval system.
• Smart contracts for platform governance and user interactions.
• Basic user interface for accessing core functionalities.

Phase 2: Crowdsourcing and Collaboration (3 months)

Milestones:

1. Strategy & Indicator Sharing: Implement functionality for users to share and access community-developed strategies and indicators.
2. Compute Resource Sharing: Integrate a system for users to contribute their computing resources for distributed backtesting, potentially drawing inspiration from the QuantFreedom repository.
3. Data Contribution & Validation: Enable users to contribute data and implement mechanisms for data validation and quality control.
4. Reward System: Implement a tokenized reward system for incentivizing user contributions, potentially using blockchain-based tokens.

Deliverables:

• Platform functionality for strategy and indicator sharing.
• Crowdsourced compute resource management system.
• Data contribution and validation mechanisms.
• Tokenized reward system for user incentives.

Phase 3: Advanced Features and Refinement (2 months)

Milestones:

1. Robustness Testing Tools: Integrate advanced features for robustness testing, such as Monte Carlo simulations and walk-forward analysis, potentially leveraging QuantStats for performance metrics.
2. Overfitting Mitigation: Implement techniques to address overfitting, such as cross-validation and regularization.
3. Enhanced User Interface: Improve the user interface with advanced charting, visualization, and reporting capabilities, potentially drawing inspiration from the VectorBT-AlgoTrading101 repository.
4. Security Audits and Optimization: Conduct thorough security audits and optimize platform performance for scalability.

Deliverables:

• Advanced backtesting features for robustness testing and overfitting mitigation.
• Enhanced user interface with improved visualization and reporting capabilities.
• Secure and optimized platform infrastructure.

Open-source Libraries and Repositories:

• VectorBT: Core backtesting engine and performance analysis.
• Pandas: Data manipulation and analysis.
• QuantStats: Performance metrics and reporting.
• QuantFreedom: Inspiration for distributed compute resource management.
• VectorBT-AlgoTrading101: Ideas for user interface enhancements.
• qstrader and nautilus_trader: Potential references for advanced functionalities and architecture considerations.

finalize

[RESOURCES] Who is in the project team and what are their roles?

Nick Tenszen, David Fatimehin

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Cost Breakdown:

Phase 1: Core Infrastructure Development (4 months)

ResourceEstimated Cost (ADA)

• Development Team: 15,000 3 developers (5,000 each) for 4 months. Covers salaries, benefits, and other employment costs.
• Cloud Infrastructure: 1,000 Server costs, storage, and other cloud services for development and testing.
• Smart Contract Auditing: 3,000 Security audits to ensure the integrity and safety of smart contracts.
• Open-source Libraries: 0 Utilizing VectorBT, Pandas, and other open-source libraries.
• Project Management: 2,000 Project management tools, communication, and coordination expenses.

Total Phase 1 Cost: 20,000

Phase 2: Crowdsourcing and Collaboration (3 months)

ResourceEstimated Cost (ADA)

• Community Incentives: 5,000 Token rewards for early contributors and data providers to encourage participation in the crowdsourced aspects of the platform.
• UI/UX Enhancements: 4,000
• Design and implementation of user interface improvements for collaboration and data sharing.
• Data Validation System: 2,000 Development of automated data validation and quality control mechanisms.
• Integration with QuantFreedom: 4,000 Adapting and integrating components from the QuantFreedom repository for distributed compute resource management.

Total Phase 2 Cost: 15,000

Phase 3: Advanced Features and Refinement (2 months)

ResourceEstimated Cost (ADA)

• Robustness Testing Tools:2,000 Implementing advanced features for robustness testing, including Monte Carlo simulations and walk-forward analysis.
• Overfitting Mitigation: 5,000 Integrating techniques to address overfitting, such as cross-validation and regularization.
• UI/UX Refinement:5,000 Further improvements to user interface with advanced charting and reporting features, potentially drawing from external repos.
• Security Audits & Optimization: 3,000 Comprehensive security audits and platform optimization for scalability and performance.

Total Phase 3 Cost: 15,000

Total Project Cost:

20,000 (Phase 1) + 15,000 (Phase 2) + 15,000 (Phase 3) = 50,000 ADA

Assumptions:

• Cost estimates are based on industry averages and may vary depending on location and specific expertise required.
• The project will primarily utilize open-source libraries to minimize licensing costs.
• Community contributions and crowdsourced resources will help reduce development expenses.
• Ongoing maintenance and support costs are not included in this breakdown.

This cost breakdown provides a comprehensive overview of the financial resources required to develop the decentralized crypto backtesting platform. By carefully managing resources and leveraging community involvement, the project aims to deliver a valuable tool to the Cardano community at a reasonable cost. 

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

The proposed decentralized crypto backtesting platform, with a total estimated cost of 50,000 ADA, represents a significant value for money for the Cardano ecosystem due to its potential to:

• Drive Innovation: By providing a robust and accessible platform for strategy development, the project can accelerate innovation in algorithmic trading within the Cardano ecosystem. This can lead to the creation of more sophisticated and profitable trading strategies, attracting new users and developers to the platform.
• Enhance User Experience: The platform's focus on user-friendliness and accessibility can significantly improve the trading experience for Cardano users. By lowering the barriers to entry for algorithmic trading, the project can empower a wider range of individuals to participate in the DeFi space, leading to increased adoption and liquidity within the ecosystem.
• Reduce Costs: By leveraging crowdsourcing and open-source technologies, the project aims to minimize development and operational costs compared to traditional centralized platforms. This cost-effectiveness ensures that the project delivers significant value for the investment, maximizing the benefits for the Cardano community.
• Foster Collaboration: The platform's collaborative features, such as strategy and data sharing, can promote knowledge exchange and cooperation within the Cardano community. This can lead to a more vibrant and interconnected ecosystem, driving innovation and growth across various DeFi applications.
• Strengthen the Cardano Brand: By providing a high-quality, community-driven platform, the project can enhance the Cardano brand's reputation as a leading blockchain for decentralized finance. This can attract further investment and development, contributing to the long-term success of the Cardano ecosystem.

Conclusion:

The proposed decentralized crypto backtesting platform represents a strategic investment for the Cardano ecosystem, offering a high return on investment through innovation, user experience enhancements, cost savings, collaboration, and brand building. The project's focus on community involvement and open-source principles ensures that the benefits are widely distributed, maximizing the value for the Cardano community as a whole.